WT/REG370/2  
 
6 November  2017 
(17-6010) Page: 1/18 
Committee on Regional Trade Agreements  Original:  English  
 
 FREE TRADE AGREEMENT  BETWEEN CHINA AND THE REPUBL IC OF KOREA  
(GOODS  AND SERVICES ) 
QUESTIONS AND REPLIE S 
 The following communication, dated  3 November  2017, is being circulated at the request of 
the delegations of China and the Republic of Korea . 
 
 
_______ ________  
 
 
Question s from the delegation of Canada  
 
1.1.  Paragraph 5.31: This section indicates that some of the provisions of Chapter 16 
address environmental impact, bilateral cooperation, and institutional and financial 
arrangements.  
a. Could the Parties provid e information on how cooperation is planned and 
managed under the provisions of Chapter 16, including the allocation of 
financial resources?  
Joint response from the Parties   
 
 Korea and China have been moving towards strengthening bilateral environmental 
cooperation. So far, there is no financial resource separately allocated for Korea -China cooperation 
within the Korea -China FTA. In order to conduct cooperation under the provisions of Chapter 16 , 
China w ill seek adequate  and sustainable financial resources  domestically according to the specific 
requirements  from the implementation of the FTA.   
 
b. Could the Parties provide examples of cooperation activities that have taken 
place to date and/or are planned?  
Joint response from the Parties   
 
 Korea -China coopera tion can be promoted in two formats: first, tripartite cooperation among 
Korea -China -Japan; second , bilateral cooperation between Korea and China.  
 
 - For tripartite  cooperation , policy cooperation has centred on the Tripartite Environment 
Ministers Meeti ng (TEMM). Within the meeting, there are consultative groups and research on air, 
dust and sand storms, biodiversity, industry, education, chemicals and wastes.  
 
 - For Korea -China bilateral cooperation, there has been a series of actions taken , such as t he 
bilateral cooperation project for greenhouse gas reduction (from 2015), Korea -China director 
general -level meetings, Korea -China joint research on air quality and the Korea -China joint 
committee for climate change response (from 2016). The bilateral environmental  cooperation  
between the two governments began from 1993 by signing the cooperation agreement and 
establishing China -Korea environmental  cooperation joint committee. The Memorandum of 
Understanding on environmental cooperation between the M inistry of Environment Protection of 
China and the Ministry of Environment of Korea was signed in 2014. Since then the Parties have 
developed pragmatic cooperation on many areas, such as environmental  technology and WT/REG370/2  
 
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  industries, environmental  protection on Yellow  Sea, air pollution control, sand storm monitoring 
and green economy capacity construction, etc.  
 
 For implementing the important  consensus of the two countries ' leaders,  Parties are  willing 
to cooperate with each other  more closely and p ragmatically  on en vironmental issues under the 
cooperation framework  between authorities of the two countries.  In addition, Korea and China  plan 
to hold the Committee on Environment and Trade  when necessary.  
 
1.2.  Paragraph 5.31: This section indicates that the Parties agree to enforce their 
environmental measures including laws and regulations.  
What is the mechanism and process for resolving issues that may arise under the 
provisions of Chapter 16?  
Joint response from the Parties   
 
Article 16.8 of this Chapter stipulates that "A Party may through the contact points request 
consultations regarding any matter arising under this Chapter. " Accordingly, both countries are 
using this consultation mechanism to resolve any problems that may arise under the provisions of 
Chapter 16.  
1.3.  Paragraph 5.32: This section indicates that Chapter 17 deals with economic 
cooperation, covering a number of areas: agro - fisheries (including food security, 
fisheries and forestry); industrial cooperation (including steel, SMEs, information and 
communications  technology, and textiles); energy and resources; science and 
technology; maritime transport; tourism; outbound tourism; cultural cooperation; 
pharmaceuticals, medical devices and cosmetics; local economic cooperation; and 
industrial complexes.  
In the cont ext of agro -fisheries, could the Parties provide examples of cooperation 
activities, including the topics being explored that have taken place to date and/or are 
planned?  
Joint response from the Parties   
 
 There is no specific cooperation activity or plan  for such activity in the area of agriculture 
yet. 
1.4.  Paragraph 5.22 : As explained in the factual presentation and reflected in 
Article  15.2(2) of the China -Korea FTA, it is stated that the Parties may benefit from an 
exemption from the obligation to provide "national treatment" consistent with 
Article  4(2) of the WIPO Performances and Phonograms Treaty (WPPT). This exemption 
appears to operate so that one Party to the FTA is only required to provide reciprocity to 
the other Party in relation to the remunerati on right for performers and producers of 
phonograms. Is this an accurate interpretation of the FTA?   
 We further note that Article 15.7(1) of the FTA requires the Parties to provide a 
right of remuneration for performers and producers of phonograms, subjec t only to the 
caveat in footnote 56 (i.e., "It is understood that this paragraph is subject to the 
obligation of each Party to give such right under international agreements"). What is the 
intended effect of footnote 56?  Is the obligation in Article 15.7(1 ) of the FTA to provide 
a remuneration right subject to the flexibilities that exist under Article 15(3) of the 
WPPT?  
 
Joint response from the Parties   
  
 Canada 's understanding with regard to Article 15.2(2) and Article 15.7(1) is correct.  During 
the acce ssion to WPPT, China has already declared the exemption from the obligation to provide a 
right of performers and producers of phonograms to remuneration  for the direct or indirect use of 
phonograms published for commercial purposes . In the China -Korea FTA,  as indicated in WT/REG370/2  
 
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  Article  15.7(1), the right of remuneration for performers and producers of phonograms  is subject 
to the obligation of China  to give such right under  WPPT . 
 
1.5.  Paragraph 5.24 : As part of the copyrights and related rights provided for in the 
China-Korea FTA, the agreement requires the Parties to provide rights to broadcasting 
organizations in relation to their broadcasts.  We note that Article 15.6(2) appears to 
provide a broader right of reproduction in relation to broadcasts than the reproducti on 
right provided in Article 15.7(2)(c), which is qualified as follows: "the reproduction of 
fixations, made without their consent, of their broadcasts".  What is the relationship 
between Articles 15.6(2) and 15.7(2)(c)?  To what extent does the FTA require Parties to 
provide a reproduction right to broadcasting organizations in relation to their 
broadcasts?  
Joint response from the Parties   
 
 The right of reproduction of broadcasting organizations in relation to broadcasts  provided in 
Article 15.6(2) has the same scope with the right stipulated in Article 15.7(2) (c), according to 
Article 45 of THE COPYRIGHT LAW OF THE PEOPLE'S REPUBLIC OF CHINA, a broadcasting 
organization has the right to forbid rebroadcasting, recording and copying their broadcasts without 
the permission of the broadcasting organization.   
 
 The Copyright Act of Korea provides broadcasting organizations with the exclusive right to 
reproduce their broadcast s, as obligated under Article 15.6 of the FTA through the combination of 
Article 2.22  (definition of reproduction) and Article 84  (reproduction right s of broadcasting 
organization s). 
 
1.6.  Paragraph 5.26 : As noted in the factual presentation, the China -Korea FTA requires 
parties to "take effective measures to curtail repetitive infringement of cop yright and 
related rights on the Internet or other digital network" (Article  15.28).  What types of 
measures have been implemented or contemplated in relation to this obligation?  
Joint response from the Parties   
 
 The measures have been implemented by China  are as follows:  
 
1. Promote regional cooperation and establish mechanism of reporting clues and investigating 
cases cooperatively ; 2. Promote the cooperation of electric -commerce Big Data between the 
government  and the industries to ensure the efficiency  of information  searching  and evidence 
obtaining.  
 
 The measures have been implemented by Korea  are as follows:  
 
 The Korea Copyright Protection Agency investigates the information networks of online 
service providers (OSPs) and issue s correction recommen dations such as warnings to user s 
responsible for copying and transmitting illegal reproductions and deletion and termination of 
transmission s, in case transmissions of illegal reproductions, etc. have occurred in a repetitive 
manner, pursuant to Article 1 33 (3) of the Copyright Act which was introduced in 2009.  
 
 Article 103 bis provides that the court may order online service providers to terminate or 
block access by certain accounts , etc.  
 
 Also, Article 104 requires special types of online service prov iders such as cyber lockers or 
peer-to-peer sites to adopt technical measures to disable illegal transmission or sharing of 
copyrighted works through their services.  
 
 In order to prevent illegal distribution of copyrighted works, the registration require ments 
and cancellation of "special type online service providers " have been revised, as specified in 
Article  22 of the Telecommunications Business Act and Article 29 of the Act 's Enforcement Decree , 
as registration requirements of special type value -added telecommunication service providers 
(Annex  3-1 related to Article 29, Paragraph 9), thereby further reinforcing obligations of service 
providers.  
 WT/REG370/2  
 
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  1.7.  Paragraph 5.26 : What does "adequate to compensate for the injury" mean in 
Article 15.24(2)(a)(i)? Would this allow for compensation at a lower level than the 
amount of the loss suffered by the patentee? The footnote makes reference to 
reasonable royalties but it is not clear when a reasonable royalty would be ordered 
rather than lost profits. If a reasonable roya lty was sufficient in situations where a lost 
sale was established, this would seem to mark a departure from prevailing approaches.  
Joint response from the Parties   
 
 The term "adequate to compensate for the injury " in Article 15.24(2)(a)(i) is also used i n 
Article 45 of the TRIPS agreement.  
 
 During the TRIPS negotiations, the United States insisted on "full compensation " while the 
European Commission insisted on "adequate compensation ," and the latter has been employed for 
the final draft of the agreemen t. This not only recognizes the discretion of the judicial authority 
over assessing the amount of damage, but also helps the patentee to prove his or her actual 
damage arising out of an infringement in a convenient manner by ensuring reasonable royalty and  
lost profits to be calculated as the amount of damage. In other words, whether the compensation 
will be assessed at a lower level than the amount of damage or as a reasonable royalty will be 
determined by the judicial authority or the patentee.  
 
 The pat ent Act of Korea stipulates that if "the actual damages " exceeds "usual damages ", 
the patentee may claim compensation for damages that exceed the usual damages as well.  
(Article  128.6 of the Patent Act).   
 
 The method of calculating  compensate for infringe ment injury has been stipulated in 
Article  65 of the PATENT LAW OF THE PEOPLE'S REPUBLIC OF CHINA, Article 63 of the TRADE 
MARK LAW OF THE PEOPLE'S REPUBLIC OF CHINA, and Article 49 of the COPYRIGHT LAW OF THE 
PEOPLE'S REPUBLIC OF CHINA. For instance, in A rticle 65 of the PATENT LAW OF THE PEOPLE'S 
REPUBLIC OF CHINA, it is stated that t he amount of compensation for patent right infringement 
shall be determined according to the patentee's actual losses caused by the infringement. If it is 
hard to determine t he actual losses, the amount of compensation may be determined according to 
the benefits acquired by the infringer through the infringement. If it is hard to determine the 
losses of the patentee or the benefits acquired by the infringer, the amount of comp ensation may 
be determined according to the reasonably multiplied amount of the royalties of that patent.  In 
this case, if the actual losses could be determined clearly, it is no reason to determine the amount 
of compensation according  to royalties.  
 
Quest ions from the delegation of the European Union  
 
Provisions on Trade in Goods  
Standards  
Sanitary and phytosanitary measures   
 
1.8.  Paragraph 3.26 : According to the FP, each Party reaffirms the SPS Agreement that 
is incorporated into the Chapter (Article 5.3) a nd the Parties agree to explore the 
opportunity for technical cooperation in SPS areas and agree to give due consideration 
to cooperation in relation to SPS issues (Article 5.4).  
 Could the Parties further elaborate on these provisions and present the 
achievements reached so far in terms of cooperation on SPS issues?  
 
Joint response from the Parties   
 
 Article 5.3 means Korea and China will develop and implement SPS measures according to 
the provisions of the SPS Agreement.  Article 5.4 means Korea and Chin a will explore various 
cooperative activities to enhance  the relationship between  both parties.  In order to controlling the 
negative influence  on bilateral trade caused by SPS measures at the lowest level, the Parties 
reiterated  to deal with SPS issues by using the relative  principle  of the WTO and SPS agreement 
through  further strengthened  technical  cooperation. The Parties also had an effective  discussion on 
the SPS issues concerned by both sides during the first SPS Committee held in 2016  and the 
second SPS Committee held in 2017 .  WT/REG370/2  
 
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  Anti-dumping and countervailing measures  
Subsidies and State -aid  
 
1.9.  Paragraph 3.40 : page 21 on State Trading Enterprises : According to Article 2.11 
(State Trading Enterprises), both Parties agreed that: where a Party requests 
information from the other Party on individual cases of state trading enterprises, the 
manner of their operation and the effect of their operations on bilateral trade,  the 
requested Party shall have regard to the need to ensure maximum transparency possible  
without prejudice to Article XVII:4(d) of GATT 1994 on confidential information.  
a. The EU would like to know whether these commitments have required any new 
enactment and/or amendments to domestic legislation concerned on either of 
the Parties or on both Par ties, and if so, what they are and how they have been 
implemented.  
Joint response from the Parties   
 
 There  is no need for new enactment and/or amendments to domestic legislation concerning 
information transparency of state trading enterprises.  
 
b. The EU wo uld also be interested to know which Ministry or agencies of both 
Parties are in charge of ensuring compliance with these FTA obligations.  
Joint response from the Parties   
 
 For the Chinese side, the Ministry of Commerce takes the responsibility of the FT A 
implementation.  For the Korean side, t he Korea Agro -Fisheries & Food Trade Corporation (aT), an 
affiliate organization of Ministry of Agriculture, Food and Rural Affairs, is in charge of state trading.  
Provisions on Trade in Services and Investment  
Gener al provisions on trade in services  
Movement of natural persons  
 
1.10.   Could China submit further explanation on how this agreement affects Chinese 
general visa policy?  
Joint response from the Parties   
 
 The implementation of the China -Korea FTA does not affect China 's general visa policy . 
 
1.11.   Could the Parties clarify whether the applications of Korean citizens will be 
treated preferentially?  
Joint response from the Parties   
 
 According to the Agreement, both sides will treat applications from each other equally . China 
commits to issue multiple entry visas valid for one year and for a stay not exceeding thirty days 
each time to  the applicants  who visits China and then come to Korea without unlawful record in 
previous cases.  
 
Table 4.2 Republic of Korea: Commitments  on movement of natural persons  
1.12.   The Factual Presentation does  not say "economic needs tests" (ENTs) or 
numerical ceilings can be applied to contractual service suppliers in China, while it says 
they can be applied in Korea (p.24, footnote under Table 4.2 b ut not under 4.1).  
 Could China clarify whether the economic needs tests" (ENTs) or numerical 
ceilings can be applied to contractual service suppliers in China?  
 
 
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  Joint response from the Parties   
 
 According to the Agreement,  ANNEX 11 -A, Section A , Aritcal10 states that "Labour market 
testing may be required as a condition for temporary entry of CSS, or numerical restriction may be 
imposed relating to temporary entry for CSS. " This means that "economic needs tests" (ENTs) or 
numerical ceilings can be app lied to contractual service suppliers in China . 
 
Table 4.3 China: Lists of Contractual Service Suppliers  
 
1.13.   Table 4.3 covers areas that are not totally clear whether they are open for all 
natural persons i.e. education services, architectural services, touri sm services . 
 Could China clarify whether the contractual service suppliers are open for all 
natural persons?  
 
Joint response from the Parties   
 
 The scope of contractual service suppliers  are limited to the specific sectors listed in 
Table  4.3, not open f or all natural  persons.  
 
Liberalization commitments  
 
1.14.   Paragraph 4.20: As clearly stipulated in the Agreement, both parties opted for a 
positive -list approach in trade in services but additionally agreed to carry out 
subsequent negotiations to shift to a neg ative -list approach covering the 
pre-establishment phase of investment and trade in services in mode 3, and also in 
investment, not later than two years after the entry into force of the Agreement 
(annex  22-A guidelines for subsequent negotiations in trade  in services and 
investment).  
 Given that the agreement entered into force in December 2015, these subsequent 
negotiations are expected to be conducted before December 2017. The EU would like to 
know if the subsequent negotiations will start (or already st arted) within this year, as 
set out in the guidelines in Annex 22 -A.  
 
Joint response from the Parties   
 
 The subsequent negotiations based on a negative list approach have yet to start. According 
to Annex 22 -A of the Agreement, the parties shall commence the subsequent negotiations as soon 
as possible, but not later than two years following the date of entry into force of the Korea -China  
FTA, which is December this year . 
 
Sector -specific commitments  
Table 4.5 China: Sector -specific liberalization under the  Agreement at national level, 
excluding mode 4 and horizontal limitations  
 
1.15.   According to the table, China has improved its sectoral commitments in 
comparison with GATS in computer and related services.  
 Could the Parties submit additional details? In partic ular, has any other conditions 
been established for the provision of these services e.g. obligation to have a Chinese 
national involved at any stage of the provision or other?  
 
Joint response from the Parties   
 
 In the sub -sector Software Implementation Services (CPC 842) , China committed that 
wholly foreign -owned enterprises are allowed  in Mode 3 on Market Access in the China -Korea FTA. 
While in GATS, China 's commitment is that o nly in the form of joint ventures, with foreign majority 
ownership permitted.  And in the NT colum n, Mode 4, foreign service  suppliers must meet the 
qualifications  as follows: certified engineers, or personnel with Bachelor's degree (or above) and 
three years of experience in these fields.   
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  Government procurement  
 
1.16.   The Factual Presen tation contains just a reference to " cooperative activities " in 
the field of government procurement and mentions that t he Parties agree to begin 
negotiations on government procurement as soon as China has acceded to the WTO's 
Agreement on Government Procur ement (GPA).  
a. Could China indicate when it intends to submit a next revised accession offer 
meeting the latest requests put forward by the GPA parties allowing the parties 
to start negotiations on government procurement?  
Joint response from the Parties   
 
 China is willing to endeavour  to further improve the offer, in the condition of that China and 
the GPA Parties reach a consensus on the content of China 's offer before submitting . 
 
b. Do the Parties have already any plan to start their negotiations on govern ment 
procurement?  
Joint response from the Parties   
 
 The Parties have not established  any plans to start negotiations on government 
procurement . Only if China has complet ed the  negotiations on the accession to the WTO 
Agreement on Government Procurement , the negotiations on government  procurement would 
start. 
 
Intellectual property rights  
 
1.17.   According to Article 15.28 (Measures against Repetitive Copyright Infringements 
on the Internet), each Party shall take effective measures to curtail repetitive 
infringe ment of copyright and related rights on the Internet or other digital network.  
 The EU would be interested to know whether any specific measures have been 
taken by the Party against any IPR infringing activities pertinent to copyright and 
related rights o n the internet or other digital network.  
 
Joint response from the Parties   
 
 The measures have been implemented by China are as follows:  
 
1. Promote regional cooperation and establish mechanism of reporting clues and investigating 
cases cooperatively ; 2. Promote the cooperation of electric -commerce Big Data between the 
government  and the industries to ensure the efficiency of information  searching  and evidence 
obtaining.  
 
 The measures have been implemented by Korea  are as follows:  
 
 The Korea Copyright Protection Agency investigates the information networks of online 
service providers (OSPs) and issue s correction recommendations such as warnings to user s 
responsible for copying and transmitting illegal reproductions  and deletion and termination of 
transm ission s, in case transmissions of illegal reproductions, etc. ha ve occurred in a repetitive 
manner, pursuant to Article 133 (3) of the Copyright Act which was introduced in 2009.  
 
 Article 103 bis provides that the court may order online service providers to terminate or 
block access by certain accounts etc.  
 
 Also, Article 104 requires 'special type s of online service providers ' such as cyber lockers or 
peer-to-peer sites to adopt technical measures to disable illegal transmission or sharing of 
copyrighte d works through their services.  
 
 In order to prevent illegal distribution of copyrighted works, the registration requirements 
and cancellation of "special type s of online service providers " have been revised, as specified in WT/REG370/2  
 
- 8 - 
 
  Article 22 of the Telecommuni cations Business Act and Article 29 of the Act 's Enforcement Decree , 
as registration requirements of special type value -added telecommunication service providers 
(Annex 3 -1 related to Article 29, Paragraph 9), thereby further reinforcing obligations of ser vice 
providers.  
 
Environment  
 
1.18.   Paragraph 5.31: The Parties maintain their sovereign right to establish their own 
levels of environmental protection and environmental development priorities, and to 
adopt or modify their environmental laws and policies.  
a. The EU would be interested to know whether either of the Parties has or both 
Parties have adopted or modified their respective environmental laws and 
policies, or has/have any intention or plans to do so in the foreseeable future, 
particularly in conjunction with: the promotion of the dissemination of 
environmental goods including environmentally -friendly products and 
environmental services; and cooperation on the development of environmental 
technology and promotion of environmental industry.  
Joint response from the Parties   
 
 According to related requirements and arrangements of implementing the Chapter 16 of the 
Agreement,  both would like to facilitat e bilateral cooperation on the popularization of 
environment al products and services . 
 
 Korea has continued to promote the development, support, and dissemination of 
environmental technologies and foster the environmental industry  since enacting the 
Environmental Technology and Industry Support Act.  After the creation of the investment fund for 
future environmen tal industry, related bills are currently in the  legislative process. Certification of 
eco-labels is being operated in accordance with the Environmental Technology and Industry 
Support Act. The Act on Promotion of Purchase of Green Products was also enacte d to require 
public institutions to purchase eco -labelled products promoting the dissemination of environmental 
goods.  Recently, the 3rd basic plan on promoting purchase of green products for 2016 -2020 was 
established to pursue policies for distribution of  eco products.   
 
b. The EU would also like to know whether the Committee Meeting on 
Environment and Trade already took place after th e entry into force of the 
Agreement, and if there has been any substantial discussion about making 
available the adequate and sustainable financial resources necessary for the 
implementation of this Chapter.  
Joint response from the Parties   
 
 Korea and China have been engaging in various dialogue channels , such as director general -
level meetings between  both countries ' environme nt ministries , and remain committed to stronger 
bilateral cooperation on  the environment. Both countries plan to hold the Committee on 
Environment and Trade , when necessary . There has been no substantial discussion yet on the 
financial resources for the im plementation of this Chapter in  the Korea -China FTA.  China will seek 
adequate  and sustainable financial resources domestically according to the specific requirements  
from the implementation of the FTA .  
 
Economic Cooperation  
 
1.19.   Paragraph 5.32: Reference is d one to chapter 17 of the agreement on economic 
cooperation and, more in particular to the following provisions:  
- Article 17.21: Tourism Cooperation "The Parties, recognizing that tourism contributes 
to the enhancement of mutual understanding between them and is an important 
industry for their economies, shall endeavour to: d) collaborate to promote the 
sustainable development of tourism in the territories of the Parties";  
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  - Article 17.24: Pharmaceuticals, Medical Devices and Cosmetics Cooperation: "1. The  
Parties shall endeavour to cooperate for mutual growth and development in the sector 
of pharmaceuticals, medical devices and cosmetics, recognizing the importance of 
improving and protecting public health".  
 
 The EU would be interested to know if the com mitments taken under this chapter 
in a range of areas to enhancing bilateral cooperation have led to any tangible and 
specific action plans/projects or any of them are under exploratory discussion, 
particularly as regards tourism and pharmaceuticals, Medic al Devices and Cosmetics.  
 
Joint response from the Parties   
 
 The Committee on Economic Cooperation was held in Jan, 12th, 2017. At that Committee, 
both Parties discussed many issues related with economic cooperation including the issues which 
are mentione d in Article 17.21 and 17.24.  
 
 For tourism, China National Tourism Administration  has made efforts to promote the tourism 
cooperation between the parties, including organiz ing Chinese participants  to the tourism 
exposition in Korea, inviting the Korean pa rticipants to the tourism exposition in China, facilitating 
the connection of tourism industries between the countries, promoting the understanding of each 
country 's cultural , holding the meetings/ conversation  of bilateral tourism affairs in government  
level, signing official  document of bilateral  cooperation  on tourism, safeguarding  the tourism 
market order cooperatively, exchanging tourism information, including the flow direction of tourists 
and policies, creating open and efficient  policy environment  for the development  of tourism 
industry with other governmental authorities,  etc. But t here are no tangible and specific action 
plans or projects based on Article 17.2 1 yet, and both parties continue to engage in consultation 
for tourism cooperation.  
 
 For p harmaceuticals, Medical Devices and Cosmetics, there has been no specific action 
plans/projects  under the China -Korea FTA until now. All the related cooperation  is conducted under 
the MOU on foods, pharmaceuticals, Cosmetics and Medical Devices between Chi na Food and Drug 
Administration  and Ministry Of Food and Drug Safety , Korea.   
 
Question s from the delegation of Japan  
 
1.20.   Regarding paragraphs 3.19 and 3.22  on Rules of Origin (section 3.2): In 
HS Chapters 84 -97, where change from parts generally takes place in the production 
process, what is the reason why some subheadings in these Chapters only allow RVC 
although CTC might be better applicable to those Chapters? On the other hand, there are 
some other subheadings which only allow CTC in the same Chapters. In  this regard, 
please provide rationales for such different treatment of PSR applied in the same 
Chapters.  
 Please provide examples of "geographical reason" stipulated in paragraph 2(a) of 
Article  3.14.  
 
Joint response from the Parties   
 
 The rules of origi n in HS Chapter 84 -97 have been set according to the principle that to 
ensure the product has been substantially transformed in the territory of the parties. The parties 
instituted  the CTC 、RVC or Processing rules of different products through negotiations. The 
"geographical reason"  in Article 3.14 should be identified subject to the logistics needs case by 
case.  
 
1.21.   Regarding paragraph 3.28  on Technical barriers to trade (section  3.4.1 .2): Since 
the entry into force of the FTA, how often information exch ange has been made based 
on Article 6.9 (consumer product safety) and what outcome is expected from such 
information exchange?  
 What is "possible implementing arrangements with regard t o conformity 
assessment cooperation" in Article 6.10 ? Does it mean  MRAs signed with third Parties ? 
 WT/REG370/2  
 
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  Joint response from the Parties   
 
 The information exchange based on Article 6.9 has been made upon request of the other 
party since the entry into force o f the FTA.  
 
 The potential outcomes of this information exchange, such as relevant regulatory systems, 
incident analysis, hazard alerts, products bans, product recalls, and market surveillance  activities 
according to Article 6.9.2, are intended to ensure t he safety of consumer products.  
 
 The "possible implementing arrangements with regard to conformity assessment 
cooperation"  means any possible cooperation  arrangements agreed by both Parties through 
negotiations within the area of conformity  assessment . 
 
1.22.   Regarding Tables 4.5 and 4.6 o n Liberalization commitments (section 4.4): Please 
provide examples of the sectors where investments from China to Korea and those from 
Korea to China, respectively, have grown significantly as the result of liberalization of 
trade in services and investments under the FTA.  
Joint response from the Parties   
 
 China 's investment statistics are based on the classification of China Sectoral Classification 
System GB/T4754 -2011. 
Investments from China to Korea  
 The following table ind icated the sectors where investments have grown.  
 
Unit: 10,000$  
Sectors  
(China Sectoral Classification System GB/T4754 -2011)  Investment  
(2015)  Investment  
(2016)  
Construction  27.27  1018.19  
Transport,  storage and post services  70.71  350.78  
Information t ransfer, software and information technology 
services  380.48  19695.71  
Accommodation and catering  915.90  1041.30  
Scientific research and polytechnic services  1199.65  1608.89  
Education  9.49 11.00  
Culture, sports, and entertainment  4195.16  16884.32  
Sourc e: Ministry of Commerce . 
 
Investments from Korea to China  
 The following table indicated the sectors where investments have grown.  
 
Unit: 10,000$  
Sectors  
(China Sectoral Classification System GB/T4754 -2011)  Investment  
(2015)  Investment  
(2016)  
Constructi on 150 166 
Transport,  storage and post services  427 438 
Wholesale and retail trades  29299  35058  
Accommodation and catering  330 1298 
Leasing and commercial services  5679 11679  
Resident, repair and other services  200 389 
Education  3 25 
Source:  Ministr y of Commerce . 
 
Investments from Korea to China  
 The following are the sectors where 1) sectoral commitments are improved compared to 
those of GATS, and 2) investments have grown. Sectors not indicated in the table are either 
sectors where commitments are  the same as GATS or sectors where investments have not 
increased.  
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  Unit: 1,000$  
Sectors  
CPC classification  
(Corresponding investment categories according to the  
Korea Standard Industry Classification)  Investment  
(2015)  Investment  
(2016)  
1. Business service s 
B. Computer  and related services  
(Computer programming, consultancy and related activities)  4,855  26,924  
D. Real estate services  
(Real estate activities)  16,764  105,876  
 
3. Construction and Related Engineering services  
(Construction of building s, Civil en gineering and Specialized 
Construction activities)  3,526  6,467  
6. Environmental services  
(Waste collection, treatment and disposal services, Materials 
recovery, Remediation activities and other waste management 
activities)  242 583 
7. Financial services  
(Financ ial services, Insurance, Reinsurance, Pension Funding, 
Activities auxiliary to financial services and insurance)  168,944  274,242  
10. Recreational, cultural and sporting services  
(Creative, arts and entertainment activities,  
Sports activities, amusement and re creation activities)  6,299  9,168  
11. Transport services  
C. Air transport services  
(Air transport activities)  0 30 
Source:  Overseas Investment Statistics  of the Export -Import Bank of Korea.  
 
Investments from China to Korea   
 
 The following are the sectors whe re 1) sectoral commitments are improved compared to 
those of GATS, and 2) investments have grown. Sectors not indicated in the table are either 
sectors where commitments are the same as GATS or sectors where investments have not 
increased.  
Unit: 1,000$  
Sectors 
CPC classification  
(Corresponding investment categories according to the  
Korea Standard Industry Classification)  Investment  
(2015)  Investment  
(2016)  
1. Business services  
A. Professional services, F. Other business services  
(Professional, scientific and  other business services including 
management consulting, advertisement, design etc .) 2,741  50,654  
3. Construction and Related Engineering services  
(Construction of building s, Civil engineering and Specialized 
Construction activities)  190 2,836  
4. Distribution  services  
B. Wholesale trade services  
(Wholesale trade services)  13,833  25,400  
11. Transport services  
A. Maritime transport services  
(Sea and coastal transport activities)  91 1,091  
E. Rail transport services  
(Interurban rail transport)  91 176 
Source:  Foreign Investment Statistics of the Ministry of Trade, Industry and Energy . 
 
1.23.   Regarding paragraph 5.24 on Intellectual property rights (section 5.9): Japan 
would like to know which domestic laws and regulations are the legal ground for the 
right for broadcastin g organizations to authorize or prohibit reproduction of their 
broadcasts which is provided in Article 15.6 of the FTA.  
Joint response from the Parties   
 
 The right of reproduction of broadcasting organizations in relation to broadcasts  provided in 
Article  15.6(2) is the same with Article 15.7(2) (c). According to Article 45 of THE COPYRIGHT LAW 
OF THE PEOPLE'S REPUBLIC OF CHINA, a broadcasting organization has the right to forbid WT/REG370/2  
 
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  rebroadcasting, recording and copying their broadcasts without the permission  of the broadcasting 
organization.  
 
 The Copyright Act  of Korea  provides broadcasting organizations with the exclusive right to 
reproduce their broadcast s, as obligated under Article 15.6 of the FTA through the combination of 
Article 2.22  (definition of re production) and Article 84  (reproduction right s of broadcasting 
organization s). 
 
1.24.   Japan would like to know which domestic laws and regulations assure the 
opportunity for the applicant to respond to communications from the trademark 
authorities, to contest a n initial refusal, and to appeal judicially a final refusal to 
register, as provided in paragraph 1(b) of Article  15.14 of the FTA.  
Joint response from the Parties   
 
 In the TRADE MARK LAW OF THE PEOPLE'S REPUBLIC OF CHINA, it is stipulated in Article 29 
that Where, in the course of examination, the Trademark Office deems it necessary to require an 
explanation or amendment of a trademark registration application, it may require the applicant to 
provide an explanation or amendment.   
 
 In Article 30, it is st ipulated that w here the trademark for registration does not comply with 
the relevant provisions of this Law or is identical with or similar to another party's trademark which 
has been registered or preliminarily approved for use on identical or similar goo ds, the Trademark 
Office shall reject the application and shall not publish the trademark.   
 
 In Article 34, it is stipulated that w here a trademark registration application is rejected or 
publication is denied, the Trademark Office shall notify the applic ant in written form. The applicant 
may apply to the Trademark Appeal Board for a review within 15 days after receiving the notice. 
The Trademark Appeal Board shall make a decision within nine months after receiving the 
application, and notify the applicant  of its decision in written form. Under special circumstances, 
the time limit may be extended by three months with the approval of the administrative 
department for industry and commerce under the State Council. Against the decision of the 
Trademark Appeal  Board, the party concerned may institute an action in a people's court within 30 
days after receiving the notice.  
 
 For Korean side,  according to the Trademark Act: 1) Article 55, an applicant can respond to 
a refusal decision from a concerned authority b y submitting communications in writing; 2) Article 
66, when an applicant receives a decision of rejection of a trademark registration, he or she can 
appeal against such decision (initial refusal); and 3) Article 162, an applicant can file a lawsuit 
against  a trial decision (final refusal) . 
1.25.   Japan would like to know which domestic laws or regulations provide the legal 
ground for paragraph 3 of Article 15.18 of the FTA which provides the acts requiring the 
authorization of the breeder in respect of the propaga ting materials, such as production 
or reproduction (multiplication) for the purposes of commercial marketing, conditioning, 
offering for sale, selling or other marketing and importing or exporting.  
Joint response from the Parties   
 
 The legal ground for paragraph 3 , Article 15.18 of the FTA  is the REGULATION OF THE 
PEOPLE'S REPUBLIC OF CHINA ON PROTECTION OF NEW VARIETIES OF PLANTS  and its ' specific  
implementation rules.  
 
 For Korean side, t he Act on the Protection of New Varieties of Plants covers the act s 
mentioned.  
 
1.26.   Japan would like to know which domestic laws and regulations are the legal 
ground for Article  15.19 of the FTA which provides the obligation to protect the 
undisclosed information in accordance with Article 39 of the TRIPS Agreement.  
 For Chi nese side, t he legal ground for Article 15.19 of the FTA  is Article 10 of the  LAW OF 
THE PEOPLE'S REPUBLIC OF CHINA AGAINST UNFAIR COMPETITION , the REGULATIONS FOR THE WT/REG370/2  
 
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  IMPLEMENTATION OF THE DRUG ADMINISTRATION LAW OF THE PEOPLE'S REPUBLIC OF CHINA , 
the REGULATIONS ON PESTICIDE ADMINISTRATION , the REGULATIONS ON ADMINISTRATION OF 
VETERINARY DRUGS , the REGULATION ON THE MANAGEMENT OF FEEDS AND FEED ADDITIVES , 
and other  related laws and regulations.  
 
 For Korean side, t he legal ground for protecting a trade se cret is regulated under  
Articles 9 bis to 14 of the Unfair Competition Prevention and Trade Secret Protection Act.  
In accordance with Article 39.3 of the WTO TRIPS Agreement, pharmaceutical products are 
regulated under Article 88 of the Pharmaceutical Affa irs Act  (Protection of Materials Submitted) . 
Additionally, agrochemical products are regulated under Article 27 of the Agrochemical Control 
Act. 
1.27.   Japan would like to know which domestic laws and regulations provide the legal 
ground for paragraph 4 of Articl e 15.24 of the FTA which provides the award of payment 
by the losing party of court costs or fees and reasonable attorney 's fees in accordance 
with court order at the conclusion of civil judicial proceedings concerning copyright or 
related right infringeme nt, patent infringement, or trademark infringement, except in 
exceptional circumstances.  
Joint response from the Parties   
 
 For Chinese side, t he legal ground for paragraph 4 of Article 15.24 of the FTA  is Article 65 of 
the PATENT LAW OF THE PEOPLE'S REPUB LIC OF CHINA, Article 22 of the Several Provisions of the 
Supreme People's Court on Issues concerning the Application of Law in the Trial of Cases Involving 
Patent Disputes , Article 63 of the TRADE MARK LAW OF THE PEOPLE'S REPUBLIC OF CHINA,  Article 
17 of the Interpretation of the Supreme People's Court on Several Issues concerning the 
Application of Law in the Trial of Trade Mark Civil  Dispute Cases , Article 49 of the COPYRIGHT LAW 
OF THE PEOPLE'S REPUBLIC OF CHINA, and Article 26 of the Interpretation of the Supreme 
People's Court on Several Issues concerning the Application of Law in the Trial of Copyright Civil  
Dispute Cases . 
 
 For Korean side, p roviding the principle that the costs of a lawsuit are borne by the losing 
party, Articles 98 and 109 of the C ivil Procedure Act stipulate that the attorney 's fees shall be 
admitted as the costs of  a lawsuit within a certain limit. The criteria on how the attorney 's fees 
shall be calculated in the costs of a lawsuit are provided in Article 3 of the Rules on the In clusion of 
Attorney 's Fees in the Costs of a Lawsuit.  
 
1.28.   Regarding paragraph 5.25 on Intellectual property rights (section 5.9): Japan 
would like to know which domestic laws and regulations provide the legal ground for 
Article 15.23 of the FTA which provides  presumption of the right holder, especially, the 
designated person whose name is indicated in the usual manner in such work be 
presumed as the right holder in civil, administrative and criminal proceedings, involving 
copyright.  
Joint response from the Par ties  
 
 In paragraph 4, Article 11 of the COPYRIGHT LAW OF THE PEOPLE'S REPUBLIC OF CHINA, it 
is stipulated that i f no proof to the contrary is available, the citizen, legal person or other 
organization whose name appears on a  work shall be the author . 
 
 Article 8  (presumption of copyright holder s) and Article 67 bis (presumption of right holders 
of performance s, phonogram s and broadcast s) are the relevant provisions under Korea 's Copyright 
Act which implement Korea 's obligation under Article 15.23 of the F TA. 
 
 
 
 
 
 WT/REG370/2  
 
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  Questions from the delegation of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu  
 
Trade Environment  
Merchandise trade  
 
1.29.   Paragraph 1.5, page 4: Based on 2014 trade data, the Republic of Korea was 
China's 2nd source of imports an d its 5th destination for exports. China was the 
Republic of Korea's 1st source of imports and exports.  
 The China -Korea FTA entered into force on 20 December, 2015, yet the total 
volume of bilateral trade contracted in 2016. It seems that the expected boost in 
exports after the FTA was concluded did not materialize for either party.  
 
 Were there particular reasons for the contraction in bilateral trade in 2016, and 
what policies, if any, have been implemented since to stimulate exports?  
 
Joint response fro m the Parties   
 
 The contraction in bilateral trade in 2016 was mainly impacted by the worsening market 
conditions resulting from the slowdown in the global economy.  And the world trade volume of 
Korea  and China  decreased in 2016  as well . Conversely , although facing globally economic 
slowdown within the whole year, the China -Korea FTA positively  prevented  the bilateral trade 
getting worse.  
 
Provisions on Trade in Services and Investment  
China  
Sector -specific commitments  
 
1.30.   Paragraph 4.24, page 27: Pursuant to  Article 4.24, in professional services, 
China's commitments mirror those in its GATS schedule. In computer and related 
services and real estate services, China has removed a joint venture restriction present 
in its GATS schedule for certain subsectors.  
 Could  China please advise whether its removal of the above -mentioned joint 
venture restriction applies to other WTO Members as well?  
 
Joint response from the Parties   
 
 According to the text of the China -Korea FTA, this Agreement shall only apply to  China and 
Korea. At current stage, it is impossible for those specific commitments from both sides applying 
to other WTO members.  
 
Republic of Korea  
Sector -specific commitments  
 
1.31.   Pages 28 -30 (Table 4.6 + Paragraph 35): Compared to its GATS schedule, Korea 
seems t o have slightly liberalized the conditions of the facilities -based suppliers of 
public telecommunications services. Moreover, it has added commitments in internet 
access services and voice -over Internet (VoIP) services not present in its GATS 
commitments.  
a. Could Korea please provide details of the current status of foreign investment 
in facilities -based suppliers of the telecommunications market, with some 
examples, if possible, of specific cases?  
Joint response from the Parties   
 
 As of December 2015, for eign investors hold shares in about 20% of the facilities -based 
suppliers in Korea. Specifically, the foreign investment ratios are 48.91% in KT, 39.38% in SKT 
and 34.60% in LGU+.  
 WT/REG370/2  
 
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  b. Could Korea please also elaborate further on the reasons why it has added 
commitments in internet access services and voice -over Internet (VoIP) 
services to China?  
Joint response from the Parties   
 
 Internet access services and VoIP services did not exist when the GATS commitments were 
made , and it was unclear where they belong in the W120 classification system. After 
telecommunication technology development brought about  the emergence of  internet access 
services and VoIP services, not only the Korea -China FTA but all  of Korea 's FTAs have reflected 
Korea 's domestic law and clearl y state that these two services are public telecommunications 
services.  
Electronic Commerce  
 
1.32.   Paragraph 4.61, page 33: According to Article 9 of Chapter 13, which deals with 
Electronic Commerce in the China -Korea FTA, neither Party shall have recourse to 
dispute settlement (Chapter 20) for any matter arising under Chapter 13.  
 How would Korea and China resolve disputes should any issues arise under 
Chapter 13?   
 
Joint response from the Parties   
 
 The Parties establish the China -Korea FTA Joint Commission wh ich shall seek to resolve 
differences that may arise regarding the interpretation or application of this Agreement . If there is 
any issues arise under Chapter 13, both sides have the option to seek solution  from the Joint 
Commission.  
 
General Provisions o f the Agreement  
Intellectual property rights  
 
1.33.   Paragraph 5.22, page 37: According to Articles 4 and 28 of Chapter 15 of the 
China -Korea FTA, the Parties may provide more extensive protection for, and 
enforcement of, IPR under their respective laws than requ ired by Chapter 15, provided 
that the more extensive protection does not contravene the laws of Chapter 15. They 
also agree to provide measures to curtail repeated copyright and related right 
infringement on the Internet.  
 Could the Parties please explain  what extensive protection there could be for 
intellectual property rights and related rights infringement on the Internet?  
 
Joint response from the Parties   
 
 The measures have been implemented by China are as follows:  
 
1. Promote regional cooperation an d establish mechanism of reporting clues and investigating 
cases cooperatively; 2. Promote the cooperation of electric -commerce Big Data between the 
government and the industries to ensure the efficiency of information searching and evidence 
obtaining.  
  
 The measures have been implemented by Korea are as follows:  
 
 Article 103  of the C opyright  Act of Korea  provides for the so -called "notice -and-takedown" 
scheme , where by the right holder may ask the online service provider to take down infringing 
material from its service , as well as counter measures which can be utilized by the uploader.  
 
 Article 103 bis provides that the court may order online service providers to terminate or 
block access by certain accounts , etc.  
 WT/REG370/2  
 
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   Article 103 ter stipulates that a ri ght holder may ask the Minister of Culture to order the 
pertaining online service provider to provide the right holder with the personal information of the 
alleged copyright infringer.  
 
 Also, Article 104 requires special types of online service providers such as cyber lockers or 
peer-to-peer sites to adopt technical measures to disable illegal transmission or sharing of 
copyrighted works through their services.  
 
 In order to prevent illegal distribution of copyrighted works, the registration requirements 
and cancellation of "special type online service providers" have been revised, as specified in 
Article  22 of the Telecommunications Business Act and Article 29 of the Act 's Enforcement Decree , 
as registration requirements of special type value -added teleco mmunication service providers 
(Annex 3 -1 related to Article 29, Paragraph 9), thereby further reinforcing obligations of service 
providers.  
 
 The Korea Copyright Protection Agency investigates the information networks of online 
service providers (OSPs) and  issues correction recommendations such as warnings to user s 
responsible for copying and transmitting illegal reproductions and deletion and termination of 
transmission s, in case transmissions of illegal reproductions, etc. ha ve occurred in a repetitive 
manner, pursuant to Article 133 (3) of the Copyright Act , which was introduced in 2009.  
 
Questions from the delegation of Thailand  
 
Liberalization of trade and tariff lines   
 
1.34.   Paragraph 3.7: each Party agrees to progressively reduce or eliminate customs 
dutie s on originating goods of the Party in accordance with its Schedule to Annex 2 -A. 
Upon request of either Party, the Parties shall consult to consider the possibility of 
accelerating the reduction or elimination of customs duties. A Party may unilaterally 
accelerate the reduction or elimination of customs duties at any time if it so wishes. If a 
Party reduces its applied MFN rate after the entry into force of the Agreement that rate 
shall apply if it is lower than the applicable rate in its Schedule to Annex  2-a 
(Article  2.4).  
 In case the MFN rate is lower than the applicable rate in the FTA schedule, would 
the accelerating reduction or elimination of customs duties apply automatically? If so, 
how do the Parties notify each other?  
 
Joint response from the Pa rties  
 
 If a Party reduces its applied MFN rate to less than the applicable rate in its Schedule to 
Annex 2 -a, the applied MFN rate will be applied to the other Party, without any prior notification.  
 
Liberalization commitments  
 
1.35.   Paragraph 4.20: Annex 22 -A contains guidelines for subsequent negotiations in 
trade in services and investment. Subsequent negotiations are to be conducted based on 
a negative list approach covering the pre -establishment phase of investment and trade 
in services in mode 3. The Part ies agree to generate combined reservation lists17 
associated with Chapter 8 (Cross -Border Trade in Services), Chapter  9 (Financial 
Services), and Chapter 12 (Investment). The Parties shall ensure that the level of 
liberalization commitments of a specific sector is not decreased at subsequent 
negotiations. The Parties shall begin subsequent negotiations as soon as possible, but 
not later than two years after the Agreement's entry into force and shall endeavour to 
conclude such negotiations within two years of the starting date. 18  Guidelines for 
negotiations for trade in services and investment are found in Sections C and D of Annex 
22-A. 
 Have the parties commenced the subsequent negotiation? If yes, are there any 
improvements or changes resulting from such  a negotiation?  
 
 WT/REG370/2  
 
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  Joint response from the Parties   
 
 The subsequent negotiations based on a negative list approach  stipulated in Annex 22 -A of 
the Agreement have yet to start . 
 
Sector -specific commitments  
 
Table 4.5:  China: Sector -specific liberalization u nder the Agreement at national level, 
excluding mode 4 and horizontal limitations  
 
1.36.   Referring to Table 4.5 China: Sector -specific liberalization under the Agreement at 
national level on page 26 under Distribution services, stating that franchising shares fu ll 
commitments under GATS Sectoral Commitments, does it apply as National Treatment or 
is there any specific condition?  
Joint response from the Parties   
 
 The Franchising under Distribution services shares full commitments under GATS Sectoral 
Commitments b oth on Market Access and National Treatment . 
 
Institutional framework  
 
1.37.   Paragraph 5.11: The Parties establish a working group to conduct consultations 
on matters related to non -tariff measures (Article 2.13). The working group shall 
consider approaches that  may better facilitate trade between the Parties and shall 
present the results of its consideration preferably within 12  months.23 
 Footnote 23: The Parties have indicated that the working group on non -tariff 
measures was held on 11 January 2017.  
 
 We have  noted that the Parties have indicated that the working group on non -tariff 
measures was held on 11 January 2017. What is the outcome of the consideration of the 
working group?  
 
 The Parties mainly discussed the operating mechanism of the working group, an d both 
Parties agreed to exchange views on key NTM issues via e -mail after the meeting. During the 
meeting , the Parties  also discussed specific issues of each Party 's concern, and agreed to have 
further discussion on these issues . 
 
Environment   
 
1.38.   Paragraph 5.29: The Parties recognize that it is inappropriate to encourage 
investment by investors of the other Party by relaxing their environmental measures. 
The Parties should not waive or otherwise derogate from such environmental measures 
as an encouragement f or the establishment, acquisition or expansion of investments in 
its territory (Article 16.16).  
 Paragraph 5.30: Chapter 16 deals with environment and trade. The Parties 
recognize that economic development, social development and environmental protection 
are interdependent and mutually supportive components of sustainable development. 
They agree that environmental standards should not be used for trade protectionist 
purposes.  
 
 Paragraph 5.31.  They reaffirm their sovereign right to establish their own lev els of 
environmental protection and environmental development priorities, and to adopt or 
modify their environmental laws and policies. The Parties recognize the role that 
multilateral environmental agreements play in protecting the environment. They agree  
to enforce their environmental measures including laws and regulations. Neither Party 
may undertake environmental law enforcement activities in the territory of the other 
Party. Other provisions of Chapter 16 address environmental impact, bilateral 
cooper ation, and institutional and financial arrangements. Neither Party has recourse to 
dispute settlement for any matter arising under the Environment Chapter.  WT/REG370/2  
 
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  a. What is the relationship between the Environment Chapter and other Chapters, 
particularly the Invest ment Chapter and the Trade in Services Chapter?  
b. Does the Environment Chapter encourage the increase of environmental 
protection in the countries of the Parties?  
c. How do the Parties settle dispute, if any, for matters arising under the 
Environment Chapter?  
Joint response from the Parties   
 
a. The Environment  and Trade  Chapter (Chapter 16) stipulates  that it is inappropriate to 
encourage trade or investment by weakening or reducing the protections afforded in 
environmental laws, regulations, policies and practice s. 
In addition to Chapter 16, Chapter 12 (Investment) particularly obliges  the Parties  not to 
waive or derogate from their environmental measures as an encouragement for the 
establishment, acquisition or expansion of investments.  
b. Article 16. 3 of this Chapt er stipulates that  the Parties reaffirm each Party 's sovereign 
right to establish its own levels of environmental protection and its own environmental 
development priorities, and to adopt or modify its environmental laws and policies.  And 
each Party shall seek to ensure that those laws and policies provide for and encourage 
high levels of environmental protection, and shall strive to continue to improve its 
respective levels of environmental protection.  
In Article 35 of its Constitution, Korea sets forth pr ovisions on environmental rights and 
obligations of environmental protection. The Framework Act on Environmental Policy also 
states that the Act aims to "ensure that all citizens enjoy a healthy and pleasant life by 
preventing environmental pollution and e nvironmental damage. " This purpose is 
specified in detail in the Comprehensive National Environmental Plan, which is developed 
every 20 years to lay the policy framework for exercising environmental rights. Under 
this framework, the Environment Chapter of the Korea -China FTA promotes both 
countries ' environmental protection , serving as an opportunity to strengthen both 
countries ' effort s for environmental protection.  
c. Article 16.8 of this Chapter stipulates that "A Party may through the contact points 
reques t consultations regarding any matter arising under this Chapter. " Accordingly, 
both countries are using this consultation mechanism to resolve any problems that may 
arise under the provisions of Chapter 16.  
Question from the delegation of Turkey  
 
1.39.   According  to Chapter 2 regarding National Treatment and Market Access for Goods 
of the China -Korea FTA, staging categories for reduction or elimination of customs 
duties extend to 20  years. Do you find these provisions to be in line with the principle of 
"reasonabl e length of time"? In this regard, could you share information considering the 
Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs 
and Trade 1994 on Article  XXIV:5.  
Joint response from the Parties   
 
 The China -Korea FTA complies with the GATT and its understanding since each Party should 
eliminate tariffs on up to 85 -90% products in terms of tariff lines and import volume in the Korea -
China FTA, most of which should be eliminated within 10 years.  
 
__________