WT/REG370/M/1  
 
29 November 2017 
(17-6536) Page: 1/3 
Committee on Regional Trade Agreements  
Eighty -seventh  Session  
   
 
 
FREE TRADE AGREEMENT  BETWEEN CHINA  AND THE REPUBLIC OF KOREA  
(GOODS AND SERVICES ) 
NOTE ON THE MEETING OF 9 NOVEMBER 2017 
Chairman: Ambassador Walid DOUDECH (Tunisia)  
1.1.  The 87th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram  WTO/AIR/RTA/12/Rev.1 dated 30 October 2017 . 
1.2.  Under Agenda Item D.I of the Session, the CRTA considered the  Free Trade Agreement 
between  China and the Republic of Korea , goods  and services , (hereinafter "the Agreement").  
1.3.  The Chairman  said t he Agreement had entered into force on 20 December 2015.  It had been 
notifie d to the WTO by the Parties on 1  March 2016 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/REG3 70/N/1)  and under GATS  Article  V:7(a) as an 
Agreement providing for the liberalization of trade in services withi n the meaning of Article V of the 
GATS (document S/C/N/ 854). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites.  The Factual Presentation on the goods and services aspect s 
(document  WT/REG 370/1 dated 3 March 2017) and questions and replies on the Agreement 
(document WT/REG370 /2 dated 6 November 2017)  had been distributed . 
1.4.  The representative of China  thanked the Secretariat for its preparation of the Factual 
Presentation on the Agreement  and Canada,  the European Union, Japan, Thailand, Turkey and the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) for their 
interest and questions. She also thanked the delegation of Korea for its cooperation during the 
review process.  
1.5.  China had  started its FTA strategy in 2003 and considered  FTAs as an important platform for 
further opening up to the outside a nd speeding up domestic reforms, an effective approach to 
integrate China into the global economy and strengthen economic cooperation with other 
economies, as well as a valuable supplement to the multilateral trading system. China had signed 
15 FTAs with 2 3 trade partners a nd 11 FTAs were under negotiation  at that moment . 
1.6.  With a view to enhancing bilateral trade and investment ties, China and Korea had launched 
bilateral negotiations on the Agreement  in May 2012. After 14 rounds , the Parties had substantially 
concluded the negotiations at the end of 2014  and had signed the Agreement  on 1 June 2015 . The 
Agreement had entered into force on 20 December 2015.  
1.7.  There was progress in the delivery of commitments by both Parties under the FTA including 
tariff elimination , services liberalization , treatment of investments , and movement of natural 
persons. The  Agreement also involved  other areas including rules of origin , customs procedures, 
TBT, SPS, IPR, competition, e-commerce, trade and environment, economic cooperation, etc.  
1.8.  The implementation of the Agreement  had contributed  to the further deepening of economic 
ties between the Parties in a mutually be neficial manner. China continued  to be the largest trading 
partner of Korea, while Korea re mained China’s 5th largest trading partner globally. According to 
China’s statistics, two way trade had reached US$27 6 billion in 2015 and US$25 6 billion in 2016. WT/REG370/M/1  
 
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  In the first three quarters of 2017, two -way trade had reached US$202 billion with an 11% 
increase year on year. On trade in services, the bilateral trade value had reached US$30 billion in 
2016.  Korea had become  China’s 6th largest partner in trade in services in the world. FDI flows 
from Korea to China had reached US$4.8 billion in 2016 increasing by 18%, while direct 
investment flows from China to Korea had reached more than US$2 billion with a n annual  growth 
rate of 4%.  
1.9.  Since the entry into force of the Agreement , the business communities of both Parties  had 
had a healthy utilization rate of the Agreement. With the benefits provided by the Agreement and 
the deepening economic transformation of  both countries, China believe d that the positive 
momentum  would continue . 
1.10.   The China -Korea FTA was a milestone in the history of the bilateral relationship between the 
two countries. It was also a significant step in the implementation of China’s FTA strategy. The 
Parties would continue to work actively to promote and implement the Agreement and to make it a 
sound and comprehensive platform to further promote and develop bilateral trade and i nvestment . 
1.11.   The representative of the Republic of Korea  thanked the Secretariat for the preparation of 
the meeting and the Factual Presentation and Members for their interest and insightful questions 
on the Korea -China Free Trade Agreement . He also thanked China for its cooperation in preparing 
for the S ession.   
1.12.   Korea value d the Committee's work to ensure the transparency of RTAs and to evaluate 
their consistency with WTO rules. The process allowed Members to be informed of recent 
developments on other Membe rs' region al trade agreements and provide d opportunities for the 
deeper understanding  of RTAs .  
1.13.   The year 2017 marked the 25th anniversary of the establishment of diplomatic relations 
between Korea and China. The negotiations of the Agreement  had been initiated in May 2012  and 
concluded in June 2015 . The Agreement had entered into force in December 2015. The two-way 
trade in goods between Korea and China stood at US$211 billion in 2016 . Korea' s exports to China 
had amounted to US$124 billion, while the volume of imports from China was US$87 billion. 
Although trade between Korea and China had focused on manufacturing, Korea hope d to expand  
bilateral trade into other areas such as services.  
1.14.   The Agreement was a comprehensive and high -standard trade agreement that aim ed at 
fostering a favo urable environment for free trade and investment. Regarding trade in goods , the 
fourth tariff cut  would take place  the following year. He believe d that the Agreement was 
consistent with the WTO obligations of both Parties and it buil t upon the Parties ' WTO 
commitments in many areas.  
1.15.   In regard to services and in vestment, the Agreement provide d DDA-plus outcomes in 
service areas such as architectural and financial services. The Parties agreed to initiate further 
negotiations in trade in services and investment within two years of the entry into force  of the 
Agreement . Korea was consulting with China to initiate such negotiations the following month.  
1.16.   The Agreement  cover ed comprehensive areas  and include d separate chapt ers for 
e-commerce, competition  and IPR. Moreover, the Agreement contain ed a separate cooperation 
chapter setting forth provisions on the cooperation between local governments of the Parties. The 
chapter establishe d a new model for cooperation.  
1.17.   The Agreement  had contributed to invigorating the economic exchange between Korea and 
China through the expansion of bilateral trade and investment. Among the 17 implementing 
committees, 14 had already  held meetings . Specifically, the first Joint Commis sion meeting had 
been held in January 2017. At that time , the Parties  had acknowledged that the Agreement had 
played a significant role in promoting exports and imports . 
1.18.   He thank ed Members for their participation in the S ession and the Secretariat for its hard 
work. He also thanked the EU, Canada , Chinese Taipei, Japan, Thailand and Turkey for submitting 
their questions on the Agreement  and looked  forward to a fruitful discussion.  WT/REG370/M/1  
 
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  1.19.   The representative of the European Union  thanked the Parties for the comprehensive 
presentation and the Secretariat for preparing the Factual Presentation. The Agreement between 
China and Korea was an important and interesting Agreement as reflected in the large number of 
questions raised . The EU had noted the broad trade liberalization among the Parties over a ten-
year period and the elimination of tariffs on over 96% of goods corresponding to around 90% of 
imports by volume. The EU had submitted a long list of questions before the meeting covering 
trade in services, environment, economic cooperation, SPS, subsidies, State aid, IPR and 
government procurement. She commend ed China  and Korea for the ir comprehensive and useful 
replies.  
1.20.   The representative of Canada  thanked the Parties  for respon ding satisfactorily to Canada's 
questions.   
1.21.   The representative of Japan  thanked  China and Korea for their comprehensive presentation 
and for the answers to its written questions particularly in relation to investment and IPR. He also 
thanked the Secretaria t for the preparation of the Factual Presentation. Japan was interested in 
the implementation of the Agreement and would follow with particular attention how the Parties 
implement ed the parts on trade in services and investment. Given the late receipt of the answers 
from the Parties , Japan had  not had sufficient time to review them . Therefore , Japan reserved its 
right to submit additional questions.  
1.22.   The representative of Thailand  thanked China and Korea for the ir response  to Thailand's 
questions  on the liberalization commitments,  the institutional framework and the chapter on 
environment. Thailand did not have any additional  questions at that moment.  
1.23.   The representative of the United States  thank ed the Pa rties for their pre sentations and the 
Secretariat for the preparation of the Factual Presentation . He echoed the EU's comment on the 
strength of the Agreement and its wide coverage  which  corresponded to the expectations of an 
FTA of  high quality. However, h e noted that a large number of dutiable lines  with high average 
rates remain ed for one Party . The Unite d States found interesting the combination of a GATS -style 
approach for services and a negative list approach for investment , but was not sure how the two 
approaches would work together. Paragraph 4.8  of the Factual Presentation  referred to an Annex 
of non -conforming measures but it appear ed that it was a place holder. He was interested in 
knowing what progress had  been made in the negotiation of the non -conforming measures  in the 
investment chapter . He had also noticed the presence of national treatment commitments in both 
services and investment  and asked how that would be reconciled or if it would be addressed 
through the later negotiations of non-conforming measures . He asked i f there was any update  on 
the two year rendezvous  clause. Given the st rength of the structure of the A greement, the United 
States was surprised about the lack of robustness in the e -commerce chapter particularly given 
the importance of the digital economy for the economies  of both Parties . He was not sure about 
the intent behind the exclusion of e -commerce from dispute settlement and he was doubtful that 
such exclusion  would push the confidence level in that regard. At the same time, he acknowledged 
that the presentation s of the  Parties had indicated  that they might  address the issue  in the future .  
1.24.   The Chairman  said that consideration of the Goods and Services Aspects of the Free Trade 
Agreement between China and the Republic of Korea  had allowed the Committee to clarify a 
number of questions and it could now conclude oral discussion of the RTA in accordance with 
paragraph 11 of the Transparency Mechanism. If any delegations wished to ask follow -up 
questions they were invited to forwar d submissions in writing to the Secretariat by 16 November 
2017 and Parties were asked to submit replies in writing by no later than 30 November 2017. In 
accordance with paragraph  13 of the Transparency Mechanism all written submissions, as well as 
minutes  of the meeting would be circulated promptly, in all WTO  official languages, and would be 
made available on the WTO website.  
1.25.   The Committee took note of the comments made.  
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