WT/REG311/M/1  
 
3 December 2014  
(14-7040)  Page: 1/4  
Committee on Regional Trade Agreements 
Seventy-fifth Session    
 
FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND THE REPUBLIC OF KOREA  
(GOODS AND SERVICES) 
NOTE ON THE MEETING OF 10 NOVEMBER 2014  
Chairman: Ambassador Francisco Pirez Gordillo (Uruguay) 
1.1.  The 75th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4359 dated 2 October 2014. 
1.2.  Under Agenda Item B.III of the session, the CRTA considered the Free Trade Agreement 
between the United States and the Republic of Korea, (hereinafter "the Agreement").  
1.3.  The Chairman said that the Agreement had entered into force on 15 March 2012. It had been 
notified to the WTO by the Parties on 15 March 2012 under Article XXIV:7(a) of the GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG311/N/1) and under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/621). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG311/1 dated 1 September 2014) and written questions and replies (document WT/REG311/2 dated 31 October 2014) had been issued. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any 
general comments, then he would turn to the specifics of the Agreement, using the Factual 
Presentation to guide the debate. They would then  go through the questions and replies document. 
1.4.  The representative of Korea expressed apprec iation to the Secretariat for its hard work in 
preparing the session and the Factual Presentation, as well as to the Members for their insightful 
questions. He hoped the session would help furt her facilitate the WTO's Transparency Mechanism 
by enhancing Members’ understanding of the Korea-US, or "KORUS" FTA. 
1.5.  As Korea’s development history demonstrated, trade was an indispensable part of its 
economy and had played a critical role in creating jobs and growth. Korea was thus a staunch advocate of free trade and the multilateral trading system. In this context, the conclusion of the 
KORUS FTA was a firm demonstration of Korea’s commitment to a continued open economic 
policy. 
1.6.  Apart from the fact that it was the world’s largest economy, the US was Korea’s 3
rd largest 
trading partner and first destination for foreign direct investment. This made the KORUS FTA a 
natural choice for Korea. As a high-level, comprehensive FTA, the Agreement provided for further 
market access by eliminating import duties and liberalizing trade in services. It also included disciplines regarding important areas such as investment, intellectual property rights, government 
procurement, competition, SPS measures, technical regulations, customs, and transparency. 
Nearly all products were liberalized. Upon entry into force of the Agreement, 80% of US exports to Korea became duty-free, while Korean exporters enjoyed duty-free access for 82.1% of US tariff 
lines. As for industrial goods, duties on 96.1% of Korea's tariff lines and 94.9% of US lines would 
be eliminated within 5 years, and at the end of th e implementation period, all tariffs on industrial 
goods would be eliminated. Agricultural products would be fully liberalized, except for certain 
products such as rice, over a maximum of twenty years. Only 16, or 0.1%, of Korea’s tariff lines 
were excluded, and all US products we re subject to tariff elimination. WT/REG311/M/1 
 
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  1.7.  In services and investment, the Agreemen t provided GATS-plus outcomes for the Parties' 
respective services suppliers, including but not limited to business, educational, communication, 
construction, distribution, environment, and financial services. The Agreement adopted a 
“negative-list approach”, whereby all sectors were subject to commitments except those explicitly 
included in a list of reservations.  
1.8.  As a comprehensive FTA, its disciplines and commitments went beyond market access in 
goods and services and extended to other import ant areas. The Government Procurement Chapter 
ensured non-discriminatory access to listed central government entities on procurement above 
agreed value thresholds. The Agreement furthermore provided a high level of protection in the areas of intellectual property rights by committing to TRIPS-plus outcomes. It also included provisions on labour and environment, which provided a balanced approach to trade liberalization 
while confirming the Parties’ commitment to labour and environmental standards.  
1.9.  While it was premature to assess the impact of the Agreement after only two and a half 
years, its effects were already coming into view. Compared to the previous two years before entry 
into force, bilateral trade had increased 4.1% and U.S. investment in Korea had doubled. This was 
strong evidence that the FTA was serving as a driving force for the national economy by enhancing efficiency and facilitating trade and investment. It met all the criteria of a high-quality agreement 
that promoted trade in goods and services. It covered “substantially all the trade” in goods and 
provided “substantial sectoral coverage” in services, making it fully consistent with the provisions of Article XXIV of GATT and Article V of GATS. 
1.10.  The delegation thanked all Members for their participation, the Secretariat for its hard work, 
and the United States for its close cooperation an d looked forward to a fruitful discussion in the 
Committee. 
1.11.  The representative of the United States thanked the delegation and the Government of the 
Republic of Korea for their excellent cooperation in preparing for the meeting and for their 
statement, and welcomed the consideration of the United States-Korea Free Trade Agreement, by 
the Committee. The Agreement had strengthened the long-standing alliance and growing 
commercial ties between the United States and Ko rea, and had expanded economic opportunities 
for citizens in both countries. More broadly, the Agreement was a key component of the United States' commitment to deepening commercial and economic engagement in the Asia-Pacific region. It was the United States' most commercially significant free trade agreement in almost two 
decades. Since its entry into force on March 15, 2012, Korea had become the sixth-largest trading 
partner of the United States, with the United States as Korea’s second-largest. Two-way trade in goods had totalled $104 billion in 2013.  
1.12.  The Agreement was comprehensive – reflecting the United States and Korea’s commitment 
to fostering a favourable environment for free trade, investment, openness, and transparency. It had already generated new opportunities for farmers, ranchers, businesses, services providers, 
workers and consumers in both countries, further reaffirming their commitment to open markets 
and trade liberalization. On the first day the Agr eement had entered into force, duties on more 
than 82% of US tariff lines and more than 80 perc ent of Korean tariff lines had been eliminated, 
with 95% of consumer and industrial products becoming duty-free by 2016 and virtually all 
remaining tariffs were to be lifted by 2021. In addition, it had immediately eliminated or phased 
out tariffs and quotas on a broad range of products, with almost two-thirds (by value) of Korea's agriculture imports from the United States becoming duty-free upon entry into force.  
1.13.  US-Korea trade had grown since the Agreement entered into force in 2012. From 2011, 
before entry into force, to 2013, US exports of goods and services to Korea had increased, with 
services exports having increased by more than 25%. Korea had also seen a boost in its exports of 
goods and services to the United States. 
1.14.  In the area of services, which conti nued to show strong growth, the Agreement had 
accorded meaningful market access commitments, national treatment, and regulatory transparency across virtually all major services sectors. It provided benefits for businesses wishing 
to supply services cross-border, such as through electronic means, as well as businesses wishing 
to establish a presence locally in the other country and new opportunities for companies in the areas of financial, telecommunications, profession al, express delivery, audio-visual, health care, WT/REG311/M/1 
 
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  education, legal, and accounting services. It had also ensured a secure and predictable legal and 
regulatory environment in both countries, a priority of foreign investors.  
1.15.  Through the Agreement, the United States and Korea had both demonstrated their 
commitment to high standards for the protection of intellectual property which recognized the 
importance of strong and effective intellectual  property protection to the economies of the 
United States and Korea. The Agreement's multiple, cross-cutting transparency obligations, both in a separate chapter devoted to regulatory transparency and spread throughout other chapters of 
the Agreement, had substantially improved upon  previous policies and practices, and were 
facilitating the flow of trade and investment between the United States and Korea.  
1.16.  The delegation highlighted that the FTA reaffirmed and expanded upon the WTO’s 
Government Procurement Agreement (GPA) to provide for non-discriminatory treatment of goods 
and services of each Party in the other’s government procurement market. 
1.17.  The United States believed that the strong growth in foreign investment seen in the Korean 
market had been enhanced by its commitment to open its market, as well as the transparent, 
predictable business climate resulting from stronger regulatory and trade facilitation provisions, 
enhanced intellectual property rights protections, improved business services, and the pro-liberalization position signalled by the FT A. The reforms undertaken to implement the FTA 
made the Republic of Korea a more attractive place for investors and were creating new 
opportunities for the Korean people.  
1.18.  The representative of the European Union thanked the Parties for the comprehensive 
presentation of the Agreement and the Secretaria t for preparing the Factual Presentation. For the 
EU, the US-Korea FTA was a very comprehensive FTA, which would be conducive to expanding 
economic opportunities in both countries. Indeed , a fully-fledged and far-reaching FTA should be 
the goal of two industrialized and major trading countries. The Agreement resembled in many 
respects - for instance concerning the substance and level of ambition – the agreement that the 
EU and Korea had negotiated that had taken effect on 1 July 2011. 
1.19.  The EU noted the wide trade in goods liberalisation among the Parties as well as the 
significant improvements on the level of commitm ents on services compared to both countries' 
GATS commitments. The bulk of tariff liberalisation  occurred for both Parties in the first years of 
the implementation of the Agreement and, by the end of 2016, both Parties would comply with the 
substantially all trade criteria with more than 90% of their tariff lines liberalised. As regards 
market access for services, the GATS schedule had been "topped-up" with a separate list that 
added to the original commitments. While the EU had not yet completed the analysis of how the national treatment aspects were treated, it s eemed to correspond to the commitments taken for 
market access through the negative listing approa ch. The Agreement was inspiring, as it showed 
how it was possible to build on and improve commitments.  
1.20.  The delegation looked forward to learn mo re about the implementation and functioning of 
the Agreement not least for the elements that rela ted to the review clauses, to transparency for 
regional measures and to the movement of pers ons. The delegation apologised for the late 
submission of its questions and thanked th e Parties for their very rapid replies. 
1.21.  The representative of Chinese Taipei thanked the Secretariat for its hard work and the 
Parties for their replies to the questions raised  by her delegation. She would consult with her 
capital on any follow-up questions. 
1.22.  The representative of Thailand appreciated Korea's and the United States' comprehensive 
presentations and the Secretariat's hard work fo r preparing the Factual Presentation. He thanked 
the Parties for the responses and would submit any further questions in writing. 
1.23.  The representative of Turkey thanke d both Parties and the Secretariat for their 
presentations. She indicated that paragraph 3.27 mentioned the exchange of letters in June 2007 
and February 2011 through which the Parties had agreed upon vehicle emission standards in regulations relating to self-certification for motor vehicles safety standards on originating vehicles imported to Korea. The exchange of these letters had set up exemption schedules for US car 
exporters under certain sales thresholds from the Korean technical regulations regarding WT/REG311/M/1 
 
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  emissions, fuel economy and vehicle safety standards which should have been applied for reasons 
of environment protection and of safety in the absence of the FTA. Similarly, through the June 
2007 letters Korea had accepted the equivalence of US standards regarding motor vehicles safety instead of Korea's, for producers with sales below certain limits. Turkey requested the Parties' 
comments on the compatibility of such arrangements under WTO rules and principles. More 
specifically, if this favourable treatment was considered as an exemption from the MFN clause, how was it interpreted in WTO law especially with  regard to the TBT Agreement, as the FTA had 
favourable provisions for US cars with rega rd to Korean standards and security tests. 
1.24.  The representative of Korea indicated th at the answer to Turkey's question had been 
conveyed through the Secretariat. 
1.25.  The representative of the United States th anked the delegation of Turkey for its question. 
He referred to the answer to a similar question su bmitted by the delegation of Canada, indicating 
that some of the provisions, notably those relating to goods regulatory practices were applied on an MFN basis. The Agreement was a bilateral trad e agreement between the Parties and provisions 
relating to trade in goods were applied bilaterally.  With regard to the question or suggestion of a 
conflict, they had been clear that the Agreement was consistent with all their WTO obligations. 
1.26.  The Chairman said that consideration of the Goods and Services Aspects of the Free Trade 
Agreement between the United States and Kore a had allowed the Committee to clarify a number 
of questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 of the Transparency Mechanism. If an y delegation wished to ask follow up questions 
they were invited to forward submissions in writing to the Secretariat by 17 November 2014 and 
Parties were asked to submit replies in writing by no later than 1 December2014. In accordance 
with paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of this meeting would be circulated promptly, in all WTO official languages, and would be made 
available on the WTO website.  
1.27.  The Committee took note of the comments made. 
 
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