WT/REG375/2  
 
14 September  2017 
(17-4877) Page: 1/9 
Committee on Regional Trade Agreements  Original: English/Spanish  
 
FREE TRADE AGREEMENT  BETWEEN THE REPUBLIC  OF KOREA AND COLOMBIA  
(GOODS AND SERVICES)  
QUESTIONS AND REPLIE S 
 The following communication, dated 13 September  2017, is being circulated at the request 
of the delegations of the Republic of Korea and Colombia.  
 
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Question from the delegation of Canada  
 
1.1.  Section 5.10.3 refers to Chapter 16 of the Colombia -Republic of Korea Free Trade 
Agreement. Annex 16 -A COOPERATION of the Colombia -Republic of Korea Free Trade 
Agreement indicates that areas of co operation between th e Parties in respect of 
Chapter  16 may include, but shall not be limited to: ENVIRONMENT (b) trade -related 
aspects of the international climate change regime.  
 Would the Parties be in a position to provide examples of trade -related asp ects of 
the international climate change regimes that may be considered as part of cooperation?  
 
 Concrete discussion has not been developed between the Parties on cooperation in the area 
of climate change. The Parties may consider developing cooperative a ctivities in the areas 
indicated in the Chapter 16 including on the international climate change regime under the 
framework of the Korea -Colombia FTA.  
 
Questions from the delegation of El Salvador  
 
Provisions on Trade in Goods  
Rules of origin  
 
1.2.  Paragraph 3.34: In regard of the principle of territoriality, the conditions for 
acquiring originating status shall be fulfilled without interruption in the territory of one 
or both of the Parties. Nevertheless, an originating good exported from a Party to a 
third -party shall, when returned, be considered to be non -originating unless it is 
demonstrated to the satisfaction of the customs authorities that the returning good is 
the same as that exported, and has not undergone any operation beyond that necessary 
to prese rve it in good condition while being exported. However, a number of goods, 
listed in Annex 3 -B to the Agreement, shall be considered to be originating even if such 
goods have undergone operations and processes outside the territory of the Parties. 
Annex 3 -B lists the goods covered by provisions on outward -processing connected to the 
operations and processes performed in the Gaesong Industrial Complex (a special 
administrative industrial region located in North Korea) on materials exported there 
from Korea a nd subsequently re -imported by Korea (paragraph 1 of Annex 3 -B).1 
                                                
1 The 100 tariff lines (HS six -digit level) included in Annex 3 -B can be found in HS Chapters 
50 (silk); 55 (man -made staple fibres); 62 (apparel and clothing accessories); 65 (headgear); 
70 (glass  and glassware); 7 2 (iron and steel); 73 (articles of iron and steel); 82 (tools of base 
metal); 83 (miscellaneous articles of base metal); 84 (machinery  and mechanical appliances); 
85 (electrical machinery and equipment); 88 (aircraft); 90  (optical and te chnical inst ruments); 
91 (clocks and watches); 94 (furniture); and 96 (miscellaneous manufactured products).  WT/REG375/2  
 
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  Colombia may suspend the application of Annex 3 -B when an originating good included 
in the Annex is being imported under preferential tariff treatment into its territory in 
such increased qu antities and under such conditions as to cause, or threaten to cause, 
serious injury to its domestic industry (paragraph 7 of Annex  3-B).  
 In the context of outward -processing operations :  
 
a. Is it possible for Colombian inputs to be accumulated for the production of 
goods in the Gaes ong Industrial Complex ? 
 According to Article 2 of Annex 3B of the Agreement, the accumulation of Colombian inputs 
used in the manufacture of goods made in the Gae sung Industrial Complex is possible. However, 
materials of Colombian origin would have to enter South Korea for shipping and processing in the 
Gaesung Industrial Complex, then be reimported to South Korea for sending the final good to 
Colombia. For the pre vious effect, other provisions established in Articles 3.1 to 3.15 of 
Chapter  Three of the Agreement, as established in Article 2 of Annex 3B, must be complied with. 
In this case, the transformations or processes carried out in the Gaesung Industrial Compl ex will 
be considered as performed in South Korea.  
 
 In these cases, the total value of the non -originating inputs should not exceed 40% of the 
FOB price of the final merchandise for which the originating character is being requested. Likewise, 
the special  treatment in the Gaesung Industrial Complex is limited to the List of Goods included in 
Annex 3B of the Agreement (100 tariff subheadings).  
 
b. What is the procedure for verifying the origin of a good produced in that 
complex ? 
 The origin verification proced ure shall be carried out in accordance with Chapter Three, 
Annex 3 -B, paragraph 4 of the Agreement, which provides that each Party shall assist the 
competent authority of the importing Party to carry out the verification of the goods included in 
Annex 3B a nd in accordance with provisions on the subject.  
 
c. Would it be possible to carry out verification of origin visits to plants within 
that complex ? 
 Article 3.25 of the Agreement stipulates that the customs authority of the importing Party 
may conduct a verif ication process by means of verification visits to the premises of an exporter or 
a producer in the territory of the other Party.  
 
 Production activity in the Gaesung Industrial Complex has halted since February 2016. 
However, if the importing Party were t o require on -site origin verification on the Gaesung 
Industrial Complex once production resumes, additional discussions could take place via 
implementation channels between Korea and Colombia.  
 
d. Is it necessary to have a customs cooperation agreement with N orth Korea in 
order to carry out verification of origin visits ? 
 The Trade Agreement does not provide provisions on this subject.  
 
 However, production processes at the Gaesung Industrial Complex involve only part of an 
outward processing, and the final go ods are subject to the provisions in KCFTA. Hence, it follows 
that origin verification should be consulted between the Parties to this Agreement, instead of 
having a separate customs cooperation agreement with North Korea for verification purposes.  
 WT/REG375/2  
 
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  Provis ions on Trade in Services  
Scope and definitions  
 
1.3.  Paragraph 4.2 […] Financial services are also excluded from the scope of Chapter 9 
but a work programme on financial services is contained in Article 9.12 . 
a. Why were no specific disciplines and commitments negotiated in the area of 
financial services ? 
 Korea and Colombia mutually agreed to exclude financial services from Chapter 9 (Cross 
Border Trade in Services), for both Parties had little interest in supplying financial services in the 
other Party's territory.  
 
 At the time of the negotiation there was no mutual interest in acquiring commitments in 
financial services, but considering the possible growth of the commercial relationship, an 
evolutionary clause was established to jointly evaluate the inte rest of acquiring commitments in 
this sector.  
 
b. Why was a period of four years prescribed for developing disciplines on this 
subject ? 
 Both Parties considered that four years would be appropriate to reflect on the issue.  
 
1.4.  Paragraph 4.25: In relation to post al services (unbound under the GATS), Korea 
makes a broad reservation with respect to the exclusive right of the Korean Postal 
Authority for collecting, processing, and delivering letters. Some commitments, with 
limitations, are made under the Agreement fo r postal services which are unbound under 
the GATS. Coverage on telecommunications is broadly improved, while a number of 
restrictions on audiovisual (and broadcasting) services are maintained and some are 
introduced with respect to digital audio or video services, as compared to the GATS.  
 Was there any commitment with respect to the audiovisual coproduction 
agreements ? 
 
 Official co -production status, which confers national treatment on works covered by a 
co-production arrangement, may be granted to a co -production produced under such a 
co-production arrangement, as stipulated in Annex II of the Korea -Colombia FTA.  
 
1.5.  Paragraph 4.56. In relation to investment, nothing in the Agreement shall be 
construed to prevent a Party from adopting or maintaining tempora ry safeguard 
measures pursuant to the Party's laws and regulations with regard to payments and 
capital movements, inter alia , in the event of serious balance of payments or external 
financial difficulties or threat thereof.  
 In the event  of serious balance -of-payments difficulties, would the International 
Monetary Fund rules apply with some modifications or is reference only made to the 
rules contained in the IMF Agreement ? 
 
 Temporary safeguard measures adopted or maintained in the event of a serious balan ce of 
payments issue shall be consistent with the IMF Agreement, especially with the provisions on 
procedure of such measures, as stipulated in Annex 8 -C (Transfers).  
 
COMMENT S 
 
1.6.  Paragraph 4.22. As a consequence of the negative approach chosen, Korea expand s 
coverage of its commitments under the Agreement for most  sectors, as compared to its 
GATS commitments. Nevertheless, some new limitations are listed as non -conforming 
measures, in particular the requirement to establish an office in Korea as a condition to 
perform certain activities (applicable for a number of sectors, but not all). Korea is of 
the view that the commitment on establishment requirement or local presence is not 
covered under the GATS and that, consequently, this requirement was not required to be 
listed in its GATS Schedule.  WT/REG375/2  
 
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  Comment :  
Although th ere is no obligation in the GATS Schedule to list local presence 
requirements as such, in practice these Korean measures and requirements limit the 
number of foreign service suppliers and cross -border trade in many sectors since it is 
very difficult to est ablish an office in Korea as a requirement for supplying a service.  
Questions from the delegation of the European Union  
 
Provisions on Trade in Goods  
Technical barriers to trade  
 
1.7.  Paragraph 3.42: Reference is made  to the commitment  undertaken by the Parties 
(Article  6.12) to exchange information and experiences on their border control and 
market surveillance activities (except for confidential information).  
 Could the Parties submit further details on the actual implementation of 
Article  6.12 and, in particular, of the provision in recital (b) "ensure that border control 
and market surveillance activities are undertaken by the competent authorities, to 
which end these authorities may use accredited, designated, or delegated bodies, 
avoiding conflicts of interest between those bodies and the economic agents subj ect to 
control or supervision"?  
 
 As the Korea -Colombia FTA has been effective for only a short time since July 15 of last 
year, there has not yet been any consultation or prog ress with regard to  border control and 
market surveillance in the TBT Chapter.  
 
 Korea does not have authority  which undertake s border cont rol and market surveillance.  
Korea Customs Service may control products without Korea Certification ( KC). Korean Age ncy for 
Technology and Standards  (KATS) and entity accredited or designated by KATS may  undertake 
market surveillance.  
 
 According to point b of Article 6.12 on the Chapter of Technical Barriers to Trade, the 
Colombian entity that carries out border contro l activities corresponds to the Directorate on 
National Taxes and Customs - DIAN and the entity that carries out the activities of market control 
corresponds according to the type of product subject to technical regulation, normally corresponds 
to the Supe rintendence of Trade and Industry and National Institute for Foods and Drugs 
Surveillance.  
 
 The provision gives these authorities the possibility to rely on the accreditation, designation 
or delegation of bodies to be able to fulfil their functions accor ding to those established in the 
Single Regulatory Decree of the Trade, Industry and Tourism Sector - Decree 1074 of 2015, 
modified by Decree 1595 of 2015 in which it establishes the guidelines of the National Subsystem 
of Quality and clearly establishes t he roles of each of participants that make up this subsystem.  
 
1.8.  According to Article 6.9 on the Committee on TBT, the Committee's functions shall 
also include facilitating  the process for the negotiation of a mutual recognition 
agreement.  
 Could the Parties  give further details on the state of the play of the negotiations of 
a Mutual Recognition Agreement? When it is planned to be adopted?  
 
 As the Korea -Colombia FTA has been effective for only a short time since July 15 of last 
year, there has not yet been any consultation or progress  with regard to a m utual recognition 
agreement  (MRA) in the TBT Chapter.  
 
 Korea does not have authority  which undertake s border cont rol and market surveillance.  
Korea Customs Service may control products without Korea Certific ation ( KC). Korean Agency for 
Technology and Standards  (KATS) and entity accredited or designated by KATS may undertake 
market surveillance.  
 WT/REG375/2  
 
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  Customs -related procedures  
 
1.9.  Paragraph 3.65 : Reference is made  to Article  4.5 on "the use of risk management 
techniques in the administration of customs procedures ". According to this Article, each 
customs authority shall focus resources on high -risk shipments of goods and facilitate 
the clearance, including release, of low -risk goods.  
 Could the Parties give further details on the techniques/criteria used for 
identifying the high -risk shipments of goods?  
 
 In terms of selectivity, Korea Customs differentiates economic operators according to their 
degree of compliance with laws and regulations. The Authorized Economic Operator (AEO) 
program provides the basis for these efforts.  
 
 Some of the key techniques employed by Korea Customs in this respect include: the 
rule-based technique, according to the profiles of economic operators , types of goods handled, and 
their suppliers; and data mining, fo r which Korea Customs utili zes statistical techniques.  
 
Cooperation  
 
1.10.   Paragraphs 5.42 and subsequent: The Agreement contains several commitments 
on Cooperation (Chapter XVII and Annex 16 -A). In particular, Chapter 17 identifies 
cooperation modalities with respect to specific manufacturing sectors, categories of 
products, or particular services sectors.  
 Could the parties give an overview of the main activities undertaken so far in this 
respect?  
 
 The final document of the Agreement between the two countries contains a number of 
cooperation commitments (Chapter 17 "Coopera tion" and Annex 16 -A "Cooperation in Trade and 
Sustainable Development"). For instance, Chapter 17 includes different modalities of cooperation 
regarding to specific sectors, such as agriculture, fishing industry, energy, and small and 
medium -sized enterpr ises (SMEs) development, among others.  
 
 Korea and Colombia established the Joint Committee on Trade and Investment Pr omotion 
and Industrial Cooperation and the Joint Committee on Energy and Resources Cooperation as 
official channel s for bilateral cooperation in 2009.  Since then, the former committee has convened 
four ti mes and the latter three times.  
 
 With the support o f the Korean cooperation through the cooperation agreement signed 
between the Korea International Cooperation Agency (KOICA ) and the Ministry of Commerce, 
Industry and Tourism of Colombia (MINCIT ), entitled "Development Of MSMEs under the cluster 
scheme, s trengthening productivity and competitiveness policies in Colombia" , two projects have 
been funded through cooperation resources and implemented by the United Nations Industrial 
Development Organization (UNIDO) , Energy Sector Suppliers Development Project  and Export 
consortia in the Valle de Cauca region of Colombia . 
 
1.11.   Focusing on fisheries and aquaculture cooperation ( Article 17.4) , could the Parties 
present in details the cooperation  activities carried out so far? What are the measures 
taken and/or envisaged for combating illegal, unreported and unregulated fishing? Have 
the parties concluded a fisheries cooperation agreement as mentioned in Article 17.4, 
recital (f)? If so , could the  Parties give further details about its content?  
 There has been no cooperative activity between Korea and Colombia in the fisheries and 
aquaculture area.  
 WT/REG375/2  
 
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   For reference, Korea has recently amended the Distant Water Fisheries Development Act 
(effective fr om 6 Jan. 2015) and established the Fisheries Monitoring System. As for international 
cooperation to combat IUU (illegal, unreported and unregulated) fishing, Korea has taken the 
following measures:  
 
a. Signed a Memorandum of Understanding (MOU) with Thailand to combat IUU fishing  
(Aug 2016) and conducted education training* for Thai officials in Fisheries Monitoring 
Center on fisheries monitoring (1st session: March 2017, Bangkok Thailand / 
2nd session: Jun 2017, Busan Korea) . 
b. After being removed from the pre -identified IUU country list by the EU  (Apr, 2015), 
KOR-EU Joint Statement is currently in consultation (final draft is being circulated among 
states) . 
c. Memorandum of Understanding (MOU) signed between  Ministry of Oceans and 
Fisheries  and Environmental Justice Foundation (EJF) to strengthen 
surveillance/monitoring/control of vessels in West African waters (Jun 2014) . 
d. Accession to IMCS Network (May 2014) . 
Colombia has taken the following measures:  
a. The issue of the Joint External Circular signed by entities with administrative, police and 
judicial competence.  
b. The resolution 001026 of July 28, 2014 that adopts inspection and surveillance measures 
to control fisheries activities carried out by national and  foreign vessels.  
c. The implementation of the law on illegal Fisheries -Law 1851 of July 2017 that 
establishes measures against illegal fisheries in the maritime Colombian territory. This 
law modif ies the Law 13 of 1990 and the L aw 906 of 2004 -Code of crimina l procedure.  
d. The national roundtable against illegal and illicit fisheries in 2015.  
e.  The pacific roundtable against illegal and illicit fisheries.  
f. Starting with the National Action Plan against IUU fisheries l ed and coordinated by the 
AUNAP.  
1.12.   Focussing on S MEs cooperation ( Article 17.9) , could the Parties pres ent in detail  
the cooperation  activities carried out so far? What are the measures taken and/or 
envisaged for fostering more dialogue and exchange of information on mandatory 
procedures, enhanced access  to trade promotion networks , as mentioned in Article 17.9, 
recital (c)? What are the measures taken and/ or envisaged for encouraging public and 
private institutions related to small and medium -sized enterprises to cooperate in 
certain areas , as defined in  Article 17.9, recital (f)?  
 Korea has provided assistance to Colombia in increasing productivity of SMEs in industrial 
clusters through official development assistance since 2011. The cooperation received from Korea 
for SMEs has been made through KOICA wi th the Export Consortia in Valle del Cauca. The 
Development Project of the Export Consortium in the department of Valle de Cauca began in 
December 2015. The objective of this Program is to improve the competitiveness and access to the 
international market of member companies of the export consortia that are developed in the Agro 
industrial and cosmetic sectors and to increase the levels and the security of the jobs generated. 
The project was extended two years and included the departments of Cauca, Nariño, Risaralda and 
Quindío. It will finish in December 2018. MINCIT, PROCOLOMBIA, SENA, local Chambers of 
Commerce, Universities and local authorities are involved for the sustainability of the project.  
 WT/REG375/2  
 
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  Questions from the delegation of Mexico  
 
Financial services  
 
1.13.   Under the GATS, Colombia took partial commitments on financial services. Under 
the Agreement, the sector is unbound. The Parties agree to meet four years after the 
entry into force of the Agreement to discuss the viability and convenie nce of 
incorporating financial services into the Agreement (Article 9.12).  
 Mexico would like to know the fundamental reason for not incorporating financial 
services into the Agreement and whether there is any intention of doing so in the future . 
 
 Korea and Colombia mutually agreed to exclude financial services from Chapter 9 
(Cross -Border Trade in Services), for both Partie s had little interest in supplying financial services 
in the other Party's territory , but considering the possible growth of the comm ercial relationship, 
an evolutionary clause was established to jointly evaluate the interest of acquiring commitments in 
this sector . The viability of incorporating financial services into the Agreement would vary pending 
the outcome of negotiations betwee n Korea and Colombia in the future.  
 
Recognition  
 
1.14.   Under Article 9.9, the Agreement mirrors the provisions in paragraphs 1 -3 of 
Article  VII of the GATS. It also states that the MFN provisions (Article 9.3) shall not be 
construed to require a Party to accord  recognition to the education or experience 
obtained, requirements met, or licences or certifications granted in the territory of the 
other Party, where recognition is granted autonomously of or by agreement or 
arrangement with a third -party.  
 Under Annex 9-A (on professional services), the Parties commit to encourage, 
where they agree, the relevant bodies in their respective territories to develop mutually 
acceptable standards and criteria for licensing and certification of professional services 
suppliers of the other Party and to provide recommendations on mutual recognition to 
the Joint Commission (Article 19.1). Annex  9-A also contains the Parties' commitments 
with respect to the encouragement of relevant bodies to develop procedures for the 
temporary li censing of professional service suppliers; or for fostering the development 
of mutual recognition agreements or arrangements among relevant professional bodies, 
the feasibility of developing model procedures for the licensing and certification of 
professio nal services suppliers, and other issues of mutual interest related to the supply 
of professional services.  
 
 Mexico would like to know if the relevant professional bodies have come together 
at all to develop mutual recognition agreements and procedures fo r the temporary 
licensing of professional service suppliers . 
 
 Korea and Colombia do not have any plan to discuss mutual recognition agreements (MRAs) 
on professional services at the present time. It is a topic of interest for Colombia bu t the Parties 
will initiate discussion when more progress is achieved with similar standards.  If the Parties are to 
initiate discussions for possible MRAs, it will be appropriate to have a meeting between the 
government s to exchange possible sectors, authorized bodies, and contact points. There is no plan 
to hold such a meeting in the near future.  
 
Questions from the delegation of Thailand  
 
Communication services  
 
1.15.   Paragraph 4.25: In relation to postal services (unbound under the GATS), Korea 
makes a broad reservation with re spect to the exclusive right of the Korean Postal 
Authority for collecting, processing, and delivering letters. Some commitments, with 
limitations, are made under the Agreement for postal services which are unbound under 
the GATS. Coverage on telecommunica tions is broadly improved , while a number of 
restrictions on audiovisual (and broadcasting) services are maintained and some are 
introduced with respect to digital audio or video services, as compared to the GATS.  WT/REG375/2  
 
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   According to the underlined phrase  in par agraph 4.25, please indicate specific 
subsectors or activities under the improved  coverage on telecommunication?  
 
 The restriction in the GATS Schedule of Korea, that a license may not be granted to a 
juridical person more than 33% of whose voting share is  owned by a person, has been deleted in 
the KCFTA. The limitation that the aggregate foreign shareholding in KT must be no more than 
33% has also been deleted, and the regulation that a person may own n o more than a 3% share 
in KT has been relaxed to 5 %. 
 
Distribution services  
 
1.16.   Paragraph 4.27: Distribution services are subject to a number of restrictions in 
Korea's GATS Schedule. Under the Agreement, the level of liberalization of this sector is, 
as a whole, improved and more transparency is achieved . 
 Acco rding to the underlined phase in paragraph 4.27, which means / actions ha s 
Korea undertaken to improve the level of liberalization of distribution services sectors 
and to achieve more transparency?  
 
 In the GATS Schedule of Korea, modes 1 and 2 of commission agents' services, wholesale 
trade services, and retailing services were unbound, and mode 3 of these services were only 
partially liberalized, with ENT conditions. In the KCFTA, Korea has liberaliz ed its distribution 
services market to Colombia without any ENT conditions, except for some sensitive products such 
as liquor, tobacco, and meat. Other distribution services, on which Korea had not made any 
commitments in the GATS Schedule, were liberalize d as a whole.  
 
 Korea has achieved more transparency by specifying the existing measures in Annexes I and 
II of the KCFTA.  
 
Environmental services  
 
1.17.   Paragraph 4.29: Under the GATS, Korea has commitments, with some limitations, 
except for sanitation and similar services . Under the Agreement, Korea removes the 
restriction on the number of suppliers in sewage services as well as the economic needs 
test on disposal services (listed in Korea's GATS Schedule). However, it has reservations 
for possible future m easures for treatment and supply of potable water; collection and 
treatment of municipal sewage; collection, transportation, and disposal of municipal 
refuse; sanitation and similar services; and nature and landscape protection services 
(except for environ mental impact assessment services).  
 According to the underlined phase in paragraph 4.2 9, please provide a clear 
definition of "similar services" and please give example of such activities.  
 
 "Similar services" may refer to activities aiming at maintaining  a clean environment other 
than sanitation services, such as gritting and salting of roads.  
 
Competition and consumer policy  
 
1.18.   Paragraph 5.33: Under Chapter 13, the Parties commit to maintain competition 
laws that promote and protect the competitive process  in their markets by proscribing 
anti-competitive practices. They also agree to strengthen their cooperation in relation to 
the enforcement of their respective competition laws and policies. The Chapter also 
contain disciplines on notification and foresees  consultations to foster mutual 
understanding between the Parties and technical assistance, while maintaining 
confidentiality when exchanging information on competition -related matters. 
Cooperation on consumer protection is also foreseen (Article 13.8).  WT/REG375/2  
 
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   Have the Parties commenced any actions for the purpose of cooperation under this 
agreement? If yes, what actions have the Parties made?  
 
 Parties  would have cooperated if there was any issue of mutual interest in the competition 
and consumer policy area. Ho wever, no discussion is ongoing at present because it has been only 
about a year since the entry into force of the Korea -Colombia FTA, and the Parties have not been 
able to find a proper cooperation project yet.  
 
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