WT/REG311/1  
 
1 September 2014  
(14-4984)  Page: 1/52  
Committee on Regional Trade Agreement    
 
 
 FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN  UNITED STATES AND THE REPUBLIC OF KOREA  
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the consideratio n of the Free Trade Agreement between the 
United States and the Republic of Korea has been drawn up by the WTO Secretariat 
on its own responsibility and in full consultation with the Parties. The factual 
presentation reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply official endorsement or acceptance by the Secretariat of such terminology. Th e report has been drawn up in accordance 
with the rules and procedures contained in the Decision for a Transparency Mechanism 
for Regional Trade Agreements (WT/L/671) and thus does not imply any value judgement by the Secretariat regarding the contents of the Agreement. 
Any technical questions arising from this report may be addressed to 
Ms Jo-Ann Crawford (tel: +41 22 739 5422). Any statistical questions arising from this report may be addressed to Ms Rowena Cabos (tel: +41 22 739 5185). 
 
 WT/REG311/1 
 
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Table of Contents 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Merchand ise trade ..................................................................................................... 4  
1.2   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 8  
2.1   Background  Information ............................................................................................. 8  
3   TRADE IN  GOODS ........................................................................................................ 9  
3.1   National Treatment and Mark et Access in Trad e in Goods ................................................ 9  
3.1.1   Liberalization of  trade and ta riff lines ......................................................................... 9  
3.1.2   Liberalization  schedule by  product ............................................................................ 11 
3.1.2.1   The United States ............................................................................................... 11 
3.1.2.2   Korea ............................................................................................................... . 11 
3.1.3   Special regimes and non-tariff measures ................................................................... 13 
3.1.4   Othe r Measur es ..................................................................................................... 14 
3.2   Rules of origin .......................................................................................................... 14 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 15 
3.4   Regulatory provisions on trade in goods ....................................................................... 15 
3.4.1   Customs-re lated procedures .................................................................................... 15 
3.4.2   Sanitary and Phytosanitary Measures and Technical Barriers to Trade ............................ 15 
3.4.3   Safeguard mechanisms ........................................................................................... 16 
3.4.4   Anti-dumping and countervailing measures ............................................................... 17 
3.4.5   Subsidie s and stat e aid ........................................................................................... 17 
3.5   Sector Specif ic Liberalization ...................................................................................... 17 
3.5.1   Agriculture ............................................................................................................ 17 
3.5.1.1   Tariff- rate qu otas ................................................................................................ 17 
3.5.1.1.1   Tariff-rate quotas maintained by the United States ................................................ 18 
3.5.1.1.2   Tariff-rate quotas maintained by Korea ................................................................ 18 
3.5.1.2   Agricult ural Safe guards ........................................................................................ 18 
3.5.1.3   State trading in  agricultural  products ..................................................................... 18 
3.5.2   Textiles and Apparel ............................................................................................... 19 
3.5.2.1   Textile Safeguards .............................................................................................. 19 
3.5.3   Pharmaceutical Prod ucts and Medi cal Devices ............................................................ 19 
3.5.4   Other regulations ................................................................................................... 20 
3.5.4.1   Competition ....................................................................................................... 20 
4   PROVISIONS ON TRADE IN SERVICES ....................................................................... 20  
4.1   Scope and definitions ................................................................................................ 20 
4.2   Denial of benefits ..................................................................................................... 21 
4.3   General provisions on trade in services and investment .................................................. 21 WT/REG311/1 
 
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  4.3.1   MFN and na tional treatment .................................................................................... 22 
4.3.2   Local presence ...................................................................................................... 22 
4.3.3   Senior Management and Boards of  Direct ors .............................................................. 23 
4.3.4   Movement of  natural persons .................................................................................. 23 
4.3.5   Other Measur es on Inve stment ................................................................................ 23 
4.4   Liberalizat ion Commitments ....................................................................................... 24 
4.4.1   The United States .................................................................................................. 24 
4.4.1.1   Horizont al Commitments ...................................................................................... 25 
4.4.1.2   Sector-spe cific commitments ................................................................................ 25 
4.4.2   Korea ................................................................................................................... 28 
4.4.2.1   Horizont al Commitments ...................................................................................... 29 
4.4.2.2   Sector-spe cific commitments ................................................................................ 29 
4.5   Regulatory Provisions ................................................................................................ 33 
4.5.1   Domestic regulation ............................................................................................... 33 
4.5.2   Recognition ........................................................................................................... 33 
4.5.3   Subsidies .............................................................................................................. 34 
4.5.4   Safeguards ........................................................................................................... 34 
4.6   Sector specific provis ions on trade in services ............................................................... 34 
4.6.1   Telecommunications ............................................................................................... 34 
4.6.2   Financial Services .................................................................................................. 35 
4.6.3   Express De livery Services ....................................................................................... 36 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 37  
5.1   Tran sparency ........................................................................................................... 37 
5.2   Current payments and capital movements .................................................................... 37 
5.3   Exceptions ............................................................................................................... 38 
5.4   Accession and Withdrawal .......................................................................................... 38 
5.5   Institutio nal framework ............................................................................................. 38 
5.6   Disput e settlement ................................................................................................... 39 
5.7   Relationship with other agr eements concluded by the Parties .......................................... 40 
5.8   Government  procurement .......................................................................................... 41 
5.9   Intellectual property rights ......................................................................................... 43 
5.9.1.1   Trademarks and geographical indications ................................................................ 43 
5.9.1.2   Copyrights and related rights ................................................................................ 43 
5.9.1.3   Patents .............................................................................................................. 43 
5.10   Electron ic commerce ............................................................................................... 44 
5.11   Labour ................................................................................................................. . 44 
5.12   Envi ronmen t .......................................................................................................... 45 
ANNEX 1 ....................................................................................................................... . 46 
ANNEX 2 ....................................................................................................................... . 50 
 WT/REG311/1 
 
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  Key Facts 
 
Parties to the Agreement:  The Repu blic of Korea and the United States  
 
Date of Signature:   30 June 2007  
 
Date of Entry into Force:  15 March 2012  
 
Date of Notification:   15 March 2012  
 
Full implementation:            March 2031 
 
 
1  TRADE ENVIRONMENT 
1.1.  The Free Trade Agreement between the United  States and the Republic of Korea (hereafter 
"the Agreement"), covering goods and services, is the 13th RTA notified by the United States to the 
WTO and the 11th notified by Korea. 
1.2.  In 2012, the United States' GDP was estimated at US$16,245 billion, while that of Korea was 
US$1,130 billion. In the same year, the United Stat es ranked third among the world's exporters of 
goods and first among the world's importers. Its merchandise exports amounted to 
US$1,546 billion (8.4% of global exports), while imports amounted to US$2,336 billion 
(representing 12.55% of global imports). In the sa me year, Korea ranked 5th in terms of exports 
and 6th in terms of imports; its total merchandise exports amounted to US$548 billion, representing 2.98% of global exports, while im ports amounted to US$520 billion and represented 
2.79% of global imports. The structure of their merchandise exports and imports are similar, with 
both countries exporting and importing mainly manufactures. The United States exports more 
agricultural products than does Korea (11.1% compared to 2.3%), while fuels and mining products 
account for a larger proportion of Korea's imports (43.7%) compared to the United States 
(20.8%).
1 
1.3.  With respect to trade in commercial services, the United States in 2012 was the world's 
second largest exporter and importer of commerc ial services, with total exports of US$630 billion 
and imports of US$417 billion (respectively 14.38% and 10.02% of world exports and imports). In 
the same year Korea ranked as the 8th largest ex porter and importer of commercial services with 
total exports of US$110 billion and imports of US $105 billion (2.52% of both world exports and 
imports). The Parties' overall trade to GDP ratios are considerably different, 110.9 (2010-12) for 
Korea and 29.5 for the United States (2010-2012). 
1.1  Merchandise trade 
1.4.  Chart 1.1 shows global and bilateral trends in merchandise trade for the Parties for the period 
2001-2013. The United States' total imports and ex ports rose steadily from 2001 to 2008 with the 
trade deficit widening over the period as the growth in imports outpaced that in exports. Imports 
and exports fell sharply in 2009, but picked up in 2010 to reach US$2,328 billion and 
US$1,578 billion in 2013. Korea's merchandise trade more than doubled between 2002 and 2008, with imports rising from US$160 billion to US $435 billion, and exports from US$172 billion to 
US$422 billion. After falling in 2009, trade recovered in 2013 to reach US$516 billion and 
US$560 billion, for imports and exports respectively. From 2001 to 2007, Korea ran a slight trade 
surplus which became a small deficit in 2008. Si nce then, Korea has run a small trade surplus. 
1.5.  Bilateral trade expanded during this period but at a much slower rate. United States' exports 
to Korea increased from $22 billion in 2001 to $42 billion in 2013, while Korea's exports to the 
United States increased from $31 billion to $62 billion over the same period. Korea has run a consistent trade surplus with the United States over the period 2001 to 2013. 
                                               
1 WTO Trade Profiles, dated March 2014 WT/REG311/1 
 
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  Chart 1.1 United States and Korea: Merc handise bilateral trade and with world 
0100200300400500
01,0002,0003,000
2001 2003 2005 2007 2009 2011 2013B. Korea 2001-2013
(US$ billions)
Imports from US (Right Axis)
Exports to US (Right Axis)
Total Imports
Total Exports
0100200300400500
01,0002,0003,000
2001 2003 2005 2007 2009 2011 2013A. United States 2001-2013
(US$ billions)
Imports from Korea (Right Axis)
Exports to Korea (Right Axis)
Total Imports
Total Exports
 
Source: UNSD, Comtrade database. 
1.6.  The commodity structure of trade between the Parties, as well as of their imports and exports 
to the world in the period 2009-2011, which corresponds to the three years prior to the entry into 
force of the Agreement, is shown in Chart I.2 on the basis of the Harmonized System (HS) sections.  
1.7.  Chart 1.2 indicates a strong correlation between the commodity structure of trade between 
the Parties and their global imports and exports.  Over the period 2009-2011, the United States' 
three largest export product categories – machinery, vehicles, and chemicals – made up 51.7% of 
its total exports and accounted for 51.8% of Korea's imports from the United States. Over the 
same period, Korea's three largest export product categories – machinery, vehicles and base metals – made up 64.7% of its total exports and accounted for 76.7% of the United States' imports from Korea. WT/REG311/1 
 
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  Chart 1.2 United States and Korea: produc t composition of merchandise trade, annual 
average (2009-2011) 
49
20755328United States' imports from Korea (%)
26
19
108554333211United States' Global Imports (%)
34
229887634Korea's Global Exports (%)
32
12
8887633327Korea's imports from United States (%)
34
25118333210Korea's Global Imports(%)
26
15
12 8655543211United States' Global Exports(%)Total: US$ 50 billion Total: US$ 1,944 billion
Total: US$ 424 billionTotal: US$ 1,271 billionTotal:  US$ 462 billion
Total: US$ 38 billion
 
Source: UNSD, Comtrade database. 
1.2  Trade in services and investment 
1.8.  Table 1.1 depicts the United States' trade in se rvices by type of activity both globally and in 
bilateral trade with Korea for 2009-2010, revealing that the country is a net exporter. The United States' top global export categories in 2010 were business services (23.8% of total services exports), royalties and licence fees (19.9%) and trav el services (19.5%). In its trade with Korea in 
2010, royalties and licence fees are the top export category (26.3%), followed by travel (22.1%), 
and business services (15.8%). The United States' main global import sector was business services (24.6% of services imports), followed by travel (20.5%) and insurance (16.8%), while in its trade 
with Korea, imports of transportation and travel services dominate.  
1.9.  The United States is a net provider of foreign direct investment both to the world and to 
Korea. Exports of FDI flows to Korea fell in 2010 compared to the previous year, though stocks of 
FDI increased over the same period. WT/REG311/1 
 
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  Table 1.1 The United States' trade in commercial services and investment with Korea and world, 
2009-2010 
 
Service item World  Korea 
 Export Import  Export Import  
2009 2010  2009  2010  2009  2010 2009 2010  
Total services 487,867 530,274  346,020  368,036  12,758  15,105 6,384 7,756  
Travel 94,191 103,505  74,118  75,507  220 3,343 1,419 1,598  
Passenger fares 26,103 30,931  25,137  27,279  89 87 1,820 2,053  
Other transportation 35,533 39,936  42,591  51,202  1,761  1,984 2,302 2,976  
Freight 17,466 19,768  29,795  37,915  433 477 2,191 2,862  
Ocean 3,244 4,047  21,633  27,749  65 66 1,514 1,995  
Port 10,569 11,973  4,687  6,437  241 286 671 865  
Other freight 3,652 3,747  3,474  3,730  127 125 6 2 
Port services 18,067 20,168  12,797  13,288  1,328  1,507 111 114  
Ocean 10,327 11,642  1,554  1,614  899 1,037 28 29 
Port 7,530 8,312  11,190  11,600  429 470 83 85  
Other freight 210 213 53 73 0 0 0 0 
Royalties and licence fees 97,183 105,583  29,849  33,450  3,234  3,968 56 80  
Education 19,948 21,291  5,357  5,677  2,144  2,201 36 38 
Financial services 62,444 66,387  13,597  13,803  603 754 152 166  
Insurance services 14,427 14,605  63,614  61,767  265 267 37 52 
Telecommunications 10,053 11,095  7,493  8,006  80 78 45 56  
Business, professional, and 
technical 117,793 126,296  83,559  90,585  1,998  2,385 518 737 
Computer and information 
services 13,483 13,766  17,047  19,385  137 128 38 42  
Computer and data 
processing services 8,591 8,771  16,277  18,394  100 78 37 40 
Database and other 
information services 4,892 4,996  770 991 37 51 2 2  
Management and consulting 
services 29,111 30,858  22,118  22,888  170 257 101 118 
Research, development, and 
testing services 17,994 20,954  16,582  18,541  187 183 109 125  
Operational leasing 7,663 7,158  1,912  2,111  116 118 0 0 
Accounting, auditing, and 
bookkeeping services 1,015 994  2,162  2,394  (a) (a) (a) (a) 
Advertising 4,223 4,429  2,380  3,312  28 12 26 114 
Architectural, engineering, 
and other technical services 5,599 6,170  1,005  946 (a) (a) (a) (a) 
Construction 1,126 742 673 482 (a) (a) (a) (a) 
Industrial engineering 4,942 6,042  3,707  3,516  (b) (b) 11 37  
Installation, maintenance, 
and repair of equipment 12,077 13,652  5,938  6,527  552 777 17 (b) 
Legal services 7,256 7,303  1,638  1,532  309 267 59 46  
Medical services 2,691 2,876  879 1,019  (a) (a) (a) (a) 
Mining 2,512 2,252  691 644 (a) (a) (a) (a) 
Sports and performing arts 1,049 986 493 548 (a) (a) (a) (a) 
Trade-related services 4,153 4,718  1,220  1,478  (a) (a) (a) (a) 
Training services 1,670 1,958  913 984 (a) (a) (a) (a) 
Other business, 
professional, and technical 1,232 1,437  4,202  4,279  (a) (a) (a) (a) 
Other 10,192 10,646  705 759 2,364  38 0 0 
 World  Korea 
 Outward Inward  Outward Inward  
 2009 2010  2009  2010  2009  2010 2009 2010  
Total FDI stocks 3,547,038 3,908,231  2,114,501  2,342,829  26,813  30,165 13,503 15,213  
Total FDI flows 282,686 328,905  152,892  228,249  3,678  2,337 501 1,567  
Note: Data in accordance with North American Industry Classification System (NAICS). 
a Not available. b Suppressed to avoid disclosure of  data of individual companies.  
1.10.  Table 1.2 shows Korea's trade in services by type of activity, both globally and in bilateral 
trade with the United States for 2009 to 2011, revealing that the country is a net importer of 
services. Korea's top global export categories in 2011 were transportation (39.6% of total services 
exports), business services (20.2%), and construction  (16.2%). In its trade with the United States 
in 2010, transportation is the top export category (43.4%), followed by business services (40.8%), 
and travel (9.9%). Korea's main global import sector in 2011 was business services (36.5% of 
services imports), followed by transportation (28. 3%) and travel (19.8%), while in its trade with 
the United States, imports of business services, transportation and royalties and licence fees 
dominate. WT/REG311/1 
 
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  1.11.  Korea is a net provider of foreign direct investment to the world. In 2011, Korea's total 
FDI stock in the United States was in surplus while in terms of FDI flows Korea is a net exporter to the United States.  
Table 1.2 Korea's trade in commercial services  and investment with United States and 
world, 2009-2011
 
Service Item World United States 
Exports Imports  Exports  Imports  
2009 2010  2011 2009  2010  2011  2009  2010  2011 2009 2010 2011  
Total 
commercial services 
a 72,439  86,252  93,573 79,494  93,893  98,210  10,329  12,098  13,400 20,629  24,464 25,066  
Transportation 
services 28,693  38,982  37,057 23,451  29,675  27,797  3,790  5,246  4,678  4,357  5,794 5,891  
Travel 9,819  10,359  12,304 15,040  18,780  19,463  1,177  1,199  992 4,755  5,089 5,436  
Communication 
services 725  834 792 1,227  1,460  1,464  279  262 221 461  235 355 
Construction 
services 14,553  11,977  15,185 2,806  2,302  3,092  - - - - - -  
Insurance  340  515 419 735  882 805 597  -326 163 164  193 152 
Financial 
services 2,280  2,736  3,367 708  843  884 - - - - - -  
Computer and 
information 
services 218  234 424 401  496 559 - - - - - - 
Royalties and 
licence fees 3,199  3,145  4,321 7,188  9,031  7,302  1,242  785 1,549  4,461  5,684 4,490  
Other business 
services 12,088  16,834  18,911 27,094  30,422  35,827  3,244  4,932  5,798  6,432  7,470 8,742  
Personal, 
cultural and 
recreation services 523  637 794 846  1,022
 1,018  - - - - - -  
 World United States 
 Outward Inward  Outward  Inward  
 2009 2010  2011 2009  2010  2011  2009  2010  2011 2009 2010 2011  
Total FDI 
stocks 115,450 144,853  173,002 117,732  134,234  133,665  21,101  24,189  29,220 25,546 28,394 29,786  
Total FDI flows 20,260 26,821  26,989 6,586  8,117  10,247  3,015  3,198  5,055  1,127 1,524 1,559  
- no data 
a Excludes government services, n.i.e. and maintenance and repair services. 
Source: Bank of Korea and the United  States authorities; WT O Statistics Database and OECD (Bilateral trade 
in services for 2011, FDI data with world and bilateral FDI with US for 2011). 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 2.1.  The Parties notified the goods and serv ices aspects of the Agreement to the WTO, 
respectively, as an agreement forming a free trade area under GATT Article XXIV:7(a) and the 
Understanding on the Interpretation of GATT Article XXIV; and under GATS Article V:7(a) as an agreement liberalizing trade in services.
2  
2.2.  The Agreement is composed of 24 Chapters  and related annexes (Table 2.1). A number of 
confirmation letters are also an integral part of the Agreement. Measures related to trade in goods 
are principally contained in Chapters 2-10. Tariff elimination commitments are spread out over a 20 year period (2012-2031); most other commitments in the area of trade in goods, as well as the 
commitments undertaken in the area of trade in  services, have applied fully since March 2012. 
Trade in services is generally defined to include modes 1, 2 and 4 of the GATS; liberalization is mainly governed by Chapter 12 on Cross-Border Trade in Services. Investment provisions, 
including all measures falling under mode 3 of the GATS, are covered by Chapter 11 on 
Investment, and by the Chapters on Financial Services and Telecommunications. The Agreement 
also contains provisions relating to competition policy, labour and environmental policy, government procurement, intellectual property rights, electronic commerce, and dispute 
settlement provisions. 
                                               
2 WTO documents WT/REG311/N/1 and S/C/N/621, dated 16 March 2012.  The text of the Agreement is 
available, together with its Annexes, on the Parties' official Webs ites (URL addresses: http://www.fta.go.kr  and  
http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text    WT/REG311/1 
 
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  Table 2.1 Chapters and Annexes of the Agreement 
Chapters and annexes Title/Description  
Preamble  
Chapter 1 Initial Provisions and Definitions  
Chapter 2  National Treatment and Market Access for Goods  
Chapter 3  Agriculture  
Chapter 4 Textiles and Apparel  
Chapter 5 Pharmaceuticals and Medical Devices  
Chapter 6 Rules of Origin and Origin Procedures  
Chapter 7 Customs Administration and Trade Facilitation  
Chapter 8 Sanitary and Phytosanitary Measures  
Chapter 9 Technical Barriers to Trade  
Chapter 10 Trade Remedies  
Chapter 11 Investment  
Chapter 12 Cross Border Trade in Services  
Chapter 13 Financial Services  
Chapter 14 Telecommunications  
Chapter 15 Electronic Commerce  
Chapter 16 Competition-Related Matters  
Chapter 17 Government Procurement  
Chapter 18 Intellectual Property Rights  
Chapter 19 Labou r 
Chapter 20 Environment  
Chapter 21 Transparency  
Chapter 22 Institutional Provisions and Dispute Settlement  
Chapter 23 Exceptions  
Chapter 24 Final Provisions  
Annex I Non-conforming measures for Services and Investment 
Annex II Non-conforming measures for Services and Investment  
Annex III Non-conforming measures for Financial services  
Source: Free Trade Agreement between the United States and Korea. 
3  TRADE IN GOODS 
3.1  National Treatment and Ma rket Access in Trade in Goods 
3.1.  Under Chapter 2 each Party accords national  treatment to the goods of the other Party in 
accordance with Article III of GATT 1994. Annex 2-A contains the exceptions scheduled by the 
Parties to the national treatment rule, as well as import and export restrictions. Both the United 
States and Korea have exempted actions authoriz ed by the Dispute Settlement Body of the WTO 
and measures taken to address market disruption pursuant to procedures incorporated into the WTO Agreement. In addition, the United States has exempted controls on the export of logs of all 
species; and any measure under existing provisions of the Merchant Marine Act of 1920 from 
national treatment. 
3.2.  The Parties may not increase any existing customs duty, nor adopt any new customs duty on 
an originating good, except as otherwise provided for in the Agreement, including such measures 
not inconsistent with their Schedule following a unilateral reduction or as authorized by the WTO DSB (Article 2.3). No transition period is explicitly stated in the Agreement.  
3.1.1  Liberalization of trade and tariff lines 
3.3.  Trade liberalization covers Chapters 1-97  of the Harmonized System (HS). Article 2.3 
provides for the progressive elimination of customs duties in accordance with various staging categories listed in each Party's schedule to Annex 2-B (Tariff Elimination Annex). For both Korea 
and the United States, the base rates to which reductions apply are the rates contained in their 
respective MFN schedules on 1 January 2006. Tariff elimination started on 15 March 2012, and subsequent reductions take place on 1 January of each year. Tariff liberalization commitments are 
spread out over a 20 year period (2012-2031); customs duties on bilateral imports not fully 
liberalized at entry into force are to be eliminated according to a different timetable for each staging category. Article 2.3 also foresees the possibility of accelerated tariff elimination.  
3.4.  In an exchange of letters in February 2011, the Parties modified their tariff staging for certain 
automotive products and pork. This modification is taken into account in the following liberalization tables.  WT/REG311/1 
 
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  3.5.  Table 3.1 shows tariff and trade liberalization offered by the United States to Korea under the 
Agreement. In 2012, 36.8% of the United Stat es' schedule was duty free on an MFN basis, 
corresponding to 54.3% of its imports from Korea in 2009-2011.3 Upon the entry into force of the 
Agreement, the United States liberalized  another 46.2% of lines which accounted for an additional 
19.7% of its imports from Korea. Further tariff el iminations will take place between 2013 and the 
end of the implementation period in 2026. By 2026, all tariffs will be liberalized.  
Table 3.1 Tariff elimination commitments under the Agreement and corresponding 
average trade values 
United States 
Duty phase-out 
period Number of lines % of total lines in 
United States' tariff 
schedule Value of United States' 
imports from Korea 
(2009-2011) in million 
US$ % of United States' 
total imports from 
Korea 
2009-2011 
MFN duty free 
(2012) 3,866 36.8 25,358.2  54.3 
2012 4,854 46.2  9,200.7  19.7 
2013 12 0.1 0.2 0.0 
2014 372 3.5 275.2  0.6 
2016 611 5.8 9,284.0  19.9 
2017 1 0.0 0.0  0.0 
2018 91 0.9 28.6 0.1 
2021 619 5.9 2,523.1  5.4 
2023 20 0.2 1.0 0.0 
2026 65 0.6 0.0  0.0 
Total 10,511  100.00  46,671.1  100.0 
Note: For tariff lines subject to TRQs at the MFN and preferential level, only the out-of-quota duty is 
included in the calculations. 
Based on the HS 2012 nomenclature. Source:  WTO estimates based on data  provided by the United States. 
3.6.  As shown in Table 3.2, 16.2% of Korea's tariff lines were duty free on an MFN basis in 2012, 
corresponding to 39.6% of Korea's total imports from the United States in 2009-2011.4 Following 
the Agreement’s entry into force, Korea liberalized  an additional 61.6% of lines, representing 
30.8% of its imports from the United States between 2009 and 2011. Liberalization continues until 
2031 at which point 99.7% of tariff lines, corresp onding to 98.9% of imports from the United 
States will be duty free. A total of 35 lines will remain subject to duties.  
Table 3.2 Tariff elimination commitments under the Agreement and corresponding 
average trade values  
Korea  
Duty phase-out 
period Number of lines % of total lines in 
Korea's tariff 
schedule Value of Korea's  imports 
from United States 
(2009-2011) in million 
US$ % of Korea's total 
imports from United 
States 2009-2011 
MFN duty free 
(2012) 1,983 16.2  16,444.4  39.6 
2012 7,529 61.6 12,800.6  30.8 
2013 9 0.1 13.8  0.0 
2014 1,019 8.3 7,135.8  17.2 
2016 596 4.9 1,913.5  4.6 
2017 2 0.0 61.6 0.1 
2018 55 0.4 376.3  0.9 
2020 1 0.0 0.0 0.0 
2021 802 6.6 1,576.2  3.8 
2023 53 0.4 59.3 0.1 
2026 137 1.1 698.3  1.7 
2027 2 0.0 2.5 0.0 
2028 1 0.0 9.8  0.0 
2029 6 0.0 0.0 0.0 
                                               
3 Of the 10,511 tariff lines in the United States ' schedule, 9,365 lines (89.1%) are subject to ad valorem  
duties; 685 lines (6.5%) to specific rates, 307 lines (2.9%) to compound rates, 7 lines are mixed rates; and 147 lines (1.4%) are other rates. For tariff lines with compound and mixed rates, the Secretariat has used the 
ad valorem  part of the line in its calculations. 
4 Of the 12,232 tariff lines in Korea's schedule, 12,137 (99.2%) are subject to ad valorem duties, while 
95 lines are subject to mixed duties.    WT/REG311/1 
 
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  Duty phase-out 
period Number of lines % of total lines in 
Korea's tariff 
schedule Value of Korea's  imports 
from United States 
(2009-2011) in million 
US$ % of Korea's total 
imports from United 
States 2009-2011 
2031 2 0.0 0.1  0.0 
Remain dutiable 35 0.3 458.9  1.1 
Total 12,232  100.00  41,551.1  100.0 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the calculations. 
Based on the HS 2012 nomenclature. Source:  WTO estimates based on data provided by Korea. 
3.1.2  Liberalization schedule by product 
3.1.2.1  The United States 3.7.  Table 3.3 shows the United States' tariff libe ralization by HS section. The lines subject to 
liberalization more than ten years after the Agreemen t's entry into force fall in HS Sections I, II, IV 
and XII. 
Table 3.3 United States: Tariff eliminat ion under the Agreement, by HS section
 
HS 
section  MFN 
average
% Total No. 
of lines MFN 
duty-free 
(2012) Number of duty-free lines under the Agreement 
2012  2013  2014  2016  2017  2018 2021 2023  2026  
I 7.7 569 251 104   3 45  29 74  63  
II 3.9 558 150 301 2  88 1 9 6  1 
III 3.4 69 17 31  1 1 14  3 2   
IV 11.5 677 152 226 7 10 96  50 135  1 
V 0.6 204 154 50          
VI 3.5 1,714  530 857 2 234 76   15   
VII 3.7 375 86 133   18 43   95   
VIII 4.3 220 42 168   2   8   
IX 2.4 240 138 33    14   55   
X 0.0 275 275          
XI 9.0 1,592  211 1,157    156   68   
XII 13.4 195 35 137   3    20  
XIII 5.2 298 99 143   4 6   46   
XIV 3.0 105 48 52  2    3   
XV 1.9 988 536 377   20 21   34   
XVI 1.7 1,346  696 518  65 30   37   
XVII 2.4 252 131 92   10 13   6   
XVIII 2.9 512 170 315  2    25   
XIX 1.9 33 18 15          
XX 3.6 282 120 145  3 4   10   
XXI 0.0 7 7          
Total 4.7 10,511  3,866 4,854  12 372 611 1 91 619 20 65 
Note: For tariff lines subject to TRQs at the MFN and preferential level, only the out-of-quota duty is 
included in the tariff-related calculations; calculation of MFN averages includes AVEs provided by USA authorities; for preferential tariffs with non- ad valorem  components, only the ad valorem  part 
of the rate was included in the calculation of the tariff averages. 
 Based on the HS 2012 nomenclature. Source: WTO Secretariat estimates based on  data provided by the United States. 
3.1.2.2  Korea 
3.8.  In the case of Korea, those lines subject to liberalization ten or more years after the 
Agreement's entry into force fall in HS Sections I-IV and VI (Table 3.4). The 35 lines that are not 
fully liberalized fall in HS  Sections I, II and IV. WT/REG311/1 
 
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Table 3.4 Korea: Tariff elimination und er the Agreement, by HS section  
HS 
section MFN 
avg. 
% Total 
No. of 
lines MFN 
duty-
free 
(2012) Number of duty-free lines  
No. of lines 
remaining dutiable 
Avg. Final Tariff 
(Dutiable) %  2012 
2013 
2014 
2016 
2017 
2018 
2020 
2021 
2023 
2026 
2027 
2028 
2029 
2031 
I 20.9 760 21  138  200 35  2  286 25 41     12  145.3  
II 99.8 676 29 209 8 43 102 1 22 1 147 10 78  1 6 2 17 125.0  
III 13.4 108  50  4 40 1 3  6 3 1       
IV 24.0 539 3 96 1 78 179  20  126 11 17 2    6 5.0 
V 3.8 392 51  320  5 11    5         
VI 7.5 2,298 174 1,812  208 47  8  45 4        
VII 6.6 381 10  315  22 16    18         
VIII 7.7 242 28 214                
IX 5.7 314 43  18  93 62    98         
X 0.0 288 288                 
XI 9.7 1,302 31  1,231  7 33             
XII 10.1 100  100                
XIII 7.8 343 1 304  24 10    4         
XIV 5.2 118 5 105  7     1         
XV 4.2 1,035 410  571  46 8             
XVI 5.7 2,044 557 1,198  209 23    57         
XVII 5.8 333 80  215  12 25    1         
XVIII 6.6 586 98 422  54 5    7         
XIX 3.4 81 47  34                
XX 5.4 277 92 177  7     1         
XXI 0.0 15 15                  
Total 13.3 12,23
2 1,983 7,529 9 1,019  596 2 55 1 802 53 13
7 2 1 6 2 35 111.4  
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related 
calculations; for the calculation of averag es, specific duties are excluded and the ad valorem  parts of 
alternate rates are included. 
 Based on the HS 2012 nomenclature. Source: WTO Secretariat estimates based on data provided by Korea. 
3.9.  Chart 3.1 presents a disaggregated view of Korea's tariff liberalization by HS Chapter. Tariffs 
will continue to apply in 8 chapters. Chapters with the highest tariffs are 12 (oil seeds), 7 (vegetables) and 4 (dairy products) with preferential tariffs of 390%, 145% and 101%, 
respectively. In Chapters 7, 8 and 12 the preferential tariff is lower than the MFN rate. WT/REG311/1 
 
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  Chart 3.1 Korea: Average of du tiable rates, by HS Chapter 
0100200300400500
04 07 08 10 11 12 18 19HS Chapter
MFN PreferentialAverage rate of duty (%)  Average rate of duty (%)  
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related 
calculations; for the calculation of  averages, specific rates are excluded and the ad valorem parts of 
alternate rates are included.  
Source: WTO Secretariat estimates ba sed on data provided by Korea. 
3.1.3  Special regimes and non-tariff measures 
3.10.  The Agreement prohibits waivers of customs du ties that are conditioned on the fulfilment of 
a performance requirement (Article 2.4). The Part ies agree to allow duty-free temporary admission 
for goods detailed in Article 2.5, for goods re-enter ed after repair or alteration (Article 2.6), and 
for commercial samples, and advertising materials (Article 2.7).  
3.11.  As regards non-tariff measures, except as provided in the Agreement, the Parties may not 
adopt or maintain any prohibition or restriction on the import of any good from the other Party, except in accordance with Article XI of the GATT (Article 2.8). Such a prohibition also includes 
export and import price requirements, import licensing conditioned on the fulfilment of a 
performance requirement and voluntary export restraints. No Party may, as a condition for engaging in imports or for the import of a good, require a person of another Party to establish or 
maintain a contractual or other relationship with a distributor in its territory. The Parties may 
restrict the import from the other Party of a good from a non-Party, when the Party maintains restrictions on the import or export of such a good from the non-Party. 
3.12.  Upon entry into force of the Agreement, each Party shall notify the other Party of any 
existing import licensing procedures, and subsequently of any change thereto at least 20 days 
before the new procedure or modification takes effect (Article 2.9). No Party may apply an import licensing measure to a good from another Party unless it has provided such a notification. Neither 
Party may adopt or maintain a merchandise processing fee on originating goods. All fees charged 
in connection with the import of goods must represent the approximate cost of services rendered. A current list of fees charged in connection with the import or export of goods must be made 
available on the Internet (Article 2.10).  WT/REG311/1 
 
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  3.13.  Korea committed to amend its Special Consumption Tax and Annual Vehicle Tax in order to 
reduce and align taxes on engine displacements and agreed not to modify its Subway Bonds or 
Regional Development Bonds so as to increase the existing disparity in bond purchase rates between categories of vehicles (Article 2.12). Korea also committed not to adopt new taxes based 
on vehicles' engine displacement, nor to modify an existing tax to increase the disparity in tax 
rates between categories of vehicles. 
3.14.  Both Parties maintain tariff rate quotas under the Agreement (Section 3.5.1.2 below). 
3.1.4  Other Measures 
3.15.  In Article 2.13, the Parties recognize "Bourbon Whiskey" and "Tennessee Whiskey", as well 
as "Andong Soju" and "Gyeongju Beopju" as distinctive products. The Parties may not permit the sale of any product as such, if it has not been manufactured in the other Party in accordance with 
the laws and regulations of the Party. 
3.2  Rules of origin 3.16.  Disciplines regarding rules of origin are set out in Chapter 6 of the Agreement, with 
additional provisions applicable to textiles and clothing in Chapter 4 and Annex 4-A (Specific Rules 
of Origin for Textile or Apparel Goods). These are described in the section on Textiles and Clothing below. A good is considered as originating, an d therefore eligible for preferential treatment 
(Article 6.1) when it (a) is wholly obtained or pr oduced entirely in the territory of one or both of 
the Parties; (b) is produced entirely in the territory  of one or both of the Parties and (i) each of the 
non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in Annex 4-A or Annex 6-A, or (ii) the good otherwise satisfies any 
applicable regional value content or other requirements specified in Annex 4-A or Annex 6-A, and 
the good satisfies all other applicable requirements of Chapter 6; or (c) it is produced entirely in the territory of one or both of the Parties exclusively from originating materials.  
3.17.  Detailed product-specific rules are found in Annex 4-A and Annex 6-A, mostly at either the 
HS heading level (4-digit), or HS subheading level (6-digit), depending on the product.  
3.18.  Full cumulation between the Parties is allowed under the Agreement both in terms of 
materials and production processes between the Parties (Article 6.5).  
3.19.  Article 6.2 defines methods to be used to calculate regional value content (RVC).
5 
De minimis provisions and exceptions are provided for in Article 6.6 and Annex 6-B, respectively. Additional rules in Articles 6.7-6.11 clarify how certain materials (accessories, spare parts or tools; 
fungible goods and materials; sets of goods; packaging materials and containers; and indirect 
materials) are to be treated/valued when determining whether a good is originating. Article 6.13 (transit and transhipment) allows originating goods to transit through the territory of the non-
Party provided that no further processing takes place in the non-Party other than unloading, 
reloading, or any other operation necessary to preserve the good in good condition or transport it to the territory of a Party and that the originating goods remain under customs control in the 
territory of a non-Party.  
3.20.  Preferential treatment may be claimed either through a written or electronic certification by 
the importer, exporter or producer contai ning information detailed in Article 6.15,
6 or the 
importer's knowledge if the importer has reliable information that the good is originating. The 
certification may apply to a single shipment or multiple shipments of identical goods within any 
period specified in the written or electronic certification but not exceeding 12 months from the date of certification.
7 Certifications are valid for four years after the date of issue.8 
                                               
5 The RVC can be calculated using the Build-down, the Build-up or the Net Cost methods, the latter 
being used only for automotive goods only. Details are given in Article 6.2. 
6 Relevant information for certificatio n includes the name of the certifyi ng person, HS tariff classification, 
information demonstrating that the good is originating, date of certification and, in the case of a blanket 
certification, the period covered by the certification (Article 6.15.2). 
7 A certification is not required if the customs value of the import does not exceed US$1,000 or the 
equivalent in the currency of the impo rting Party, or a higher amount established by th e importing Party unless WT/REG311/1 
 
- 15 - 
 
  3.21.  Verification of whether a good imported is an originating good may be carried out by means 
of written information requests or questionnaires  to the importer, exporter or producer; and/or 
visits to the premises of an exporter or producer in the territory of the other Party to review records or observe facilities, in accordance with procedures agreed between the importing and 
exporting Parties.
9 A Party may deny preferential tariff treatment to an import where the importer, 
exporter or producer fails to provide information in response to a written information request or questionnaire; failure by the exporter or producer to provide access to records; or if the Party finds 
a pattern of conduct indicating that the importer , exporter or producer has provided false or 
unsupported declarations or certifications that an imported good is originating. A Party conducting a verification shall provide its final determination to the importer in writing along with the factual findings and the legal basis for the determination (Article 6.18). 
3.3  Export duties and charges,  and quantitative restrictions 
3.22.  In Article 2.8, except as otherwise provided in the Agreement, the Parties may not adopt or 
maintain any prohibition or restriction on the export of any good from the other Party, except in 
accordance with Article XI of the GATT. Exceptions include the controls on the export of logs of all 
species scheduled by the United States (Annex 2-A). In accordance with Article 2.11, the Parties may not adopt or maintain any duty, tax, or other charge on the export of any good to the other 
Party, unless the duty, tax or charge is also adopted or maintained on the good when destined for 
domestic consumption. 
3.4  Regulatory provisions on trade in goods 3.4.1  Customs-related procedures 
3.23.  Chapter 7 - Customs Administration and Trade Facilitation - contains disciplines relating to 
customs procedures. In particular, the Parties commit to publish their respective laws, regulations, and procedures on the Internet, and maintain inquiry points concerning customs matters. Each 
Party shall maintain or adopt rules for the efficient release of goods (Article 7.2). Other provisions 
dealing with confidentiality, express shipments, penalties, and advance rulings are dealt with in Articles 7.6, 7.7, 7.9 and 7.10, respectively. The Parties agree to enhance automation of customs 
procedures, through making electronic systems accessible to customs users, endeavouring to use 
international standards, working towards developing electronic systems which are mutually compatible and developing a set of common data elements and processes in accordance with World Customs Organization Customs Data Model and related guidelines. If an importing Party 
suspects unlawful activity, it may request the exporting Party to provide specific confidential 
information normally collected in connection with the import of goods. Specific customs cooperation provisions regarding trade in textiles and apparel goods are contained in Article 4.3 of 
Chapter 4.  
3.4.2  Sanitary and Phytosanitary Meas ures and Technical Barriers to Trade  
3.24.  In Chapter 8, - Sanitary and Phytosanitar y Measures - the Parties reaffirm their existing 
rights and obligations under the WTO Agreement on Sanitary and Phytosanitary (SPS) measures. 
The Chapter does not create new SPS rights and obligations; there is no recourse to the Agreement's dispute settlement mechanism for SPS matters. The Parties agree to establish a Committee on Sanitary and Phytosanitary Matters (Article 8.3), whose objective is to enhance 
each Party's implementation of the SPS Agreem ent and facilitate trade between the Parties. 
3.25.  Chapter 9 - Technical Barriers to Trade - applies to all standards, technical regulations, and 
conformity assessment procedures maintained at the central level of government that may affect 
                                                                                                                                               
the importing Party considers that the import is part of  a series of imports designed to evade certification 
requirements; or if it is a good for which the importing Party does not require the importer to present evidence 
of certification. 
8 Records necessary to demonstrate that a good for which a certification was provided was originating 
including records concerning the purchase, cost, value and payment for the exported  good and all materials, 
including indirect materials used in its production; and th e production of the good in the form in which it was 
exported, shall be maintained for a minimum of five year s from the date of issue of the certification (Article 
6.17). 
9 For verification of a textile or apparel good, the procedures are set out in Article 4.3 of the Agreement. WT/REG311/1 
 
- 16 - 
 
  the Parties' mutual trade. The Parties reaffirm their existing rights and obligations under the 
WTO Agreement on Technical Barriers to Trade (T BT); they agree to use international standards, 
to the extent provided in Article 2.4 of the TBT Agreement, as a basis for their technical 
regulations and each Party agrees to base its determination of whether a relevant international 
standard exists on the principles set out in WTO Committee on Technical Barriers to Trade 
Decisions and Recommendations. On the issue of co nformity assessment (Article 9.5), the Parties 
recognize that a range of mechanisms exists to facilitate the acceptance of results of conformity 
assessment procedures in the territory of the other Party and they agree to intensify their 
exchange of information on these and other similar mechanisms. When a Party accredits, approves, licences, or otherwise recognises confor mity assessment bodies in the territory of the 
other Party, it will do so on terms no less favourable than those it accords to those bodies in its 
own territory.  
3.26.  The transparency provisions allow for th e persons of each Party to participate in the 
development of its standards, technical regulation s, and conformity assessment procedures if it 
maintains a process for participation that is open to public, including persons of the other Party 
and to do so on terms no less favourable than th ose accorded to its own persons. Furthermore, in 
order to enhance awareness and transparency, when Parties make a notification under 
Articles 2.9, 3.2, 5.6, or 7.2 of the WTO TBT Agr eement, they will include additional information on 
the objective for the measure and simultaneously inform the other Party of its notification. The 
Parties agree to cooperate bilaterally in order to harmonize standards for motor vehicle environmental performance and safety. The Chapter includes additional provisions dealing with 
joint co-operation and transparency and establishes a Committee on Technical Barriers to Trade 
responsible for implementing all measures foreseen  by the Chapter. An Automotive Working Group 
is established specifically to address issues related to developing, implementing and enforcing 
relevant standards, technical regulations, and conformity assessment procedures with respect to 
regulation of motor vehicles. The February 2011 exchange of letters included additional transparency provisions related to technical regulations or conformity assessment procedures, as 
well as post-implementation reviews of significant regulations affecting motor vehicles. Issues 
arising under this Chapter are subject to the Agreement's dispute settlement procedures. 
3.27.  According to exchanges of letters in June 2007 and February 2011, the Parties agreed upon 
vehicle emission standards and regulations relating to self-certification for motor vehicle safety 
standards on originating vehicles imported into Korea. 
3.4.3  Safeguard mechanisms 3.28.  Chapter 10 - Trade Remedies – specifies the rules and procedures for administering 
safeguard measures. For global safeguards, the Parties retain their rights and obligations under 
Article XIX of GATT 1994 and the WTO Agreement on Safeguards. The Agreement provides for special safeguard measures for trade in agricult ural products and textiles (see Sections 3.5.1.3 
and 3.5.2.2). 
3.29.  For bilateral trade, Articles 10.1 and 10.2 provide for the imposition of safeguard measures 
only during a ten-year transition period. However,  if the tariff phase-out period for a given product 
is longer, the transition period will last as long as the tariff phase-out period (Article 10.6). 
Safeguard measures may be introduced only if, as a result of the reduction or elimination of a 
tariff under the Agreement, an originating good is imported in such increased quantities, either in 
absolute terms or relative to domestic production, and under such conditions that the imports are 
a substantial cause of serious injury or threat thereof to the domestic industry of the importing 
Party producing a like or directly competitive good.  
3.30.  The safeguard measure may consist either of the suspension of the tariff reduction; or of an 
increase of the rate of duty on the product back to a level that does not exceed the lesser of the 
MFN applied rate of duty in effect at the time the measure is applied, and in effect on the day immediately preceding the date of entry into force of the Agreement. Safeguard measures can be applied for a maximum period of two years, wh ich can be extended by one year if deemed 
necessary. A safeguard measure may not be applied more than once to the same good. The 
safeguard can be applied only following an investigation by the Party's competent authorities. In critical circumstances where delay would cause damage that would be difficult to repair, a Party 
may apply a safeguard measure on a provisional basis. The provisional measure may not be WT/REG311/1 
 
- 17 - 
 
  applied until at least 45 days after the date of initiating an investigation (Article 10.3.2), and its 
duration may not exceed 200 days (Article 10.3.3).  
3.31.  Chapter 10 specifies some procedural obligations with regards to investigation, application, 
and compensation. They include obligations to give the other Party a written notification of 
initiating an investigation and a consultation opportunity on safeguard measures in advance of 
applying a safeguard measure (Article 10.2.1) and on compensation no later than 30 days after 
the application (Article 10.4).  
3.32.  In the February 2011 exchange of letters , the Parties agreed on alternative safeguard 
provisions specific to motor vehicles of heading 8703 or 8704. The motor vehicle-specific safeguard provisions include the ability to extend the safeguard by two years, rather than one. The special motor vehicle safeguard is available for 10 years beyond the full elimination of tariffs for 
each auto product. Under this motor vehicle safeguard, the Parties are not subject to retaliation for 
up to two years after this particular safeguard is applied if they fail to agree on compensation. The 
special motor vehicle safeguard can be applied more than once on the same auto product if more 
than one surge causes serious injury to producer s of that product. There is no requirement to 
progressively lower tariffs while the special motor vehicle safeguard is applied. Finally, fewer procedural steps are required to speed up the application of the safeguard.  
3.33.  A Committee on Trade Remedies is established under the Agreement.  
3.4.4  Anti-dumping and countervailing measures 3.34.  Article 10.7 states that the Parties retain their WTO rights and obligations with regards to 
anti-dumping and countervailing measures, an d that the Agreement's dispute settlement 
provisions do not apply to such measures. The Agreement provides for written notification and 
consultations before initiating an investigation of anti-dumping and countervailing duties. The Party shall afford due consideration to the other Party or the exporters of the Party regarding 
proposed undertakings on price or, as appropriat e, on quantity after an affirmative preliminary 
determination in an antidumping or countervailing duty investigation. 
3.4.5  Subsidies and state aid 
3.35.  There are no provisions on subsidies and state aid in the Agreement. 
3.5  Sector Specific Liberalization 3.5.1  Agriculture 3.36.  Chapter 3 of the Agreement applies to agricultural goods and contains provisions for the 
administration and implementation of tariff-rate quotas and the application of agricultural 
safeguard measures.  
3.5.1.1  Tariff-rate quotas 
3.37.  The administration and implementation of tariff rate quotas is specified in Article 3.2, and 
each Party’s Appendix 2-B-1 to its Schedule to Annex 2-B. The Agreement specifies that the Parties will use a first-come/first-served system for administering all TRQs unless otherwise 
provided in the Appendix 2-B-1 of its Schedule to Annex 2-B. In Article 3.2, each Party commits , 
inter alia  to ensure that (a) its procedures for administering its TRQs are transparent, timely, non-
discriminatory, responsive to market conditions, and minimally burdensome to trade; (b) it does not allocate any portion of an in-quota quantity to  producer groups ; (c) each Party is to identify 
the entities responsible for administering its TRQs; and (d) it allocates in-quota quantities under its 
TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request. In addition, each Party is required to make every effort to 
administer its TRQs in a manner that allows importers to fully utilize them, and neither Party may 
condition application for, or use of, an in-quota quantity allocation under a TRQ on the re-export of an agricultural good. WT/REG311/1 
 
- 18 - 
 
  3.5.1.1.1  Tariff-rate quotas ma intained by the United States 
3.38.  The Agreement provides for additional du ty-free access for selected Korean agricultural 
products to the U.S. market through tariff-rate  quotas. Goods imported from Korea under a TRQ 
are not counted toward the in-quota amount of an y TRQ provided elsewhere by the United States. 
The United States applies TRQs to certain milk and milk products (Annex Table A2.1), eliminating 
the duty on Korean in-quota imports as of entry into force of the Agreement; the in-quota volume 
expands progressively over nine years after which all such products are granted unlimited duty-
free access.  
3.5.1.1.2  Tariff-rate quotas maintained by Korea 3.39.  Korea applies TRQs to imports from the United States on the following products: certain 
fish; milk, cream and cream powder; food whey; bu tter and other fats and oils derived from milk; 
cheese; honey; potatoes; oranges; barley; malt  and malting barley; maize starch; soybeans; 
ginseng; fodder, prepared dry milk, animal feeds; and dextrins (Annex Table A2.2). Duties are eliminated on in-quota imports from the United States as of entry into force of the Agreement; 
in-quota volumes expand progressively over time (five to 17 years, depending on the product). 
Thereafter all but five products are duty-free: milk, cream and cream powder, potatoes, honey, oranges and soybeans remain subject to their respec tive base rate (though after year five the in-
quota quantity continues to increase at 3% per year, compounded annually). 
3.40.  The Agreement provides for Korea to use an auction system for certain products subject to 
TRQs with terms to be mutually established by the Parties. Such products are milk, cream and cream powder; butter and other fats and oils derived from milk; honey; potatoes; oranges; and 
ginseng. Auctions are subject to conditions are laid out in Article 3(a) of Appendix 2-B-1.   
3.41.  Korea is permitted to use a licensing system to implement and administer TRQs for certain 
products in accordance with conditions set out in Article 4 (a) of Appendix 2-B-1. The Parties are 
to agree on the policies and procedures for the licensing system, including eligibility to receive TRQ 
quantities and any changes made.
10 Goods from the United States subject to licensing by Korea 
under TRQs are food whey, cheese, barley, malt  and malting barley, maize starch, soybeans, 
fodder, prepared dry milk, animal feed, and dextrins.  
3.5.1.2  Agricultural Safeguards 3.42.  A Party may apply an agricultural safeguard measure to certain originating agricultural 
goods if the aggregate volume of imports of that good in any year exceeds a trigger level as set 
out in its Schedule to Annex 3-A. Korea may apply such measures to 30 agricultural goods 
imported from the United States (Annex Table A2 .3). The time period during which the safeguard 
may be applied varies from se ven years (popcorn and maize) to 23 years (apples). For most 
goods, the trigger level progressively increases over time while the safeguard duty diminishes. For 
some products (beans, sweet potatoes, popcorn, maize, buckwheat, cereals, groats, worked grains and alcohol) an intermediate trigger applies during the first four years: all quantities entered at or 
below the intermediate safeguard trigger level enter duty-free and all quantities entered above the 
intermediate safeguard trigger level and at or below the main safeguard trigger level enter at the intermediate safeguard duty. Any quantity above this level enters at the main safeguard duty. 
3.43.  The United States has not set down any products subject to agricultural safeguards under 
the Agreement. 
3.5.1.3  State trading in agricultural products 3.44.  Under the Agreement, the Parties may require an originating good of the other Party to be 
imported, purchased, or distributed in its territory by a state trading enterprise only if, and on 
such terms and conditions as, the Parties may agree.  
                                               
10 According to the Parties, these have been agreed, but there is no written agreement. WT/REG311/1 
 
- 19 - 
 
  3.5.2  Textiles and Apparel 
3.45.  Chapter 4 of the Agreement contains provisions specific to bilateral trade in textiles and 
clothing products. The rules of origin contained in this Chapter cover a limited number of tariff lines in the following chapters of the Harmoniz ed System (HS): 42 (luggage), 50-63 (textiles and 
clothing), 70 (glass fibre rovings and yarns), and 94 (comforters). Specific rules of origin, for the 
most part at the HS 6 digit level have been defined for these products, as well as a special safeguard mechanism, and specific verifications and enforcement procedures. Article 4.3 contains 
detailed provisions applying to customs co-operation for textile or apparel goods which include 
enforcing or assisting in the enforcement of me asures, verifying and ensuring the accuracy of 
claims of origin, enforcing or assisting the enforcement of measures implementing international agreements affecting trade in textile or apparel goods, and preventing circumvention of 
international agreements affecting trade in textil e or apparel goods. The Agreement establishes a 
Committee on Textile and Apparel Trade Matters. 
3.46.  In addition to the general rules of origin in Chapter 6 of the Agreement, Chapter 4 contains 
specific rules of origin for textiles and clothing. The rules, set out in Annex 4-A, are generally 
based on the "yarn forward" principle of origin: for a final product to be considered as originating, and thus benefit from tariff elimination, processing operations of the yarn, the fabric, and the final 
textile or clothing product must take place in the Parties. The Parties have agreed to transitional 
procedures applicable for five ye ars for goods containing fabric, fibres, or yarns not available in 
commercial quantities in a timely manner in the territory of either Party. Annex 4-B contains the conditions and quantities that apply. No products were listed by the Parties as being in short 
supply in the Agreement. In a letter dated 30 June 2007, Korea expressed an interest in adding 
certain cotton sheeting fabrics, man-made fibre knit fabrics, polyester and other synthetic filament fabrics, and wool fabrics.
11   
3.5.2.1  Textile Safeguards 
3.47.  Safeguard measures specific to textiles and apparel (Article 4.1) are applicable ten years 
beyond the date at which a Party must eliminate its customs duties on that good under the 
Agreement. The procedures for their application are established by each Party. The Parties may 
not apply, with respect to the same good at the same time, a textiles safeguard measure and a bilateral safeguard measure or a measure under Article XIX and the Safeguards Agreement. A textiles safeguard measure may not exceed two year s, extendable for up to two years, and may 
not be applied twice to the same product. On term ination, the rate shall be the one set out in the 
Party's Schedule to Annex 2-B (Tariff elimination), as if the measure had never been applied. The Party applying a textiles safeguard measure shall provide to the Party against whose product the 
measure is taken, mutually agreed trade liberalizing compensation, in the form of concessions 
having substantially equivalent trade effects or eq uivalent to the value of the additional duties 
expected to result from the textiles safeguard measure. Such concessions shall be limited to 
textiles or apparel products, unless the Parties otherwise agree. 
3.5.3  Pharmaceutical Products and Medical Devices 3.48.  
Chapter 5  of the Agreement contains provisions specific to pharmaceutical products and 
medical devices. The Parties agree to ensure that their laws, regulations and procedures of general 
application regarding pricing, reimbursement, or re gulation of pharmaceutical products or medical 
devices are promptly published or otherwise made available. The Parties agree to foster regulatory cooperation through facilitating consideration of requests to recognize the results of conformity 
assessment procedures including a request for the negotiation of an agreement with respect to 
Good Manufacturing Practices, Good Laboratory Practices, and marketing approval of generic drugs based on Article 5.6. To the extent that a Party’s central level of government operates or 
maintains procedures for listing pharmaceutical products, medical devices, or indications of 
reimbursement, or setting the amount of reimbu rsement under health programs operated by its 
central level of government, the Parties agree to appropriately recognize the value of patented pharmaceuticals and medical devices and to permit manufacturers to apply for increased amounts 
of reimbursement, if the Party’s determinatio n of reimbursement amount for pharmaceutical 
products or medical devices is not based on compet itive market-derived prices. Pursuant to Article 
                                               
11 According to the Parties, certain Cuprammonium rayo n filament yarns were adde d to the list in Annex 
4-B-1 of the Agreement on 18 April 2014 and certain Cash mere yarns were added to the list on 24 April 2014. WT/REG311/1 
 
- 20 - 
 
  5.3 and a confirmation letter dated 30 June 2007, the Parties agree to establish and maintain a 
body to review, at the request of an applicant that is directly affected, recommendations or determinations regarding the pricing and reimburs ement of pharmaceutical products or medical 
devices. A Medicines and Medical Devices Committee is established under the Agreement. 
3.5.4  Other regulations 
3.5.4.1  Competition  3.49.  Chapter 16 contains specific provisions on competition law and anticompetitive business 
conduct, designated monopolies and state enterprise s. The Parties agree to maintain specified due 
process and promote transparency protections in their competition investigations and enforcement, and to provide their competition authorities with the authority to resolve administrative or civil enforcement actions by mutual agreement with the subject of the 
enforcement action (Article 16.1). The Parties commit to maintain or adopt competition laws to 
prevent anti-competitive business conduct, to take  appropriate actions accordingly, and to enforce 
their national competition laws. They agree to c ooperate in relation to their enforcement policies 
and competition laws, including through mutual assistance, notification, consultation, and 
exchange of information. The Parties agree to make available public information concerning competition law enforcement activities, state enterprises and designated monopolies and 
exemptions and immunities to their competition laws, upon request (Article 16.5).  
3.50.  The Parties can designate or maintain a monopoly (i.e. privately owned or government) but 
must ensure that it: (a) does not act in a manner that is inconsistent with the Agreement wherever such a monopoly exercises any governmental authority
12 in connection with the 
monopoly of a good or service; (b) acts in accordance with commercial considerations; (c) 
provides non-discriminatory treatment to covered investments, goods or service suppliers of the other Party; and (d) does not engage in anticompetitive practices, that affect covered investments, 
in non-monopolized markets in its territory (Article 16.2). 
3.51.  The Parties can maintain or establish state enterprises, but must ensure that such 
enterprises operate in a manner consistent with the obligations under the Agreement when they 
exercise any delegated governmental authorit y; and grant non-discriminatory treatment to 
covered investments when selling their goods or services (Article 16.3).  
3.52.  The Parties agree to cooperate in the enforcement of their consumer protection laws in 
areas of mutual concern (Article 16.6). They agree to enter into consultations to address specific 
matters arising under the Competition Chapter (Article 16.7), upon request. The Parties cannot 
invoke the Agreement's dispute settlement mech anism for any matter arising under Chapter 16, 
except for issues related to designated monopolies and state enterprises (Article 16.8). 
4  PROVISIONS ON TRADE IN SERVICES 
4.1  Scope and definitions 4.1.  In the Agreement, cross-border trade in se rvices is defined to include GATS modes of supply 
1, 2, and 4, and is mainly governed by Chapter 12 on Cross-Border Trade in Services. Among the 
exclusions from Chapter 12 are subsidies, government procurement, air transport services (except specialty air services and aircraft repair and maintenance)
13, financial services, and immigration 
measures, including admission or conditions of admission for temporary entry.  
4.2.  Investment provisions, including all measures falling under mode 3 of the GATS, are covered 
by Chapter 11 on investment, as well as by Articles 12.4, 12.7, and 12.8 of Chapter 12. Cross-border trade and investment in financial services; telecommunications; and electronic 
commerce are addressed in separate Chapters of the Agreement. Liberalization modalities for 
Chapters 11 and 12 follow a "negative list" approach: therefore, all sectors or sub-sectors covered 
                                               
12 Such as the power to grant import or export licenses, approve commercial transactions, impose 
import quotas or fees. 
13 The GATS Annex on Air Transport Services appl ies to measures affecting aircraft repair and 
maintenance services, the selling and marketing of air transport services , and computer reservation system 
services. The latter two are excluded from the Agreement. WT/REG311/1 
 
- 21 - 
 
  by these Chapters are assumed to be open to competition from nationals of the other Party, both 
in terms of market access and national treatmen t, unless otherwise provided in Annexes I and II, 
which contain the Parties' non-conforming measures (described below). Annex III lists the Parties' non-conforming measures with respect to financia l services, which is the subject of Chapter 13.  
4.3.  A confirmation letter signed by the Partie s in June 2007 states that cross-border trade and 
investment in gambling and betting services is not subject to the provisions on cross-border trade in services and investment.  
4.4.  Chapter 11 covers the Parties' measures in relation to investors of the other Party; and to 
"covered investments", defined as investments by an  investor of a Party in the territory of another 
Party, in existence as of the date of entry into force of the Agreement or established, acquired, or 
expanded thereafter. Investment, which is defined in Article 11.28, means every asset that an 
investor owns or controls directly or indirectly, e.g., enterprise, shares, tangible or intangible 
property. The Chapter also includes an investor-state dispute settlement mechanism. In accordance with Article 11.12, the Parties can list in Annexes I and II reservations for non-
conforming measures with respect to the obligations of MFN treatment, national treatment, 
performance requirements and senior management and boards of directors. As in the Services 
Chapter, existing non-conforming measures are listed in Annex I, while the Parties' reservations 
for sectors or activities in which current or future non-conforming measures may be maintained or 
adopted are listed in Annex II. 
4.5.  The Services Chapter does not apply to measures covered by Chapter 13 on Financial 
Services. However, obligations on expropriation and compensation (Article 11.6), transfers (Article 
11.7), investment and environment (Article 11.10), denial of benefits (Article 11.11), special 
formalities and information requirements (Article 11.13) apply to investments and investors in relation to financial services (as per Article 13.1.2). The investor-state dispute settlement 
mechanism is available in relation to financial services, but solely for claims in relation to Article 
11.6 (expropriation and compensation), 11.7 (transfers), 11.11 (denial of benefits) or 11.13 (special formalities and information requirements).  
4.6.  Article 11.1.3 specifies that measures adopted or maintained by a Party means measures 
adopted or maintained by central, regional or local governments and authorities, and to non-government bodies in the exercise of powers dele gated by central, regional, or local governments 
or authorities.  
4.2  Denial of benefits 
4.7.  Under Articles 11.11 and Article 12.11, a Party may deny the benefits of the relevant 
chapters to a service supplier, investor, or investments of that investor of the other Party if that 
person is an enterprise owned or controlled by persons of a non-Party and the denying Party 
(i) does not maintain "normal economic relations" with the third party or (ii) adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions 
with the enterprise or that would be violated or circumvented if the benefits of that Chapter were 
accorded to the enterprise. In addition, the benefits  of both Chapters may be denied by a Party to 
a service supplier or investor of the other Party if the supplier or investor is an enterprise owned or controlled by persons of a non-Party or the denying Party and the enterprise has no substantial 
business activities in the territory of the other Party.  
4.3  General provisions on trade in services and investment 4.8.  General obligations on trade in services are found in Chapter 12. It applies to measures 
affecting cross-border trade in services taken by central, regional or local governments and 
authorities of the Parties, and by non-government al bodies in the exercise of delegated powers 
(Article 12.1.2). Although the definition of cross-border trade in services contained in 
Article 12.13 does not include mode 3, Article 12.1.3 stipulates that the Chapter’s market access, 
domestic regulation, and transparency provisions also apply to measures by a Party affecting the 
supply of a service in its territory by a covered investment. Measures adopted or maintained by WT/REG311/1 
 
- 22 - 
 
  a Party affecting the supply of express delivery services, including by a covered investment, are 
covered by Annex 12-B.14  
4.3.1  MFN and national treatment 4.9.  Article 12.2 provides for each Party to accord to (cross-border) service suppliers of the other 
Party treatment no less favourable than that it accords, in like circumstances, to its own service 
suppliers. Article 12.3 requires each Party to accord to service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to service suppliers of 
a non-Party.
15  
4.10.  Article 12.4 precludes the Parties from adopting or maintaining, either on the basis of a 
regional subdivision or on the basis of its entire territory, measures that (a) impose limitations on: (i) the number of service suppliers, whether in the form of numerical quotas, monopolies, 
exclusive service suppliers, or the requirement of an economic needs test; (ii) the total value of 
service transactions or assets in the form of num erical quotas or the requirement of an economic 
needs test; (iii) the total number of service operat ions or the total quantity of services output 
expressed in terms of designated numerical units in  the form of quotas or the requirement of an 
economic needs test; or (iv) the total number of  natural persons that may be employed in a 
particular service sector or that a service supplier may employ and who are necessary for, and 
directly related to, the supply of a specific service in the form of numerical quotas or the 
requirement of an economic needs test; or (b) restri ct or require specific types of legal entity or 
joint venture through which a service supplier may supply a service. Article 12.4 does not mention limitations on the participation of foreign capital as contained in GATS Article XVI; however, such 
limitations are captured by Article 11.3 of the Investment Chapter. 
4.11.  In addition to the provisions of Chapter 21 on Transparency, Article 12.8 specifies rules on 
transparency that go beyond the requirements of  Article III of the GATS, by requiring the Parties 
to establish mechanisms to respond to enquiries from interested persons regarding regulations 
relating to the subject matter of Chapter 12 an d in the event that advance notice of and 
opportunity for comment on regulations are not provided, to the extent possible, to address in 
writing the reasons for not doing so. 
4.12.  Chapter 11 on investment requires each Party to accord MFN (Article 11.4) and national 
treatment (Article 11.3), in like circumstances, to investors of the other Party and covered investments, with respect to the establishment,  acquisition, expansion, management, conduct, 
operation, and sale or other disposition of investments in its territory. The obligations of national 
and MFN treatment do not apply to government procurement; nor to subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance (Article 11.12.5). 
The Chapter contains no market access obligation along the lines of GATS Article XVI, but, as 
noted earlier, Article 12.1.3 stipulates that mark et access, domestic regulation, and transparency 
provisions specified for cross-border trade in services shall also apply to measures by a Party 
affecting the supply of a service in its territory by a covered investment.  
4.13.  Article 11.5 binds the Parties to accord covered investments treatment in accordance with 
customary international law, including fair and equitable treatment and full protection and security. Annex 11-A provides the Parties' understanding of "customary international law".  
4.3.2  Local presence 
4.14.  Under Article 12.5, neither Party may require that a service supplier of the other Party 
establish or maintain a representative office or any form of enterprise, or be resident, in its 
territory as a condition for the cross-border supply of a service.  
                                               
14 Annex 12-B is not subject to investor-state dispute settlement. 
15 Article 12.13 (Definitions) clarifies (in footnote 10) that, for purposes of Articles 12.2 (national 
treatment) and 12.3 (MFN treatment), “service  suppliers” has the same meaning as “services and service suppliers” as used in Articles II and XVII of the GATS. WT/REG311/1 
 
- 23 - 
 
  4.3.3  Senior Management and Boards of Directors 
4.15.  A Party cannot apply nationality conditions to senior management positions of a company 
that is a covered investment but can require that a majority of its board of directors, or any committee thereof, be of a particular nationality, or  resident in the territory of the Party, provided 
that the requirement does not materially impair the ability of the investor to exercise control over 
its investment (Article 11.9). 
4.16.  In financial services, the Parties cannot apply nationality conditions to the senior managerial 
or other essential personnel of financial institutions of the other Party, nor require that more than 
a minority of the board of directors of a financial institution of the other Party be composed of its nationals or residents, or a combination thereof (Article 13.8).  
4.3.4  Movement of natural persons 
4.17.  There is no separate chapter on the movement of natural persons in the Agreement. 
Paragraph 12.1.7 of the Agreement states that nothing in the Agreement may be construed to impose any obligation on a Party regarding its immigration measures, including admission or 
conditions of admission for temporary entry. The Pa rties agree to consult on this issue within two 
years of the Agreement's entry into force, and at two-year intervals afterwards, unless otherwise agreed.  
4.3.5  Other Measures on Investment 
4.18.  Article 11.6 contains provisions regarding expropriation and compensation, whilst transfers 
are the subject of Article 11.7. Unlike other provisions of the Investment Chapter, the provisions relating to performance requirements (Article 11.8) and to environmental standards (Article 11.10) 
apply to all investments irrespective of the origin of investors.  
4.19.  Article 11.8 lists a number of prohibited performance requirements, but the Parties exclude 
from certain of these disciplines qualification requirements for services related to export promotion 
and foreign aid programmes, as well as government procurement. Paragraph 3 (a) of Article 11.8 
clarifies that the performance requirements obligation does not prevent Parties from conditioning the receipt of advantages on compliance with requirements to locate production, supply a service, 
train or employ workers, construct or expand particular facilities, or carry out research and 
development, in their territory. Also, paragraph 3 (c) of Article 11.8 clarifies that the performance requirements obligation does not prevent a Party from adopting or maintaining environmental and other measures necessary to protect human, animal, or plant life or health, or to assure the 
conservation of living or non-living exhaustible natural resources, provided that such measures are 
not applied in an arbitrary or unjustifiable manner, and do not constitute a disguised restriction on investment or international trade. A confirmation letter signed by the Parties in June 2007 clarifies 
that certain measures related to resource recycling and to policies to encourage low-emission 
motor vehicle distribution are not inconsistent with Article 11.8.  
4.20.  A Party may adopt, maintain, or enforce any measure otherwise consistent with the 
Investment Chapter that it considers appropriate to ensure that investment activity in its territory 
is undertaken in a manner sensitive to environmental concerns (Article 11.10). 
4.21.  Section B of Chapter 11 contains provisio ns on investor-state dispute settlement, which 
provide investors of a Party with the ability to submit to arbitration a claim that the other Party 
has breached investment obligations contained in  Chapter 11 of the Agreement, an "investment 
authorization" or an "investment agreement" if the investor or an enterprise the investor owns or controls, has incurred loss or damage as a result of the breach. The obligations in Chapter 11 do 
not apply to any act or fact that took place or any situation that ceased to exist , prior to the entry 
into force of the Agreement.  
4.22.  The mechanism is open to an investor of a Party ("the claimant") that is a party to an 
investment dispute with the other Party. A disputing party may, on its own behalf or on behalf of 
an enterprise that it owns or controls directly or indirectly, submit a claim that the respondent has breached an obligation under the Section A of the Investment Chapter, an "investment authorization", or an "investment agreement" . Arbitration can take place under the ICSID WT/REG311/1 
 
- 24 - 
 
  Convention and the ICSID Rules of Procedures  for Arbitration Proceedings; under the ICSID 
Additional Facility Rules; under the UNCITRAL Arbitration Rules16; or if the claimant and 
respondent agree, under any other arbitration institution or any other arbitration rules.17 Where a 
tribunal makes a final award against a respondent, the tribunal may award, separately or in 
combination, only: monetary damages and applicable interest; and restitution of property, in 
which case the award shall provide that the respondent may pay monetary damages and applicable interest, in lieu of restitution. Annex 11-D provides that within three years of the 
Agreement's entry into force, the Parties shall consider whether to establish a bilateral appellate 
body or similar mechanism to review awards  rendered under the Investment Chapter. 
4.4  Liberalization Commitments 4.23.  Under the Agreement, non-conforming measures with respect to cross-border trade in 
services (Chapter 12) can be specified with respect to the obligations of MFN and national 
treatment, market access, and local presence, and, in the case of investment (Chapter 11), with 
respect to the obligations of MFN and national treatment, performance requirements, and senior 
management and boards of directors. Non-conforming measures under these two Chapters are set 
out in Annexes I and II.
18 Annex I contains existing non-conforming measures, while Annex II 
contains the schedule of sectors, subsectors, or activities for which the Parties may maintain 
existing non-conforming measures, or adopt new or more restrictive non-conforming measures. 
Cross-border financial service suppliers are permitted to supply services positively listed in Annex 13-A of the Agreement. Liberalization in investments in the financial services sector is subject to a negative list approach, whereby all sectors are assumed covered by Chapter 13 
obligations, except as otherwise provided in Annex III which contains the Parties' non-conforming 
measures with respect to both existing and future measures.  
4.24.  If a Party considers that an Annex I non-co nforming measure applied by a regional level of 
government of the other Party creates a material im pediment to a service supplier of the Party, an 
investor of the Party, or a covered investment , it may request consultations with a view to 
exchanging information on the operation of the measure and to considering whether further steps 
are necessary and appropriate (Annex 12-C). 
4.4.1  The United States 4.25.  Under the Agreement, the United States listed 11 reservations (at the central level) for 
existing measures, of which two are horizontal (Annex I). It also included one horizontal 
reservation at the regional level, under which it schedules an exception for all existing 
non-conforming measures of all states, the District of Colombia and Puerto Rico. Appendix I-A of the Agreement contains an illustrative list of U.S. regional non-conforming measures (which is 
provided for transparency purposes and is neither exhaustive nor binding).  
4.26.  The United States also listed six reservations for sectors or activities in which current or 
future non-conforming measures may be maintained or adopted: two horizontal, three sector-
specific (for communications, social services an d maritime transportation services) and one non-
sector specific reservation for minority affairs (Annex II).  
4.27.  In financial services, the United States listed 17 reservations with respect to existing 
measures and one with respect to sectors or activities in which current or future non-conforming 
measures may be maintained or adopted (Annex III). 
4.28.  The following sections refer to the United States' horizontal and sector-specific 
commitments at the central level. 
                                               
16 UNCITRAL is the United Nations Commission on International Trade Law. 
17 ICSID: Convention on the Settlement of  Investment Disputes between States and Nationals of Other 
States , done at Washington, March 18, 1965. 
18 The measures listed in Annex I are subject to  a "ratchet" clause (Article 11.12.1(c) and 
Article 12.6.1(c)) meaning that if a Party unilaterally mo difies any existing non-conforming measure with the 
effect of making it more liberal, such liberalization is bound and becomes its new level of commitment towards 
the other Party. WT/REG311/1 
 
- 25 - 
 
  4.4.1.1  Horizontal Commitments 
4.29.  The United States has removed its GATS mode 3 horizontal limitation on the initial sale and 
acquisition of federally-owned lands to US citizens under the Agreement.19 The United States has a 
GATS horizontal limitation (modes 1-3) on the imposition of differential treatment of direct and 
excise taxes at the federal level. Direct taxes remain largely excluded from the scope of the 
Agreement by virtue of Article 23.3. The United States retains its GATS horizontal mode 3 limitation on insurance and loan guarantees provided by the Overseas Private Investment 
Corporation (OPIC) under the Agreement, but recognizes that OPIC may make arrangements with 
Korean or multilateral agencies for sharing liabilities under investment insurance and that Korea would therefore be eligible for MFN treatment in this regard. The United States retains an MFN exemption (as in GATS) on the use of small bu siness registration forms under the Agreement 
(except for Canadian issuers).  
4.30.  With regard to sectors or activities in which current or future non-conforming measures may 
be maintained or adopted, the United States re serves the right, for all sectors, to adopt or 
maintain any measure relating to market access in cross-border services that is not inconsistent 
with its obligations under GATS Article XVI as set out in its WTO specific commitments, as modified in Appendix II-A.
20 Thus U.S. commitments on market acce ss for modes 1, 2, 4 (and mode 3 as 
per paragraph 3 of Article 12.1) are potentially limited to those made with respect to 
subparagraphs 2(a)-(e) of Article XVI of the GATS (subject to the improvements listed in Appendix II-A). The United States also reserves the right to adopt or maintain any measure (with respect to cross-border services and investment) that grants differential treatment to countries 
under an existing international agreement in force or  signed prior to the date of entry into force of 
the Agreement, as well as under any future agre ement involving aviation, fisheries or maritime 
matters, including salvage.  
4.4.1.2  Sector-specific commitments 
4.31.  Compared to its GATS schedule, the United States' sector-specific commitments are broader 
and deeper, for instance, in business services, communication services, environmental services, 
financial services, health related and social services, tourism and travel related services, and 
transport services.  
4.32.  Table 4.1 compares the degree of liberalizati on by sector in the Agreement with that in the 
U.S. GATS schedule.
21 In particular, it indicates whether sectoral commitments in the Agreement 
(except as indicated in the Agreement's horizontal reservations at the central level) are improved 
or the same compared to those in its GATS Schedule.  
4.33.  Reservations at the regional level that are included in the U.S. GATS Schedule are indicated 
in the Table. In the case of the Agreement, this is not possible as regional non-conforming 
measures are not listed (as noted above, the United States has scheduled an exception for all existing non-conforming measures of all states, the District of Colombia and Puerto Rico).  
                                               
19 This limitation does not apply to foreign-owned co mpanies formed under the laws of any state of the 
United States. 
20 Improvements in market access listed in Appendix II-A concern the following sectors/subsectors:  
foreign legal consulting services;  accounting, auditi ng and bookkeeping services;  engineering services;  
research and development services;  technical testing and analysis services;  other bu siness services;  express 
delivery services;  other delivery services;  higher ed ucation services;  motion pi cture and video tape home 
video entertainment production and dist ribution;  environmental services;  ph ysical well-being services;  road 
freight transport;  and cargo-handling services.   
21 Bearing in mind the inherent difficulties in comparing commitments scheduled using a positive versus 
negative list approach.   WT/REG311/1 
 
- 26 - 
 
  Table 4.1 United States: Sector-specific lib eralization under the Agreement at central 
level, excluding mode 4  
Sectors (CPC Classification)  GATS  FTA 
Sectoral 
Commitments 
(except as 
indicated in the 
GATS horizontal 
commitments) Compared to the 
GATS, sectoral 
commitments  
(except as indicated in 
the FTA horizontal 
reservations at federal 
level) in the FTA are: Sector-specific 
reservations 
(or provisions) 
specified in 
1. Business services  partial  improved  Annex I  
A. Professional Services  partial* improved   
B. Compute r and Related Services               full  same    
C. Research and Development  Services              no commitments  full   
D. Real Estate Services                     partial* same   
E. Rental/Leasing Services without Operators          partial  improved   
F. Othe r Business Services  partial* improved    
2. Communication services  partial  improved  Annex I, II  
A. Postal services                      no commitments  improved   
B. Courie r services                      full same   
C. Telecommunication services  partial  samea   
D. Audiovisual services partial  same   
E. Other  no commitments  full  
3. Construction & related engineering 
services  full same  - 
A. General construction work fo r buildings           full  same   
B. General construction work fo r civil engineering      full same   
C. Installation and assembly wor k              full  same   
D. Building completion and finishing work           full same   
E. Othe r                          full  same   
4. Distribution services  partial  improved   
A. Commission agents' services                  full  same   
B. Wholesale trade services  partial  improved   
C. Retailing services                                        partial  full  
D. Franchising                                                 full same   
E. Othe r no commitments  full  
5. Educational services  partial  full - 
A. Primary education services                  no commitments  full  
B. Secondary education services                no commitments  full  
C. Higher education services                  no commitments  full  
D. Adult education                       partial* full  
E. Other education services                  partial* full  
6. Environmental services  partial  full - 
A. Sewage services                      partial  full  
B. Refuse disposal services                  partial  full  
C. Sanitation and similar services              partial  full  
D. Othe r partial  full  
7. Financial services partial  improved  Annex III  
A. All insurance and insurance-related services        partial* improved   
B. Banking and othe r financial  services partial* improvedb  
C. Othe r no commitments  full  
8. Health related and so cial services partial  full - 
A. Hospital services partial* full  
B. Other Human Health Services                no commitments  full  
C. Social Services                       no commitments  full  
D. Othe r no commitments  full  
9. Tourism and travel related services  partial  full - 
A. Hotels and restaurants (including catering)          full same   
B. Travel agencies and tou r operators services        partial  full  
C. Tourist guides services                  partial  full   
D. Othe r full same   
10. Recreational, cultural and sporting 
services partial  improved  Side letter  
A. Entertainment services  full same  
B. News agency services                    full  same  
C. Libraries, archives, museums and other cultural 
services   full same  
D. Sporting and other recreational services          partial  partialc  
E. Other  no commitments  full  
11. Transport services  partial  improved  Annex I, II  
A. Maritime Transport Services  no commitments  improved   
B. Internal Waterways Transport  no commitments  same  
C. Air Transport Services  partial  improvedd  
D. Space Transport                       no commitments  full  
E. Rail Transport Services  partial* full   
F. Road Transport Services partial* full   
G. Pipeline Transport  no commitments  improved   
H. Services auxiliary to all modes of transport  partial  improved   
I. Othe r Transport Services  no commitments  full  WT/REG311/1 
 
- 27 - 
 
   
*  Regional commitments under the GATS are not taken in consideration for this comparison. 
a  It is noted that the reservatio n pertaining to satellite transmissi on of direct-to-home and direct 
broadcasting satellite te levision services and digital audio services are generally covered as 
audiovisual services under the GATS. However, as the Parties have indicated these as communications services, they are thus covered as such for the purposes of this table. 
b Due to the differences in approach, i.e. negative versus positive list, an exact comparison is not 
possible. 
c It is noted that gambling services are exclud ed pursuant to a side letter, thus the GATS 
commitments are slightly more liberal.  
d The improvement in air transport services is in aircraft repair and maintenance services. Other 
aspects of air transport services cannot be compar ed due to differences in  scope between the GATS 
and the Agreement. 
4.34.  For business services, which is subject to few restrictions in its GATS schedule, the 
United States expands sectoral coverage in medi cal and dental services, veterinary services and 
services provided by midwives, nurses, physiotherapists and para-medical personnel,22 research 
and development services and other business services. Sectoral coverage is expanded in research 
and development services (uncommitted in GATS) and in other business services through the 
inclusion of technical testing and analysis services; certain services incidental to agriculture, hunting and forestry such as provision of agricultural machinery, harvesting and related services, and services of farm labour contractors; services incidental to manufacturing; and other business 
services. Under the Agreement, practice before the U.S. Patent and Trademark Office has been 
liberalized compared to the United States' GATS commitment. For export trading and administration, the U.S. scheduled a limitation on cross-border trade in services with respect to 
exports and re-exports of certain goods, e.g. commodities, software and technology. 
4.35.  Under communication services, postal se rvices, uncommitted in GATS, are not subject to 
specific reservations under the Agreement.
23 For express delivery services (as listed in 
Annex 12-B), the Parties confirm their desire to maintain at least the level of market openness for 
such services that is in existence on the date the Agreement is signed. The United States retains 
its ownership limitations on radio licences, while limitations on ownership of television licences listed in its GATS schedule have been removed under the Agreement. The United States maintains 
an Annex II reservation with respect to communications, reserving the right to adopt or maintain 
differential treatment due to the application of reciprocity measures or through international agreements with respect to the one-way satellite transmission of direct-to-home and direct 
broadcasting satellite television se rvices and digital audio services. 
4.36.  In distribution services, the limitations on  wholesale and retail trade of alcoholic beverages, 
firearms and military equipment in the United States' GATS schedule have been removed under 
the Agreement, thus liberalizing trade in this sector.   
4.37.  Education and environmental services are not subject to any specific reservation under the 
Agreement.
24 
4.38.  In banking and other financial services, the United States' commitments under the 
Agreement apply to the provision and transfer of financial information, financial data processing 
and related software.25 It also listed advisory and other auxiliary services, excluding 
intermediation, relating to banking and other financial services. Specific commitments in portfolio 
management are listed in Annex 13-B. The United States allows a financial institution organized 
outside its territory to provide the following services to a collective investment scheme26 located in 
its territory: investment advice; and portfolio management services, excluding trustee services 
and custodial services and execution services that are not related to managing a collective 
                                               
22 The United States reserves the right to adopt or  maintain measures for a public purpose that may 
affect these sectors. 
23 Pursuant to Article 12.1, postal services that  are not supplied on a commercial basis, nor in 
competition with other service suppliers are excluded fro m the scope of Chapter 12. Services not supplied in 
the exercise of governmental authority are covered by the Chapter. 
24 The Annex II reservation for social services may a pply to certain services, to the extent they are 
services adopted or maintain ed for a public purpose. 
25 This sub-sector is covered in the GATS in the Understanding on Commitments in Financial Services. 
26 A collective investment scheme is defined as an investment company registered with the Securities 
and Exchange Commission under the Investment Company Act of 1940 . WT/REG311/1 
 
- 28 - 
 
  investment scheme. The liberalization of investments in banking and other financial services is 
subject to the traditional negative list approach whereby all sectors are assumed to be free of restrictions except as otherwise provided in Annex III. Reservations taken by the United States for the most part replicate limitations in its GATS Schedule with some small improvements.
27 The 
United States reserves the right in the case of  certain government-sponsored enterprises (GSEs)28 
to grant taxation advantages, exemption from regi stration and periodic reporting requirements in 
the issuance of securities, and to purchase secu rities issued by GSEs. In addition, the United 
States reserves the right to maintain all existi ng non-conforming measures of all states, the 
District of Columbia, and Puerto Rico. 
4.39.  In insurance and related services, U.S. cross-border commitments apply to insurance of 
risks relating to maritime shipping, commercial aviation, space launching, freight (including 
satellites) and goods in international transit. It also listed reinsurance and retrocession services, 
services auxiliary to insurance and insurance intermediation. Limitations listed in the insurance sector in the U.S. GATS schedule have been retained as non-conforming measures in the 
Agreement, with the exception of federal excise taxes imposed on all life, non-life, re-insurance 
and retrocession premiums covering U.S. risks paid to companies not incorporated under U.S. laws, except for premiums that are earned by  such companies through an office or dependent 
agent in the United States. This exception is not listed due to the operation of the tax exception in 
the General Exceptions Chapter. Finally, the United  States reserves the right to adopt or maintain 
any measure that is not inconsistent with its obligations under Article XVI of the GATS.  
4.40.  Health related and social services , and tourism and travel related services are not subject to 
any specific reservation under the Agreement.
29 In recreational services, betting and gambling 
services, which are not subject to express restrict ions in the U.S. GATS Schedule, are excluded 
from the scope of the Agreement.  
4.41.  In maritime transport services, the United States has liberalized vessel construction and 
repair to Korean companies. Other activities related to landside aspects of port activities are opened to Korean suppliers, conditional on reciprocity. In air transport services, the United States 
has liberalized aircraft repair and maintenance services. Space, rail and road transport are fully 
liberalized under the Agreement. Pipeline transport,  subject to an MFN exemption in the U.S. GATS 
schedule, remains subject to a national treatment requirement that may be waived subject to reciprocity. In services auxiliary to all modes of transport, the United States maintains a 
nationality requirement for licensed customs broker s. Other transport services are not subject to 
limitations under the Agreement.  
4.4.2  Korea 
4.42.  Under the Agreement, Korea listed 47 sectoral reservations for existing measures (for 
business services, telecommunications, construction, distribution, educational services, environmental services, recreational services, and transportation) (Annex I). Korea has not listed 
any horizontal measures for existing measures.  
4.43.  Korea also listed 44 reservations for sector s or activities in which current or future non-
conforming measures may be maintained or adop ted: six horizontal, 34 sector-specific (for 
business services, communications, distribution, educational services, social services, 
environmental services, and transportation services) and four non-sector specific reservations (for 
firearms, disadvantaged groups, state-owned electronic information systems and fishing) (Annex II).  
4.44.  In financial services, Korea listed 15 reservations with respect to existing measures and 
three with respect to future measures (Annex III). 
                                               
27 For example, the authority to act as a sole trustee of an indenture for a bond offering, and 
designation as a primary dealer in U. S. government debt securities are conditioned on reciprocity under the 
Agreement (rather than unbound as in the GATS). 
28 Federal Home Loan Banks, Federal Home Loan Mo rtgage Corporation, Fede ral National Mortgage 
Association, Farm Credit Banks, Federal Agricultur al Mortgage Corporation and Student Loan Marketing 
Association. 
29 The Annex II reservation for social services may appl y to certain social services, to the extent they 
are services adopted or maintained for a public purpose. WT/REG311/1 
 
- 29 - 
 
  4.45.  The following sections refer to Korea's horizontal and sector-specific commitments at the 
central government level. 
4.4.2.1  Horizontal Commitments 4.46.  Under the Agreement, Korea has removed its GATS mode 3 horizontal limitation on the 
acquisition of outstanding stocks and bonds of existing domestic companies and listed the 
limitation sector-specifically in the Annex I and Annex II.  
4.47.  With regard to sectors or activities in which current or future non-conforming measures may 
be maintained or adopted under the Agreement, Ko rea reserves the right for all sectors, to adopt 
or maintain any measure with respect to the following: the establishment or acquisition of an investment that is necessary for the maintenance of public order; the transfer or disposition of equity interests or assets held by state enterprises or governmental authorities; the acquisition of 
land by foreign persons; measures not inconsistent  with its obligations under GATS Article XVI as 
set out in its WTO Schedule of Specific Commitments; cross-border services and investment that grants differential treatment to countries under an existing international agreement in force or 
signed prior to the date of entry into force of the Agreement, as well as under any future 
agreement relating to aviation, fisheries and maritime matters, including salvage; and investment to supply a service in the exercise of governmental authority, such as law enforcement and 
correctional services. Only one of these horizontal reservations (the acquisition of land by 
foreigners) appears in Korea's GATS schedule.  
4.48.  Korea's reservation on the right to adopt or maintain any measure not inconsistent with its 
obligations under Article XVI of the GATS as set out in its Schedule of Specific Commitments is 
subject to the following: any sector-specific non-conforming measure in Korea's Annex I that does 
not list a market access limitation is consid ered fully committed in its GATS Schedule; any 
sector-specific non-conforming measures in its Annex I that lists a market access limitation is 
considered a market access limitation in its GATS Schedule; and any modifications listed in 
Appendix II-A apply to its GATS Schedule.
30 None of these modifications affect any limitation 
relating to subparagraph (f) of Article XVI.2 of th e GATS, i.e. limitations on the participation of 
foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of 
individual or aggregate foreign investment. 
4.4.2.2  Sector-specific commitments 4.49.  Compared to its GATS schedule, Korea' s sector-specific commitments are broader and 
deeper. Business services, communication services, construction and related engineering services, 
distribution services, environmental services, financial services, recreational services, and 
transport services are subject to reservations  in both the GATS an d the Agreement, but 
commitments are broader under the Agreement. Commitments are also made in educational 
services and in recreational, cultural and sporting services, which are not committed in the GATS.  
4.50.  Table 4.2 compares the degree of liberalizat ion by sector in the Agreement with that in 
Korea's GATS schedule.
31 In particular, it indicates whether sectoral commitments in the 
Agreement (except as indicated in the Agreement horizontal reservations at the central government level) are improved or same compared to those in the GATS.  
                                               
30 Improvements listed in Appendix II-A concern the following sectors/subs ectors:  research and 
development services;  market research and public opinion polling services;  services incidental to mining;  packaging services;  convention serv ices other than convention agency services;  and tourism and travel 
related services. 
31 Bearing in mind the inherent difficulties in comparing commitments scheduled using a positive versus 
negative list approach. In cases where liberalization und er the Agreement is tempered by limitations that do 
not appear in the GATS Schedule, thus making it difficult to determine the net effect, the entry in the FTA column of the table reads "partial".   WT/REG311/1 
 
- 30 - 
 
  Table 4.2 Korea: Sector-specific liberaliz ation under the Agreement at the central 
government level, excluding mode 4  
Sectors (CPC Classification) GATS  FTA 
Sectoral 
Commitments 
(except as indicated 
in the GATS 
horizontal 
commitments) Compared to the GATS, 
sectoral commitments 
(except as indicated in the 
FTA horizontal reservations 
at federal level) in the FTA 
are: Sector-specific 
reservations 
(or provisions) 
specified in 
1. Business services partial  improved  Annex I, II  
A. Professional Services  partial  improved   
B. Compute r and Related Services               full  same   
C. Research and Development  Services             partial  improved   
D. Real Estate Services                     no commitments  improved   
E. Rental/Leasing Services without Operators     partial  improved   
F. Othe r Business Services  partial  improved   
2. Communication services  partial  improved  Annex I, II  
A. Postal services                      no commitments  improved   
B. Courie r services                      no commitments  improved   
C. Telecommunication services  partial  improved   
D. Audiovisual services partial  improved   
E. Other  no commitments  improved   
3. Construction and related engineering 
services  partial  improved  Annex I  
A. General construction work fo r buildings         partial  improved   
B. 
General construction work for civil engineering   partial  improved   
C. Installation and assembly wor k              partial  improved   
D. Building completion and finishing work          partial  improved   
E. Othe r                          partial  improved   
4. Distribution services  partial  improved  Annex I, II  
A. Commission agents' services                  partial  improved   
B. Wholesale trade services  partial  partial   
C. Retailing services                                        partial  partial   
D. Franchising                                                 partial  full  
E. Othe r no commitments  full  
5. Educational services  no commitments  improved  Annex I, II  
A. Primary education services                  no commitments  same   
B. Secondary education services                no commitments  same   
C. Higher education services                  no commitments  improved   
D. Adult education                       no commitments  improved   
E. Other education services                  no commitments  same   
6. Environmental services  partial  improved  Annex I, II  
A. Sewage services                      partial  improved   
B. Refuse disposal services                  partial  improved   
C. Sanitation and similar services              no commitments  same   
D. Othe r partial  improved   
7. Financial servicesa partial  improved  Annex III  
A. All insurance  and insurance-
related services        partial  improved   
B. Banking and othe r financial  servicesb partial  improved   
C. Othe r no commitments  full  
8. Health related and soci al services no commitments  same  Annex II  
A. Hospital services no commitments  same   
B. Other Human Health Services                no commitments  same   
C. Social Services no commitments  same   
D. Othe r no commitments  same   
9. Tourism and travel related services  partial  improved  Annex II  
A. Hotels and restaurants (including catering)    partial  improved   
B. Travel agencies and tou r operators services   full same   
C. Tourist guides services         partial  improved   
D. Othe r no commitments  improved   
10. Recreational, cultural & sporting 
services no commitments  improved  Annex I, II, 
Side letter 
A. Entertainment services  no commitments  improved   
B. News agency services                    no commitments  improved   
C. Libraries, archives, museums and other 
cultural services   no commitments  improved   
D. Sporting and other recreational services        no commitments  improved   
E. Other  no commitments  improved   
11. Transport services  partial  improved  Annex I, II  
A. Maritime Transport Services  partial  improved   
B. Internal Waterways Transport  no commitments  same  
C. Air Transport Servicesc  partial  improved   
D. Space Transport                       no commitments  same   
E. Rail Transport Services  no commitments  same   
F. Road Transport Services partial  improved   
G. Pipeline Transport  no commitments  improved   WT/REG311/1 
 
- 31 - 
 
  Sectors (CPC Classification) GATS  FTA 
Sectoral 
Commitments 
(except as indicated 
in the GATS 
horizontal 
commitments) Compared to the GATS, 
sectoral commitments 
(except as indicated in the 
FTA horizontal reservations 
at federal level) in the FTA 
are: Sector-specific 
reservations 
(or provisions) 
specified in 
H. Services auxiliary to all modes of transport  partial  improved   
I. Othe r Transport Services  partial  improved   
a  subject to a positive-list approach. 
b Due to the differences in approach, i.e. negative versus positive list, an exact comparison is not 
possible. 
c  The improvement in air transport services is in  aircraft repair and maintenance services. Other 
aspects of air transport services cannot be compar ed due to differences in  scope between the GATS 
and the Agreement. 
4.51.  In business services, Korea improved its commitments in legal services (subject to 
progressive opening to allow the establishment of foreign legal consultant (FLC) offices)32, which 
are uncommitted in the GATS, while accounting services and taxation services, already partially committed in Korea's GATS schedule, are subject to progressive opening under the Agreement. 
Establishment requirements in the Agreement for en gineering and other technical services have no 
GATS equivalent as this sector is fully committed. Korea has no commitments in its GATS schedule for medical and dental services; veterinary servic es; and services provided by midwives, nurses, 
physiotherapists and para-medical personnel. Korea reserves the right to adopt or maintain any 
measure with respect to human health services. Korea has scheduled a market access and local 
presence limitation for customs clearance services. However, other professional services, neither listed nor committed under GATS, appear to be unrestricted under the Agreement. Sectoral 
coverage is expanded, resulting in either partial or full liberalization, in a number of subsectors 
including research and development services, real estate services (uncommitted in GATS), rental/leasing services without operators, and in some subsectors of other business services such 
as market research and public opinion polling services; technical testing and analysis services; 
services incidental to mining and manufacturing; placement and supply services of personnel; 
investigation and security services; building cleaning services; and publishing of books. 
4.52.  In communications, Korea has liberalized the conditions of ownership of KT Corporation and 
other facilities-based suppliers of public telecommunications services compared to its GATS 
schedule. In audiovisual services, sectoral coverage  is wider than in its GATS schedule. However, 
Korea subjects broadcasting services to nationality requirements, equity ceilings, and domestic 
content requirements and reserves the right inter alia  to adopt or maintain measures that limit 
cross-ownership among media sectors; set thresholds to determine the nationality of juridical persons; determine the membership of board of directors; and set domestic content requirements.  
4.53.  In construction and related engineering se rvices, Korea lists an establishment requirement 
under the Agreement for cross-border provision of construction services, but removes its GATS 
limitation on licensing and contract limits.  
4.54.  Distribution services is subject to a number  of restrictions in Korea's GATS Schedule. Under 
the Agreement, Korea has scheduled limitations on wholesale and retail distribution of tobacco and 
liquor; establishment requirements for a range of wholesale and retail trade services, such as pharmaceuticals and food supply; and distribution services related to publications, agriculture and 
livestock. With respect to rice, ginseng, and red ginseng, Korea reserves the right to adopt or 
maintain any measure with respect to commission agents' services; wholesaling (including importation) services; and retailing services.  
4.55.  Korea made no commitments in educational services under the GATS. In the Agreement, 
Korea has partially opened higher education in certain subjects (subject to a nationality 
requirement of the board of directors); certain branches of adult education (subject to prescriptions on the number of participants and length of courses; and vocational competency 
                                               
32 For instance, no later than the Ag reement's date of entry into forc e, US law firms may establish FLC 
offices in Korea and attorneys licensed in the United Stat es may provide legal advisory services;  no later than 
two years after the date of entry into force of the Agreement, FLC offices may enter into specific cooperative 
agreements with Korean law firms to deal jointly wi th cases where domestic and foreign legal issues are 
mixed;  and no later than five years, US law firms ma y establish joint venture firms with Korean law firms. WT/REG311/1 
 
- 32 - 
 
  development training services (subject to a local presence requirement). Nonetheless, Korea has 
scheduled a broad reservation on the right to adopt or maintain any measure with respect to pre-primary, primary, secondary education, and other education, as well as some aspects of higher and adult educational services.  
4.56.  In environmental services, Korea has removed the restriction on the number of suppliers in 
sewage services as well as the economic needs te st on disposal services (listed in its GATS 
schedule) under the Agreement. However, Korea reserves the right to adopt or maintain any 
measure with respect to a broad range of environm ental services such as treatment and supply of 
potable water, collection and treatment of municipal refuse and sewage, and sanitation and similar services.  
4.57.  In banking and other financial services, Korea's commitments apply to the provision and 
transfer of financial information, financial data processing and related software (no later than two 
years after the Agreement's entry into force). It al so listed advisory and other auxiliary services, 
excluding intermediation, relating to banking and other financial services.
33 Korea has listed 
a number of non-conforming measures applicable to the financial services sector, including an 
equity ceiling on ownership of commercial banks in Korea, limitations on branching for certain financial entities, and special treatment for government-sponsored institutions. For the securities 
industry, certain functions are reserved for the Korea Securities Depository. In portfolio 
management, Korea allows a financial institution organized outside its territory to provide investment advice and portfolio management services to the manager of a collective investment scheme located in its territory, provided that the scope of the services does not include trustee 
services, custodial services and execution services not related to managing a collective investment 
scheme.
34 Korea will consult with the United States with respect to the liberalization of portfolio 
services no later than two years after the Agreement's entry into force. 
4.58.  In insurance and related services, Korea's commitments apply to the cross-border supply of, 
or trade in, financial services for insurance of risks relating to maritime shipping, commercial aviation, space launching, freight (including satellites) and goods in international transit. It also 
listed reinsurance and retrocession services, services auxiliary to insurance and insurance 
intermediation. Korea's commitments in insurance and related services under the Agreement are wider than those in its GATS schedule (where, for example, mode 2 in life and non-life insurance 
and insurance broking and agency businesses is unbound). 
4.59.  Health related and social services are uncommitted in Korea's GATS schedule. Under the 
Agreement, Korea maintains a broad reservation reserving the right to adopt or maintain any measure with respect to social services establis hed or maintained for public purposes: income 
security or insurance, social security or insurance, social welfare, public training, health, and child 
care. Also, Korea reserves the right to adopt or maintain any measure regarding human health service.  
4.60.  In tourism and travel related services, whic h is subject to few restrictions in Korea's GATS 
schedule, Korea has not scheduled any specific non-conforming measures.
35  
4.61.  Recreational, cultural and sporting servic es, uncommitted in Korea's GATS schedule, remain 
subject to a wide range of restrictions under th e Agreement: public performances by foreigners 
require a recommendation from the Korea Media Rating Board; news agency services, and 
                                               
33 This commitment applies to the supply of credit ra ting, credit reference and investigation, general 
fund administration, indirect investment vehicle appraisal,  and bond appraisal with re gard to securities issued 
in Korea only to the extent that Korea allows the supply of these services with respec t to such assets.  It does 
not apply to credit rating of enterprises in Korea or cr edit reference and investigat ion undertaken for purposes 
of lending and other financial transactions in Korea with  respect to individuals or companies in Korea.  Once 
Korea allows the supply of these services, it may not subsequently prohibit or limit their supply. 
34 Korea's commitments in portfolio management apply to the supply of  investment advice or portfolio 
management services with regard to won-denominated assets only to the extent that Korea allows the supply 
of such services.  Once the supply of such services is permitte d by Korea, it may not subsequently prohibit or 
limit the supply of such services.  A collective investme nt scheme is defined as an in vestment trust reported to 
the Financial Supervisory Commission (FSC) pursuant to the Indirect Investment Asset Management Business 
Act (IIAMB Act) and an investment company regist ered with the FSC pursuant to the IIAMB Act. 
35 It has scheduled a measure in Annex II under Recreational Services reserving the right to adopt or 
maintain any measure with respect to tourism in  rural, fishery, and agricultural services. WT/REG311/1 
 
- 33 - 
 
  publishing of periodicals (excluding newspapers), are subject to a nationality requirement. Under 
future measures, Korea reserves the right to ad opt or maintain any measure with respect to 
conservation and restoration of cultural heritage and properties, and with respect to tourism in rural, fishery, and agricultural sites. 
4.62.  In maritime transport Korea reserves the right to adopt or maintain any measure with 
respect to the provision of international maritime passenger transportation services, maritime cabotage, and the operation of Korean vessels, thus liberalizing other aspects of maritime 
transport such as rental of vessels with crew, maintenance and repair and pushing and towing 
services. In internal waterways, and space tr ansportation, uncommitted in its GATS schedule, 
Korea reserves the right to adopt or maintain any measure. In rail transportation services, uncommitted in its GATS schedule, Korea reserves the right to adopt or maintain any measure 
according differential treatment to countries under  any international agreement in force or signed 
after the date of entry into force of the Agreement.  In road transportation services, Korea reserves 
the right to adopt or maintain any measure with  respect to taxi services, scheduled passenger 
road transportation services and freight road transportation services, thus liberalizing other 
subsectors of road transport. Services auxiliary to all modes of transport and other transport services (except storage and warehousing services related to rice) have been liberalized under the 
Agreement. 
4.5  Regulatory Provisions 4.5.1  Domestic regulation 4.63.  Like Article VI:3 of the GATS, Article 12. 7 of the Agreement provides that when a Party 
requires authorisation for the provision of a service,
36 the responsible authorities shall determine 
the application within a reasonable period of time of the completed application. Upon request the applicant shall be provided with information on the status of the application. Sectors listed by a 
Party in Annex II are specifically excluded from this requirement.  
4.64.  Article 12.7.2 mirrors some of the elements of  Article VI:4 of the GATS by providing that in 
order to ensure that measures relating to qualification requirements, procedures, technical 
standards and licensing requirements do not constitute unnecessary barriers to trade in services 
(while recognizing the Parties' right to regulate and introduce new regulations on the supply of services in order to meet national policy object ives), each Party shall endeavour to ensure that 
such measures are based on objective and transparent criteria, and in the case of licensing 
procedures are not a restriction on the supply of services. 
4.65.  Any negotiations which enter into effect pursuant to Article VI:4 of the GATS (or any other 
multilateral negotiations in which both Parties participate) shall result in consultations and 
amendments to the Agreement as appropriate.  
4.66.  The Agreement does not contain any provision equivalent to GATS Article VI.5 (Nullification 
and Impairment). 
4.5.2  Recognition 
4.67.  Article 12.9 of the Agreement mirrors the prov isions of Article VII of the GATS by providing 
that a Party may recognize the education, requirements met or certifications granted in a particular country, based on harmonization or autonomously. Further, when a Party recognizes 
(autonomously, by arrangement or agreement) th e experience or qualifications granted in the 
territory of a non-Party, nothing shall require the Party to accord such recognition to the territory of the other Party.  
4.68.  If a Party concludes an agreement on recognition with a non-Party, it shall afford the other 
Party an opportunity to negotiate accession to that other Agreement or to negotiate a comparable one. Neither Party may accord recognition in a manner that would constitute a means of 
                                               
36 The GATS specifies authorization for the supply of  a service "on which a specific commitment has 
been made".  There is no linkage in the Agreem ent between authorization and sectors liberalized. WT/REG311/1 
 
- 34 - 
 
  discrimination between countries in the application of its standards or criteria for the authorization, 
licensing, or certification of services suppliers, or a disguised restriction on trade in services.  
4.69.  Certain measures adopted by a Party related to licensing or certification of professional 
services suppliers are addressed in Annex 12-A. Fo r example, where the Parties agree, they shall 
encourage the relevant bodies to develop mutually acceptable standards and criteria for licensing 
and certification and provide recommendations on mutual recognition and to develop procedures for the temporary licensing arrangements of professional services suppliers. The relevant sectors 
are listed in Appendix 12-A-1 and comprise engin eering, architectural, and veterinary services. 
A Professional Services Working Group is established to facilitate the activities including exchanging of information and developing mutually acceptable standards with respect to professional services sectors, which may include engineering, architectural, and veterinary 
services. 
4.5.3  Subsidies 4.70.  Article 12.1.4 provides that the provisions on cross-border trade in services do not apply to 
subsidies or grants provided by a Party, including government-supported loans, guarantees and 
insurance. Similarly, for the Investment Chapter, Article 11.12.5 provides that Article 11.3 (national treatment), 11.4 (MFN treatment), and 11.9 (senior management and boards of 
directors) do not apply to subsidies or grants pr ovided by a Party, including government-supported 
loans, guarantees, and insurance. 
4.5.4  Safeguards 4.71.  There are no provisions on safeguards relating to trade in services under the Agreement.
37  
4.6  Sector specific provisions on trade in services 
4.6.1  Telecommunications 4.72.  Chapter 14 on Telecommunications applies to measures relating to public 
telecommunications networks or services (including those relating to its access and use), its 
suppliers and to value-added telecommunication services. The Chapter incorporates and extends some of the provisions found in the GATS Telecommunications Annex and Reference Paper. 
Measures affecting the broadcast or cable distribution of radio or television programming are 
excluded (Article 14.1).
38 In the event of any inconsistency between Telecommunications Chapter 
and another Chapter, the former prevails to the extent of the inconsistency (Article 14.23). 
4.73.  With respect to access to and use of pu blic telecommunications networks or services, 
service suppliers of the other Party may perfor m switching, signalling and processing and 
conversion functions, and provide services to individual or multiple end-users over leased circuits in addition to the activities contained in the GATS Annex on Telecommunications (Article 14.2). 
The Agreement uses a broad definition of major supplier (which covers all telecommunication 
services)
39 and includes regulations on access to the public telecommunications services; resale of 
public telecommunications services; access to unbundled network elements; options to 
interconnect with major suppliers of the other Party; public availability of interconnection offers 
and agreements; provisioning and pricing of leased circuits services; co-location of equipment necessary for interconnection or access to unbundled network elements; and access to poles, ducts, conduits, and rights-of-way (Articles 14.6-14.11). Annex 14-B contains additional 
obligations relating to major suppliers which, for the most part, limit the application of the certain 
Articles of Chapter 14 by Korean and Unit ed States suppliers. Suppliers of public 
                                               
37 The agreement provides that Kore a can adopt temporary safeguard me asures on transfers, which are 
not found in the GATS, according to the conditions set out in Annex 11-G (Transfers ) of the Agreement. Annex 
11-G applies to Article 11.7 and 12.10, which are incorporated into and made part of the Financial Services Chapter. 
38 A similar exception is found in the GATS Telecommunications Annex. 
39 A major supplier is defined as a supplier of public telecommunications services that has the ability to 
materially affect the terms of participation (having regard  to price and supply) in the relevant market for public 
telecommunications services or a result  of its control over essential facilitie s; or the use of its position in the 
market. WT/REG311/1 
 
- 35 - 
 
  telecommunication services operating a submarine cable system must accord suppliers of public 
telecommunications services reasonable and non-discriminatory treatment with respect to access to the submarine cable system, including landin g facilities (Article 14.12). In addition, the 
provisions on the licensing process (Article 14.16), allocation and use of scarce resources 
(Article 14.7), resolution of telecommunication disp utes (Article 14.19) are more detailed than in 
the Reference Paper. The transparency provision (Article 14.20) is also more detailed than in GATS Telecommunications Annex and the Reference Paper.  
4.74.  Finally, the Chapter introduces new regulatory provisions regarding the availability of 
enforcement procedures (Article 14.18), conditions for the supply of value-added services (Article 14.13), the establishment of independent regulatory bodies for public telecommunications 
services (Article 14.14), flexibility in the choice of technologies (Article 14.21) and the reliance on 
competitive market forces to provide choice in the supply of telecommunication services 
(Article 14.22).  
4.6.2  Financial Services 
4.75.  Chapter 13 covers all aspects of trade in financial services, including the Parties' 
commitments and provisions on MFN and national treatment, market access for financial institutions, senior management requirements, the treatment of financial and confidential 
information, transparency, self-regulatory organizations, access to payment and clearing systems, 
recognition of prudential measures and an investor-state dispute settlement mechanism.
40 It also 
incorporates provisions on Investment (Chapter 11) and Cross-Border Trade in Services (Chapter 12).
41  
4.76.  The Chapter applies to measures by a Party relating to (a) financial institutions of the other 
Party; (b) investors of the other Party, and their investments in financial institutions in the Party's territory; and (c) cross-border trade in financial services. The Chapter does not apply to measures 
adopted or maintained by a Party relating to (a) activities or services forming part of a public 
retirement plan or statutory system of social securi ty system or (b) activities or services conducted 
for the account or with the guarantee or using the financial resources of the Party, including its 
public entities, unless such activities are conducted by its financial institutions in competition with 
a public entity or a financial institution (Article 13.1). The Chapter also does not apply to laws, regulations, or requirements governing the proc urement by government agencies of financial 
services purchased for governmental purposes and not with a view to commercial resale or use in 
the supply of services for commercial sale. Notwithstanding the provision on government 
procurement, in accordance with Section H of Annex 13-B, the Parties agree to apply the principles of national and MFN treatment with respect to the acquisition or procurement of services relating 
to the sale, redemption, and distribution of cent ral government debt; services relating to the 
holding of central government fiscal and depository accounts; and services relating to the management of assets of federal government em ployees held by the Federal Retirement Thrift 
Investment Board as a fiduciary (United States only); and assets of the Korea Investment 
Corporation (Korea only, for services acquired or procured on a cross-border basis).  
4.77.  The Parties permit trade in cross-border financial services listed in Annex 13-A that 
incorporates elements of the WTO's Annex on Financial Services and the Financial Services 
Understanding.
42 In addition, Annex III to the Agreement lists their existing and future non-
conforming measures with respect to national and MFN treatment (Articles 13.2 and 13.3), market access for financial institutions (Article 13.4), cross-border trade (Article 13.5) and senior 
management and board of directors (Article 13.8).  
4.78.  In addition to the services listed in Annex 13-A, a Party allows persons located in its 
territory, and its nationals wherever located, to purchase financial services from cross-border 
                                               
40 The provision on the settlement of a dispute betwee n an investor and the host country has also been 
incorporated in Chapter 13 (Section B of Chapter 11) but applies only to those claims that a Party has 
breached Articles 11.6 (Expropriation and Compensation), 11.7 (Transfers), 11.11 (Denial of Benefits) or 11.13 (Special Formalities and Information Requirements). 
41 These provisions are expropriation and compensa tion (Article 11.6), transfers (Article 11.7), 
investment and environment (11.10), denial of benefits (Articles 12.11 and 11.11), special formalities and 
information requirements (Art icle 11.13), and payments and transfers (Article 12.10). 
42 Unlike the FSU, the Agreement applies to the cross- border supply of insurance intermediation such as 
brokerage and agency.   WT/REG311/1 
 
- 36 - 
 
  financial services suppliers of the other Party located in that territory (Article 13.5). This does not 
require a Party to permit these suppliers to do business or solicit in its territory. The Parties can require registration of cross-border financial serv ice suppliers of the other Party and of financial 
instruments. Financial institutions of the other Party are also permitted to supply any new service 
that a Party would permit to its own financial institutions, in like circumstances, to supply without 
additional legislative action by the Party. The Parties may determine the institutional and juridical form used to supply such services and to establish an authorization requirement (Article 13.6). 
4.79.  The Parties agree not to adopt or maintain, with respect to financial institutions of the other 
Party or their investors seeking to establish such institutions, measures that impose numerical limitations or juridical requirements (Article 13.4). 
4.80.  The Parties are not precluded from adopting or maintaining prudential measures to protect 
investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial 
institution or cross-border financial service supplier or to ensure the integrity and stability of the financial system. Such measures should not be used to circumvent the Parties' obligations. The 
Parties may apply non-discriminatory measures of general application taken by any public entity in 
pursuit of monetary and related credit policies or exchange rate policies. Finally, under certain conditions, the Parties can prevent or limit transfers by a financial institution or cross-border 
financial services suppliers (Article 13.10.). 
4.81.  The Parties commit to promote regulatory transparency in financial services, publish in 
advance any regulations of general application that  they propose to adopt, make available to the 
interested persons and the other Party a reasonable opportunity to comment on such proposed 
regulations, and at the time it adopts final regulations, address in writing substantive comments 
received from interested persons with respect to the proposed regulations. Each Party's regulatory 
authorities shall make publicly available the requirements, including any documentation required 
for completing applications relating to the supply of financial services (Article 13.11).  
4.82.  If a Party requires a financial institution or cross-border service supplier to engage in a self-
regulatory organization in order to provide a financial service, the self-regulatory organization 
must observe the principles of national and MFN treatment (Article 13.12).  
4.83.  The Parties commit to grant on the basis of national treatment, financial institutions of the 
other Party established in its territory access to payment and clearing systems operated by public entities and to official funding and refinancing (but not lender-of-last-resort) facilities, which is not 
intended to confer access to the Party's lender of last resort facilities (Article 13.13). 
4.84.  A Party may recognize the prudential measures of a non-Party in the application of 
measures covered by Chapter 13, either accorded autonomously, achieved through harmonization 
or other means, or based on an agreement or arrangement with the non-Party. The Party 
according such recognition of prudential measures  shall provide adequate opportunity to the other 
Party to negotiate accession to the agreemen t, or to negotiate a comparable agreement 
(Article 13.14). 
4.85.  Articles 13.18 and 13.19 contain provisions relating to dispute settlement and investment 
disputes in financial services. The dispute settlement procedures of Chapter 22 and the investor-state dispute settlement mechanism of Ch apter 11 apply as modified by these Articles.  
4.86.  The Agreement provides for the establishment of a Financial Services Committee 
(Article 13.16 and Annex 13-C). 
4.6.3  Express Delivery Services 
4.87.  Annex 12-B applies to express delivery serv ices, defined as the collection, transport, and 
delivery of documents, printed matter, parcels, goods, or other items on an expedited basis while tracking and maintaining control of these items throughout the supply of the service. The Parties 
confirm their desire to maintain at least the level of market openness for express delivery services 
in existence on the date of signature of the Agr eement and to engage in consultations if a Party 
considers that such level of access is not being maintained.  WT/REG311/1 
 
- 37 - 
 
  4.88.  The Parties agree to ensure that where a monopoly supplier of postal services compete, 
either directly or through an affiliated company,  in the supply of express delivery services outside 
the scope of its monopoly rights, it does not abuse its monopoly position and act contrary to the Agreement's provisions on national and MFN treatment, market access or designated monopolies. 
The Parties reaffirm their rights and obligations under Article VIII of the GATS with respect to 
express delivery services. They confirm their inte ntion to prevent revenues derived from monopoly 
postal services being directed to confer an advantage to their own or any other competitive 
supplier's express delivery services. 
4.89.  In a letter dated 30 June 2007, Korea agrees to expand the exceptions to the Korean Postal 
Authority's monopoly to include all international document delivery services thus liberalizing these services under the Agreement. Korea intended to expand gradually the exceptions to the Korean 
Postal Authority's monopoly to increase the scope of private delivery services that are permitted 
and to establish a scheme ensuring the independence of Korea's postal regulatory system. Korea plans to implement such amendments within five years.  
5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 5.1.  Chapter 21 contains provisions on transparen cy and anti-corruption. The Parties must ensure 
that their laws, regulations, procedures and administrative rulings on any matter covered by the 
Agreement are promptly published or made avai lable to the Parties and interested persons 
(Article 21.1). Each Party agrees to publish in advance any measures that it proposes to adopt and to provide interested persons and the other Party a reasonable opportunity to comment on such 
measures. Proposed regulations of general applicatio n of the central level of government should be 
published not less than 40 days before the date public comments are due and should include an explanation of the purpose of and ra tionale for the proposed regulations.
43 Upon adoption such 
regulations should be published and should include significant, substantive comments received 
during the comment period. To ensure that their administrative proceedings are applied in a consistent, impartial and reasonable manner, the Parties also commit to guarantee that all 
procedures are in line with domestic law and that certain procedural formalities (e.g. provision of 
reasonable notice and information, and opportunity to present facts and arguments prior to any final administrative action) are respected to the extent possible (Article 21.3). According to Article 21.4, each Party shall also establish or maintain judicial, quasi-judicial, or administrative 
tribunal or procedures to review and correct final administrative actions for matters covered by the 
Agreement.  
5.2.  Article 21.6 sets out the anti-corruption measures the Parties agree to adopt or maintain in 
order to establish bribery and corruption activities as criminal offences in international trade or 
investment.  
5.2  Current payments and capital movements 
5.3.  The Agreement includes provisions on the movement of payments and capital across borders 
relating to services (supplied on a cross-border  basis) and investments. Under Article 12.10, the 
Parties allow free and unrestricted flows of all transfers and payments relating to the cross-border supply of services. The same obligation applies inter alia to transfers relating to covered 
investments; contributions to capital; profits, di vidends, capital gains and proceeds from the sale 
of a covered investment; interest, royalty paymen ts, management fees and technical assistance; 
payments made under contract; and payments arising from a dispute (Article 11.7). The Parties 
can deny a transfer or payment in the case of: (a ) bankruptcy, insolvency, or the protection of the 
rights of creditors; (b) issuing, trading, or dealin g in securities, futures, options, or derivatives; 
(c) financial reporting or record keeping of transfers when necessary to assist law enforcement or 
financial regulatory authorities; (d) criminal or penal offences; or (e) compliance with orders or 
judgments in judicial or administrative proceeding s. In the case of financial services, the Parties 
can apply measures to prevent or limit transfers (by a financial institution or cross-border financial 
                                               
43 In a letter dated 30 June 2007, Korea agrees to amend relevant laws or regulations to provide for a 
public comment period of no less th an 40 days and agrees to remove th e requirement to conduct interagency 
consultations before the publication of pr oposed regulations for public comment. WT/REG311/1 
 
- 38 - 
 
  service supplier) in order to maintain the safety, soundness, integrity or financial responsibility of 
institutions or cross-border financial services suppliers (Article 13.10).  
5.3  Exceptions 5.4.  Chapter 23 describes the circumstances under which the Parties can derogate from the 
provisions in the Agreement. The Chapter covers  general and security exceptions, taxation, and 
disclosure of information.  
5.5.  Articles XX of GATT 1994 and XIV of the GA TS are incorporated into and made part of the 
Agreement, mutatis mutandis  (Article 23.1). GATT Article XX applies to Chapters 2 to 4 and 6 to 
9
44 in the case of goods; while GATS Article XIV applies to Chapters 12, 14 and 1545 in the case of 
services. The Parties understand that the measures referred to in Article XX (b) of GATT 1994 and Article XIV of GATS include environmental measures necessary to protect human, animal, or plant 
life or health.  
5.6.  Article 23.2 indicates that nothing in the Agreement shall be construed as requiring a Party to 
furnish or allow access to any information contrary to its security interests. A Party can also apply 
measures that it considers necessary to fulfil its obligations with respect to the maintenance or 
restoration of international peace and security or to protect its essential security interests.  
5.7.  The Agreement does not apply to taxation measures except as provided for in Article 23.3 
and does not affect the rights and obligations of the Parties under any tax convention. In the case 
of any inconsistency between the Agreement and the convention, the convention will prevail to the 
extent of the inconsistency.  
5.8.  The Parties are not obliged to furnish or allow access to confidential information whose 
disclosure could impede law enforcement or be contrary to the public interest or which would 
prejudice the legitimate commercial interests of particular enterprises, public or private (Article 23.4).  
5.4  Accession and Withdrawal 
5.9.  Any country or group of countries can accede to the Agreement subject to the terms and 
conditions agreed between the Parties (Article 24.4). 
5.10.  Either Party can end the Agreement by a written notification to the other Party. The 
termination will take effect 180 days after the notification (Article 24.5). 
5.5  Institutional framework 5.11.  The Parties establish a Joint Committee comp rising officials of both Parties and co-chaired 
by the United States Trade Representative and Mi nister for Trade of Korea, or their respective 
designees (Article 22.2). The Joint Committee is  the main body of the Agreement and is 
responsible for supervising its implementation an d the work of all committees, working groups and 
other bodies established under the Agreement; considering ways to further enhance trade 
relations between the Parties; seeking to resolve di sputes that arise regarding the interpretation or 
application of the Agreement; establishing the amo unt of remuneration and expenses to be paid to 
panellists; and considering any other matter that may affect the operation of the Agreement 
(Article 22.2). It shall establish its own rules and procedures, take all its decisions by consensus and meet once a year or in special session wi thin 30 days upon the request of the Parties 
(Article 22.2).
46  
                                               
44 These are National Treatment and Market Access for Goods (Chapter 2), Agriculture (Chapter 3), 
Textiles and Apparel (Chapter 4), Rules of Origin (Cha pter 6), Customs Administration and Trade Facilitation 
(Chapter 7), Sanitary and Phytosanit ary Measures (Chapter 8), and Techni cal Barriers to Trade (Chapter 9). 
45 These are Cross-Border Trade in Services (Cha pter 12), Telecommunications (Chapter 14) and 
Electronic Commerce (Chapter 15). 
46 According to the Parties, the Joint Committee held its inaugural meeting on 16 May 2012 in 
Washington, D.C. WT/REG311/1 
 
- 39 - 
 
  5.12.  The Parties establish a Committee on Trade in Goods to deal with issues related to tariff 
liberalization, rules of origin and origin procedures and customs administration and trade facilitation (Article 2.14). The Committees established under the Agreement include the Committees on Trade in Goods, Agricultural Trade, Textile and Apparel Trade Matters, SPS, TBT, 
Financial Services, and Fisheries.  
5.13.  Under Annex 22-B, the Parties establish a Committee on Outward Processing Zones (OPZ) 
on the Korean Peninsula charged with identifying geographic areas that may be designated 
outward processing zones and establishing the crit eria that must be met before goods from any 
outward processing zone may be considered origin ating goods for the purposes of the Agreement. 
The Committee shall also establish a maximum threshold for the value of the total input of the originating final good that may be added within the outward processing zone. The Committee was 
to meet on the first anniversary of the entry into force of the Agreement.
47 
5.6  Dispute settlement  5.14.  The Agreement includes state-to-state (Chapter 22, Section B) and investor-state 
(Chapter 11, Section B) dispute settlement mechanisms.  
5.15.  Section B of Chapter 22 on state-to-state disputes settlement applies to any dispute related 
to the interpretation or application of the Agreement or wherever a Party considers that: a 
measure of the other Party is inconsistent with its obligations; the other Party has otherwise failed 
to carry out its obligations; or any benefit the Party could reasonably have expected to accrue to it under Chapters 2 (National Treatment and Market Access for Goods), 3 (Agriculture), 4 (Textiles and Apparel), 6 (Rules of Origin and Origin Procedures), 12 (Cross-Border Trade in 
Services), 17 (Government Procurement), or 18 (Inte llectual Property Rights) is being nullified or 
impaired as a result of a measure that is not inconsistent with the Agreement.
48 
5.16.  For disputes regarding any matter arising under the Agreement and the WTO Agreement (or 
any other agreement of which both Parties are members) the complaining Party may select either 
forum for the settlement of the dispute. Once the forum has been selected, it must be used to the exclusion of the other (Article 22.6). 
5.17.  The Parties are encouraged to resolve disputes through consultations (Article 22.7). Failure 
to resolve a matter within 60 days of the date of receipt of the request for consultations, or 20 days in case of perishable goods
49, may result in either Party referring the matter to the Joint 
Committee through the delivery of written notification to the other Party.  
5.18.  In the case of issues arising under the Labour or Environmental Chapters, the Parties may 
refer the matter to the Joint Committee if the matter is not resolved within 60 days of the delivery of a request for consultation. 
5.19.  Articles 22.9-22.10 detail the qualifications of panelists, panel, and chair selection as well as 
the Panel's rules of procedure. The Panel consists of  three panelists with expertise or experience in 
law, international trade, and dispute resolution under international trade agreements. Within 
180 days from the date the Chair is appointed the Panel will issue an initial report. The Parties can 
submit their comments within 14 days. After considering their comments the Panel may modify its report and make any further examination it considers appropriate (Article 22.11). The Panel will present its final report within 45 days following the submission of the initial report and make it 
public 15 days thereafter, subject to the protection of confidential information. Following receipt of 
the report, the Parties will agree on the resolution  of the dispute, including wherever possible, the 
removal of the measure not conforming to the Agreement or of the nullification or impairment. 
Failure to agree on a resolution within 45 days of receiving the final report, or such other period as 
the Parties agree, will result in the Party complained against entering negotiations with the complaining Party with a view to developing mutually acceptable compensation.  
                                               
47 According to the Parties, the first Committee on  OPZ was held on 4 November 2013 in Washington, 
D.C. 
48 The Parties may not invoke state-to-state dispute settlement procedures with respect to a benefit 
under Chapter 12 (Cross-Border Trade in Services) or 18 (Intellectual Property Rights) if the measure is 
subject to an exception under Article 23.1 (Exceptions). 
49 These are perishable agricultural and fish goods classified in HS Chapters 1 to 24. WT/REG311/1 
 
- 40 - 
 
  5.20.  Failure to agree on compensation within 30 days, or if the complaining Party believes that 
the other Party has failed to observe the terms of the Agreement may result in the complaining Party suspending benefits to the other Party of equivalent effect following notice to the other Party. Benefits may be suspended 30 days after notice has been given to the other Party. If the 
Party complained against considers that the level of suspension of benefits is excessive or that it 
has eliminated the non-conforming measure it may request that the panel be reconvened. If the panel determines that the level of benefits proposed to be suspended is excessive, it shall 
determine the level of benefits it considers to be of equivalent effect . Benefits may not be 
suspended if the Party complained against provides written notice that it will pay an annual monetary assessment. If the Parties are unable to agree on the amount of the assessment, it shall 
be set at a level equal to 50% of the level of benefits determined by the panel to be of equivalent 
effect, or if the panel has not determined the level, 50% of the level that the complaining Party 
proposed to suspend. The monetary assessment sh all be paid to the complaining Party or where 
circumstances warrant, the Joint Committee may decide that an assessment shall be paid into a 
fund for appropriate initiatives to facilitate trade between the Parties.  
5.21.  The Joint Committee shall review the operation and effectiveness of the provisions on non-
implementation not later than five years after the Agreement's entry into force or within six 
months after the benefits have been suspended or monetary assessments have been paid in five 
proceedings initiated under the Agreement's dispute settlement chapter, whichever occurs first.
50  
5.22.  Neither Party may provide for a right of action under its law against the other Party on the 
ground that a measure of the other Party is inconsistent with the Agreement (Article 22.16). The 
Parties encourage the use of arbitration and other means of alternative dispute resolution for the 
settlement of international commercial disputes between private parties in the free trade area. 
5.23.  Annex 22-A contains alternative procedures for disputes concerning motor vehicles which 
inter alia  prescribe shorter time periods for resoluti on of the dispute within the Joint Committee 
and for the rules of procedure of the panel and contains a penalty provision that allows for the complaining Party (if a panel finds in its favour) to raise its tariff on motor vehicles of heading 
8703 to its prevailing MFN rate. The procedures set out in the Annex shall terminate ten years 
after the Agreement's entry into force, provided that no panel established under the Annex during that period has determined failure to conform with the obligations or that a Party's measure has caused nullification or impairment. 
5.7  Relationship with other agreements concluded by the Parties 
5.24.  In Article 1.2, the Parties affirm their existing rights and obligations with respect to each 
other under the WTO Agreement and other agreements to which they are party. The Agreement 
does not prevent the Parties from providing for more favourable treatment of goods, services, 
investments or persons than that provided for under the Agreement in line with any international legal obligation.  
5.25.  Table 5.1 lists the notified and non-notified (if any) trade agreements in which the 
United States or Korea participate (excluding the current Agreement). 
Table 5.1 United States and Korea: Participat ion in other RTAs (notified and non-notified 
in force), as of 24 July 2014
 
RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
UNITED STATES 
US - Panama 31-Oct-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
US - Colombia 15-May-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
US - Peru 01-Feb-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
US - Oman 01-Jan-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
US - Bahrain 01-Aug-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Dominican Republic - Central 01-Mar-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
                                               
50 According to the Parties, as of July 2014, the provisions on non-implementation have not been 
invoked. WT/REG311/1 
 
- 41 - 
 
  RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
America - United States Free 
Trade Agreement (CAFTA-DR) 
US - Morocco 01-Jan-06 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
US - Australia 01-Jan-05 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
US - Singapore 01-Jan-04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
US - Chile 01-Jan-04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
US - Jordan 17-Dec-01 Goods & Services 2002 GATT Art. XXIV & GATS Art. V 
North American Free Trade 
Agreement (NAFTA) 01-Jan-94 Goods  
Services 1993 
1995 GATT Art. XXIV & GATS Art. V 
US - Israel 19-Aug-85 Goods 1985 GATT Art. XXIV 
REPUBLIC OF KOREA 
Rep. of Korea - Turkey 01-May-13 Goods 2013 GATT Art. XXIV 
Peru - Rep. of Korea 01-Aug-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
EU - Rep. of Korea 01-Jul-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
ASEAN - Rep. of Korea 01-Jan-10 
01-May-09 Goods  
Services 2011 Enabling Clause, GATT Art. 
XXIV & GATS Art. V 
Rep. of Korea - India 01-Jan-10 Goods & Services 2010 Enabling Clause, GATT Art. 
XXIV & GATS Art. V 
EFTA - Rep. of Korea 01-Sep-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Rep. of Korea - Singapore 02-Mar-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Rep. of Korea - Chile 01-Apr-04 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
Asia Pacific Trade Agreement (APTA) - Accession of China 01-Jan-02 Goods 2004 Enabling Clause 
Global System of Trade 
Preferences among 
Developing Countries (GSTP) 19-Apr-89 Goods 1989 Enabling Clause 
Asia Pacific Trade Agreement 
(APTA) 17-Jun-76 Goods 1976 Enabling Clause 
Protocol on Trade 
Negotiations (PTN) 11-Feb-73 Goods 1971 Enabling Clause 
Source: WTO Secretariat. 
5.8  Government procurement 
5.26.  Chapter 17 contains the Parties' commitments and procedures in government procurement. 
They agree to apply the APEC Non-Binding Principles on Government Procurement  to all their 
government procurement that is outside the scope of the WTO Government Procurement 
Agreement (GPA) and this Chapter. Chapter 17 ap plies to any measure affecting procurement by 
covered government entities of goods, services an d construction services listed in the Parties' 
Schedules to Annex 17-A for a value equal to or exceeding a given threshold (Article 17.2). The 
list of covered governmental entities is given in Annex 17-A (Central level government entities). 
Korea listed 51 entities, while the United States listed 79. In both cases, exceptions apply.  
5.27.  The Chapter does not apply to non-contractual agreements or any form of assistance that a 
Party provides; the procurement or acquisition of fiscal agency or depositary services, liquidation 
and management services for regulated financial institutions, or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other 
securities; or procurement conducted for the specific purpose of providing international assistance, 
including development aids (Article 17.2). 
5.28.  For all covered procurement under the Agreement, the Parties apply a number of Articles 
and Appendices II to IV of the GPA, mutatis mutandis  (both countries are parties to the WTO 
GPA). A procuring entity may exclude a supplier on grounds such as bankruptcy, false 
declarations, significant or persistent deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts, final judgments in respect of serious crimes, and 
failure to pay taxes (Article 17.5).  
5.29.  The coverage of central government entities under the Agreement for the United States is 
equivalent to the coverage provided by the United States under the GPA at the time the WT/REG311/1 
 
- 42 - 
 
  Agreement was concluded. However U.S. coverage was expanded under the revised GPA which 
came into effect on 6 April 2014. Coverage of goods, services and construction services is equivalent to that provided under the GPA. Unlike  the GPA, the Agreement does not include for the 
United States any coverage at the sub-central government level (Annex 2 in the GPA), nor of 
entities listed in its Annex 3 to the GPA. In g oods and services, the threshold in the Agreement is 
lower than in the GPA for central level entities. The construction services threshold is unchanged. Procurement thresholds for each Party are shown in Tables 5.2 and 5.3.
51  
Table 5.2 Procurement thresholds applied by the United States in the Agreement and the 
GPA 
United States The Agreement GPA 
Central entities  
(Annex 17-A) 
(79 entities) Central entities 
 (Annex 1) 
(85 entities)  Sub-central 
entities 
(Annex 2) Other entities 
(Annex 3) 
Thresholds 
US $ Thresholds (US $) 
for the period 2014-2015 
Goods 100,000 204,000 558,000 629,000 
Services 100,000 204,000 558,000 629,000 
Construction 
Services  7,777,000 7,777,000 7,777,000 7,777,000 
Source: Free Trade Agreement between the United States and Korea, Annex 17-A and WTO document 
 GPA/W/314/Add.2. 
5.30.  Korea has increased coverage of the number of central level government entities under the 
Agreement to 51 (up from 35 in the GPA), by including inter alia  the National Emergency 
Management Agency, the National Human Rights Commission of Korea and the Korean Broadcasting Commission. Unlike the GPA, the Agreement does not include for Korea any coverage 
at the sub-central government level (Annex 2 in the GPA), nor of entities listed in its Annex 3 to 
the GPA. In goods and services, the threshold in  the Agreement is lower than in the GPA for 
central level entities. The construction services threshold is unchanged. 
Table 5.3 Procurement thresholds applied by Korea in the Agreement and the GPA 
Korea The Agreement GPA 
Central entities  
(Annex 17-A) 
(51 entities) Central entities 
 (Annex 1) 
(35 entities)  Sub-central 
entities 
(Annex 2) Other entities 
(Annex 3) 
Thresholds 
Korean won Thresholds (Korean won) 
for the period 2013-2014 
Goods 100m  230m 350m 790m 
Services 100m  230m 350m not committed 
Construction 
Services  8.7 billion 8.7 billion 26.2 billion 26.2 billion 
Source: Free Trade Agreement between the United States and Korea, Annexes 17-A and WTO document 
 GPA/W/309/Add.11. 
5.31.  The Parties specify that when procurement is conducted using electronic means, information 
should be conducted using information technology systems that are interoperable with other 
generally available information technology systems and software (Article 17.4). The valuation of a 
covered procurement shall include its estimated maximum total value over its entire duration (Article 17.4). In order for a supplier to participate in a procurement or be awarded a contract, a procuring entity shall not impose the condition that the supplier has previously been awarded by a 
procuring entity of that Party or that the supplier has prior work experience in the territory of that 
Party (Article 17.5). Other provisions relate to publication of notices (Article 17.6); technical specifications (Article 17.7); time-periods for the submission of tenders (Article 17.8); 
modifications and rectifications to coverage (Article 17.9); and the establishment of a Working 
Group on Procurement (Article 17.10). 
                                               
51 The thresholds are to be adjusted based on consultations between the Parties. WT/REG311/1 
 
- 43 - 
 
  5.9  Intellectual property rights 
5.32.  Intellectual property rights are the su bject of Chapter 18 of the Agreement, which 
significantly increases the level of intellectual property protection beyond existing rights and obligations under the TRIPS Agreement as described below. Protection is enhanced in terms of the 
acquisition, scope, maintenance, and particularly enforcement of intellectual property rights. 
General provisions (Article 18.1) include national treatment and transparency obligations as well as an indication of the Parties' intentions to ratify or accede to a number of other international 
agreements on intellectual property.
52  
5.9.1.1  Trademarks and geographical indications 5.33.  The Agreement details the nature of protection that the Parties should provide with respect 
to trademarks and geographical indications (eligible for same protection as trademarks), as well as 
various procedural requirements. In particular, an electronic system must be created for the 
application, electronic processing, registration and maintenance of trademarks, as well as a publicly available electronic database of tradem ark applications and registrations. The Agreement 
inter alia  expands the definition of trademark to include protection for non-visually perceptible 
marks such as sounds and scents. The term of protection for trademarks is ten years (seven under the TRIPS Agreement). Article 18.3 deals with domain names on the Internet. 
5.9.1.2  Copyrights and related rights 
5.34.  Provisions with respect to copyright and related rights include a requirement to provide 
copyright protection for the life of the author plus 70 years (50 years in the TRIPS Agreement), provided that, for Korea, full implementation starts  within two years after the entry into force. On 
the basis other than the life of a natural person the term shall be not less than 70 years from the 
end of the calendar year of the first author ized publication of the work, performance or 
phonogram, or failing such publication within 25 years from the creation of the work, not less than 
70 years from the end of the calendar year of the creation of the work (Article 18.4). The 
Agreement provides for detailed measures to enhance legal protection and effective legal remedies against the circumvention of effective technolo gical measures that authors, performers, and 
producers of phonograms use in connection with the exercise of their rights and that restrict 
unauthorized acts in respect of their works, pe rformances, and phonograms. The remedies set out 
in Article 18.10 include criminal procedures and re medies. Article 18.7 concerns the protection of 
encrypted program-carrying satellite and cable signals. 
5.35.  The Chapter is accompanied by a series of letters dated 30 June 2007 dealing inter alia  with 
effective written notification by a copyright owne r to a service provider's publicly designated 
representative, and effective written counter-not ification by a subscriber whose material was 
removed or disabled as a result of mistake or misidentification of material; the importance of the 
prevention of illegal copying and distribution of copyrighted works on university campuses; the 
objective of shutting down of Internet sites that permit the unauthorized reproduction, 
distribution, or transmission of copyright works. 
5.9.1.3  Patents 5.36.  Patents shall be made available for any inve ntion in all fields of technology, provided that 
the invention is new, involves an inventive step and is capable of industrial application. Patents are 
                                               
52 Article 18.1.3 requires the Parties to ratify or acce de to the following agreements by the date of entry 
into force of the Agreement: the Patent Cooperation Treaty (1970), as amended in 1979; the Paris Convention 
for the Protection of Industrial Property  (1967);  the Berne Convention for the Protection of Literary and 
Artistic Works  (1971);  Convention Relating to the Distribution of  Programme-Carrying Signals Transmitted by 
Satellite (1974); the Protocol Relating to the Madrid Agreement Co ncerning the International Registration of 
Marks (1989); the Budapest Treaty on the International Recognit ion of the Deposit of Microorganisms for the 
Purposes of Patent Procedure (1977), as amended in 1980; the International Convention for the Protection of 
New Varieties of Plants (1991); the Trademark Law Treaty (1994); the WIPO Copyright Treaty (1996);  and 
the WIPO Performances and Phonograms Treaty (1996). Article 18.1.4 requires the Parties to make all 
reasonable efforts to ratify or accede to: the Patent Law Treaty (2000); the Hague Agreement Concerning the 
International Registration of Industrial Designs (1999) and the Singapore Treaty on the Law of Trademarks  
(2006). Korea has acceded to the agreements prescribed in Articles 18.1.3 and 18.1.4 regarding copyright and related rights. WT/REG311/1 
 
- 44 - 
 
  available for new uses or methods of using a known product. The Parties may exclude from 
patentability inventions as necessary to protect public order  or morality, including to protect 
human, animal, or plant life or health or the environment, provided that such exclusion is not made merely because the exploitation is prohibited by law; and diagnostic, therapeutic, and 
surgical procedures for the treatment of humans or  animals. Article 18.8 provides that a patent 
may be revoked only on grounds that would have justified a refusal to grant the patent. However, a Party may also provide that fraud, misrepresentation, or inequitable conduct may be the basis 
for revoking or holding a patent unenforceable. Article 18.9 - Measures Related to Certain 
Regulated Products - grants protection from use by third parties to data and other information submitted in connection with marketing approval. The products concerned are agricultural chemical products and pharmaceuticals. Protection is for a period of three to five years for 
pharmaceutical products and ten years for agricultural chemical products from the date of 
marketing approval. Regarding measures taken in the marketing approval process of pharmaceutical products, dispute settlement proc eedings of the Agreement will not be invoked 
during the first 18 months of the Agreement's entry into force. 
5.37.  With respect to enforcement of IPRs Article 18.10 provides inter alia  that each Party shall 
publish final judicial decisions or administrative rulings of general applicability; make available to 
rights holders civil judicial procedures concerning the enforcement of any IPRs; establish or 
maintain a system of pre-established damages for copyright and related rights, and trademark 
counterfeiting; award payment of legal fees by th e losing party; order the seizure of allegedly 
infringing goods and documentary evidence; provide that its judicial authorities have the authority 
to fine, detain, or imprison, a party to a civil judicial proceeding who fails to abide by valid orders 
issued by such authorities and impose sanctions on parties to a civil judicial proceeding; and impose provisional measures. The Article contains additional provisions relating to border 
measures, criminal procedures and remedies and liability for service providers and limitations. 
Article 18.11 contains understandings regarding certain public health measures and affirms the Parties' commitment to the Declaration on the TRIPS Agreement and Public Health  
(WT/MIN(01)/DEC/2). 
5.10  Electronic commerce 5.38.  Chapter 15 contains provisions on electronic commerce, including trade in digital products. 
The Parties affirm that measures affecting the supply of services delivered or performed 
electronically are subject to the obligations in th e Chapters on Investment, Cross-Border Trade in 
Services and Financial Services subject to any exceptions or non-conforming measures as set out in the Agreement. Article 15.3 prohibits the applic ation of customs duties, fees or charges on the 
import or export of products delivered electronically; it also provides for the non-discriminatory 
treatment of digital products, both in terms of discrimination against other like digital products and vis-à-vis the other Party or non-Parties to the Ag reement. However, the Parties reserve the right 
to impose internal taxes or charges on digital products, provided that they are not inconsistent 
with the Agreement. The Chapter also includes provisions on electronic authentication and 
electronic signatures, on-line consumer protection , paperless trading, and principles on access to 
and use of the internet for electronic commerce (Articles 15.4-15.7). 
5.11  Labour 
5.39.  In Chapter 19, the Parties reaffirm their obligations as members of the International 
Labour Organization (ILO) (Article 19.1), and to adopt and maintain the rights stated in the ILO's 
1998 Declaration  on Fundamental Principles and Rights at Work and its Follow-up  (Article 19.2). 
The Parties agree to not waive or derogate from the statutes and regulations applying those rights in a manner affecting trade or investment where the waiver or derogation would be inconsistent 
with one of those rights (Article 19.2). The Parties also agree to effectively enforce their labour 
laws in their own territories (Article 19.3). The Parties commit to providing appropriate access to tribunals for the enforcement of their labour laws to persons with a recognized interest and to ensure that proceedings before such tribunals ar e fair, equitable, and transparent. Tribunals may 
include administrative, quasi-judicial, judicial or labour tribunals (Article 19.4). Under Annex 19-A, 
the Parties establish a Labour Cooperation Mechanism through which they agree to engage in cooperative activities. A Labour Affairs Council is established under the Agreement to oversee the 
implementation of the Chapter and of the Labour Cooperation Mechanism. A Party may request 
consultations with the other Party regarding any matter arising under the Chapter upon written request. The Parties do not have recourse to dispute settlement under the Agreement without first WT/REG311/1 
 
- 45 - 
 
  seeking to resolve the matter through labour consultations (which may be in lieu of the 
consultations stage of the Dispute Settlement procedures). 
5.12  Environment 5.40.  Chapter 20 provides that each Party shall strive to ensure that its environmental laws and 
policies provide for and encourage high levels of environmental protection. In Chapter 20 the 
Parties agree to adopt, maintain and implement laws, regulations, and all other measures to fulfil its obligations under specified multilateral en vironmental agreements (“covered agreements”).
53 
The Chapter also includes an obligation on each Party not to fail to effectively enforce its 
environmental laws, and its laws, regulations, and other measures to fulfil its obligations under the covered agreements, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties. The Parties understand that with respect to the 
enforcement of environmental laws and all laws, regulations, and other measures to fulfil a Party’s 
obligations under the covered agreements, a Party is in compliance with this obligation where a course of action or inaction reflects a reasonable, articulable, bona fide exercise of prosecutorial 
discretion, or results from a reasonable, articulable, bona fide decision regarding the allocation of 
environmental enforcement resources. The Chapter specifies that, for greater certainty, nothing in the Chapter shall be construed to empower a Party’s authorities to undertake environmental law 
enforcement activities in the territory of the othe r Party. Each Party shall ensure that interested 
persons may request the Party's authorities to investigate alleged violations of its environmental laws. The Parties shall ensure that judicial, quasi-judicial or administrative proceedings are available under their laws to provide sanctions or  remedies for violations of their environmental 
laws. Each Party shall ensure in accordance with its law that such proceedings are fair, equitable, 
transparent and open to the public unless the admini stration of justice otherwise requires. In case 
of violations of its environmental laws, each Pa rty agrees to provide appropriate and effective 
sanctions or remedies (Article 20.4).  
5.41.  The Parties establish an Environmental Affa irs Council to oversee the implementation of the 
Chapter. They agree to promote public awaren ess of environmental laws by ensuring that 
information is available to the public regarding its environmental laws and environmental law 
enforcement and compliance procedures. A Party may request consultations with the other Party regarding any matter arising under the Chapter upon  written request. They do not have recourse 
to dispute settlement under the Agreement withou t first seeking to resolve the matter through 
consultations. In the event of any inconsistency between a Party's obligation under the Agreement 
and any of the covered multilateral environment agreements, the Party shall seek to balance its obligations under both agreements, but this shall not preclude the Party from taking a particular 
measure to comply with its obligations under th e covered agreement, provided that the primary 
purpose of the measure is not to impose a disguised restriction on trade. 
 
                                               
53 These are the Convention on International Trade in Endangered Species of Wild Fauna and Flora , the 
Montreal Protocol on Substances that Deplete the Ozone Layer , the Protocol of 1978 Relating to the 
International Convention for the Prevention of Pollution from Ships , the Convention on Wetlands of 
International Importance Especially as Waterfowl Habitat , the Convention on the Conservation of Antarctic 
Marine Living Resources , the International Convention for the Regulation of Whaling , and the Convention for 
the Establishment of an Inter-American Tropical Tuna Commission .  The Parties may agree in writing to extend 
this list. WT/REG311/1 
 
- 46 - 
 
 
 ANNEX 1 
INDICATORS OF TRADE LIBERALIZATION UNDER THE AGREEMENT 
1. Tables A1.1 (United States) and A1.2 (Korea) present the Parties' tariff elimination schedule 
by agricultural and non-agricultural products. In the case of the United States, the share of the 
number of duty-free tariff lines went from 36.8%  to 83% upon the Agreement's entry into force 
and the overall average fell from 4.7% to 1.3%. Fo r agricultural goods, Korean exporters face in 
the United States an average tariff rate of 4.3% instead 8.5%, and 0.8% instead of 4% for 
non-agricultural goods. By 2021, following ten year s of implementation, 99.2% of all tariff lines 
will be duty free, of which 99.8% for non-agricultural products and 96.2% for agricultural products. By 2026, tariffs on all products will be liberalized.  
Table A1.1 United States: Indicators of MFN tariff rates and preferential rates for 
imports from Korea 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products  
Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Overal
l (%) On 
dutiabl
e (%) Overall 
(%) On 
dutiabl
e (%) Overall 
(%) On 
dutiabl
e (%) 
MFN 2012 4.7 7.5 36.8 8.5  11.0 22.8 4.0 6.6 39.5  
Korea 2012 1.3 8.5 83.0 4.3 16.4 65.6 0.8 6.0 86.3 
 2013 1.1 7.0 83.1 3.6  14.1 66.2 0.6 4.7 86.3  
 2014 0.8 7.2 86.6 3.0 11.6 66.2 0.5 5.1 90.5 
 2015 0.7 5.7 86.6 2.3  9.1 66.2 0.4 4.0 90.5  
 2016 0.5 7.7 92.4 1.6 12.8 80.4 0.3 5.5 94.7 
 2017 0.4 6.3 92.4 1.3  9.8 80.5 0.2 4.7 94.7  
 2018 0.3 5.5 93.3 0.9 10.5 85.9 0.2 4.0 94.7 
 2019 0.2 4.0 93.3 0.6  7.2 85.9 0.2 3.1 94.7  
 2020 0.1 2.3 93.3 0.3 3.8 85.9 0.1 1.9 94.7 
 2021 0.0 13.5 99.2 0.0  8.1 96.2 0.0 15.3 99.8  
 2022 0.0 7.3 99.2 0.0 6.4 96.2 0.0 7.6 99.8 
 2023 0.0 4.8 99.4 0.0  4.8 96.2 0.0 0.0 100.0  
 2024 0.0 3.2 99.4 0.0 3.2 96.2 0.0 0.0 100.0  
 2025 0.0 1.6 99.4 0.0  1.6 96.2 0.0 0.0 100.0  
 2026 0.0 0.0 100.0  0.0 0.0 100.0  0.0 0.0 100.0  
a WTO Definition. 
Note: For tariff lines subject to TRQs at the MFN and preferential level, only the out-of-quota duty is 
included in the tariff-related calculations; calculation of MFN averages includes AVEs provided by USA authorities; for preferential tariffs with non- ad valorem  components, only the ad valorem  part 
of the rate was included in the calculation of the tariff averages. Based on the HS 2012 nomenclature.  
Source: WTO Secretariat estimates based on  data provided by the United States. 
2. In the case of Korea, the share of duty-free lines went from 16.2% to 77.8% upon the entry 
into force of the Agreement and the overall tari ff fell to 6.9% from 13.3%. By 2021, following 
ten years of implementation, 98.1% of all tariff line s will be duty free for imports from the United 
States, of which 99.9% for non-agricultural products and 86.7% for agriculture. By the end of implementation in 2031, tariffs on all non-agricultur al products and 98% of agricultural goods will 
be liberalized.  WT/REG311/1 
 
- 47 - 
 
 
 Table A1.2 Korea: Indicators of MFN tariff rates and preferential rates for imports from 
United States 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiabl
e (%) Overall 
(%) On 
dutiabl
e (%) Overall 
(%) On 
dutiabl
e (%) 
MFN 2012 13.3 15.9 16.2 54.6 57.8 5.5 6.6 8.0 17.9 
United 
States 2012 6.9 31.1 77.8 42.1 66.3 36.5 1.2 7.7 84.5 
 2013 5.9 26.6 77.8 37.1 58.9 37.0 0.8 5.3 84.5 
 2014 4.9 35.3 86.2 32.1 54.6 41.2 0.4 6.8 93.5 
 2015 4.2 30.1 86.2 27.5 46.7 41.2 0.4 5.6 93.5 
 2016 3.7 41.5 91.0 24.9 64.0 61.1 0.3 6.7 95.9 
 2017 3.2 36.2 91.1 21.8 56.2 61.3 0.2 5.4 95.9 
 2018 2.8 32.6 91.5 18.7 52.5 64.4 0.2 4.2 95.9 
 2019 2.3 27.2 91.5 15.8 44.3 64.4 0.1 2.9 95.9 
 2020 1.9 21.9 91.5 12.9 36.2 64.5 0.1 1.6 95.9 
 2021 1.4 72.7 98.1 10.0 74.8 86.7 0.0 12.4 99.9 
 2022 1.2 61.0 98.1 8.4 62.8 86.7 0.0 8.7 99.9 
 2023 0.9 63.4 98.5 6.8 64.3 89.5 0.0 11.0 100.0 
 2024 0.8 50.2 98.5 5.4 51.0 89.5 0.0 7.3 100.0 
 2025 0.6 37.1 98.5 3.9 37.6 89.5 0.0 3.7 100.0 
 2026 0.4 95.0 99.6 2.6 95.0 97.3 0.0 0.0 100.0 
 2027 0.3 94.9 99.6 2.4 94.9 97.4 0.0 0.0 100.0 
 2028 0.3 93.9 99.6 2.4 93.9 97.5 0.0 0.0 100.0 
 2029 0.3 105.5 99.7 2.3 105.5 97.8 0.0 0.0 100.0 
 2030 0.3 105.4 99.7 2.3 105.4 97.8 0.0 0.0 100.0 
 2031 0.3 111.4 99.7 2.3 111.4 98.0 0.0 0.0 100.0 
a WTO Definition. 
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related 
calculations; for the calculation of averag es, specific duties are excluded and the ad valorem  parts of 
alternate rates are included. Based on the HS 2012 nomenclature. 
Source: WTO Secretariat estimates based on data provided by Korea.  
3. Table A1.3 shows market access opportunities for Korea's top 25 exported goods in the 
United States. These exports accounted for 52.3% of Korea's global exports during 2009-2011 and 
involved 103 tariff lines. Of these lines, 45 we re already duty-free on a MFN basis and 28 were 
liberalized when the Agreement entered into forc e. The remaining lines are liberalized by 2021. 
Table A1.3 United States: Market access o pportunities under the agreement for Korea's 
top 25 exports  
Korea's top export products in 2009-2011 Access Conditions to United States' 
import markets 
MFN (2012)  Duty-free Avg. applied rate 
(%) Number 
of tariff 
lines 
2012 
2014 
2016 
2021 HS number and description of the product 
Share in
global exports
(%) 
Duty-free 
Dutiable  
271019 Petroleum oils and oils obtained from bituminous 
minerals (other than crude)  5.9 2.0  11 11    
901380 - other devices, appliances and instruments  5.8 4.2 1 3 3    
870323 -- of a cylinder capacity exceeding 1,500 cc but not 
exceeding 3,000 cc 4.3 2.5  1   1  
890120 -tankers 4.2  0.0 1      
890190 - other vessels for the transport of goods and other 
vessels for the transport of both persons and goods 3.9 0.0 1      
854232 -- memories 3.8  0.0 1      
851712 -- telephones for cellular networks or for other 
wireless networks 3.5 0.0 1      
854231 -- processors and controllers, whether or not 
combined with memories, converters, logic circuits, 3.1 0.0 1      WT/REG311/1 
 
- 48 - 
 
 
 Korea's top export products in 2009-2011 Access Conditions to United States' 
import markets 
MFN (2012)  Duty-free Avg. applied rate 
(%) Number 
of tariff 
lines 
2012 
2014 
2016 
2021 HS number and description of the product 
Share in  
global exports  
(%) 
Duty-free 
Dutiable  
amplifiers, clock and timing circuits, or other circuits  
870899 Other parts and accessories for the motor vehicles of 
87.01-87.05, excluding 8708.91/92/93/94/95. 2.8 0.8 9 4 4    
890590 Light-vessels, fire-floats, floating cranes and other 
vessels the navigability of which is subsidiary to their main function; floating docks 2.2
 0.0 2      
851770 - parts 2.0 0.0 1      
852990 Other parts suitable for use solely/principally with the 
apparatus of headings 85.25 to 85.28., other than aerials & aerial reflectors of all kinds 1.6
 2.3 9 22 1 20 1   
847330 - parts and accessories of the machines of heading 
84.71 1.3 0.0 4      
870332 -- of a cylinder capacity exceeding 1,500 cc but not 
exceeding 2,500 cc 0.9 2.5  1   1   
870322 -- of a cylinder capacity exceeding 1,000 cc but not 
exceeding 1,500 cc 0.8 2.5  1   1  
291736 -- terephthalic acid and its salts 0.8  6.5  1    1  
271012 -- light oils and preparations 0.7 1.6  5 5    
271020 - petroleum oils and oils obtained from bituminous 
minerals (other than crude)  0.7 0.2  4 4    
854140 - photosensitive semiconductor devices, including 
photovoltaic cells  0.6 0.0 5      
853400 Printed circuits. 0.6  0.0 1      
870324 -- of a cylinder capacity exceeding 3,000 cc  0.6 2.5  1   1  
842952 -- machinery with a 360? revolving superstructure  0.6 0.0 2      
390330 - acrylonitrile-butadiene-styrene (abs) copolymers  0.5 6.5  1    1 
843149 Parts suitable for use solely/principally with the 
machinery of 84.26/84.29/84.30 (excl. of 8431.41-8431.43) 0.5
 0.0 2      
847989 Other machines and mechanical appliances  0.5 1.2 4 3   2 1 
Total of above  52.3  45 58 28 20 7  3 
Note: Based on HS 2012 nomenclature. 
Source: WTO estimates based on data provided by the United States and UNSD, Comtrade database.  
5.42.  Table A1.4 shows market access opportuni ties for the United States' top 25 exports in 
Korea, which during 2009-2011 accounted for 23.4 % of  its global exports. These exports involved 
222 tariff lines, of which  83 were already duty-free on a MFN basis. Five lines (from HS 
Chapter 12) will remain subject to duties once the Agreement is fully implemented.  
Table A1.4 Korea: Market access opportuniti es under the agreement for United States' 
top 25 exports  
United States' top export products in 2009-2011  Access Conditions to Korea's import markets 
MFN (2012)  Duty-free in  
Remain Dutiable HS number and description o f the product  Share 
in 
global 
exports 
(%) Averag
e MFN 
applied 
rate 
(%) No. of 
tariff 
lines  Duty-free 
Dutiable 
2012 
2014 
2016 
2018 
2021 
271020 - petroleum oils and oils obtained from 
bituminous minerals (other than crude)  2.4 6.2 2 45 38 2 4  1  
271019 -- othe r 1.7  6.3  41 34 2 4  1   
300490 - othe r 1.5 8.0  7 4 3     
870323 -- of a cylinder capacity exceeding 1,500 
cc but not exceeding 3,000 cc 1.4 8.0  4   4    
710812 -- other unwrought forms 1.3 3.0  2 2      
854231 -- processors and controllers, whether or 
not combined with memories, converters, logic circuits, amplifiers, 
clock and timing circuits, or other circuits 1.3
 0.0 3        WT/REG311/1 
 
- 49 - 
 
 
 United States' top export products in 2009-2011  Access Conditions to Korea's import markets 
MFN (2012)  Duty-free in  
Remain Dutiable HS number and description o f the product  Share 
in 
global 
exports 
(%) Averag
e MFN 
applied 
rate 
(%) No. of 
tariff 
lines  Duty-free 
Dutiable 
2012 
2014 
2016 
2018 
2021 
870324 -- of a cylinder capacity exceeding 3,000 
cc 1.1 8.0  4   4    
710239 -- othe r 1.1  5.0  1 1      
847330 - parts and accessories of the machines 
of heading 84.71 1.0 0.0 11        
851762 -- machines for the reception, conversion 
and transmission or regeneration of 
voice, images or other data, including 
switching and routing apparatus 0.9 0.0 35        
100590 - othe r 0.9 428.7   3 1   2   
270112 -- bituminous coal  0.8 0.0 4        
901890 - other instruments and appliances 0.8 8.0  9 3 4   2  
854239 -- othe r 0.7  0.0 3        
120110 - seed 0.7 487.0   2      2 
120190 - othe r 0.7  487.0   4 1     3  
870899 -- othe r 0.7 8.0  6 6      
271012 -- light oils and preparations 0.6  2.7 2 4 4      
870829 -- othe r 0.6 8.0  1 1      
300210 - antisera, other blood fractions and 
immunological products 0.6 0.7 9 1  1     
843143 -- parts for boring or sinking machinery 
of subheading 8430.41 or 8430.49 0.6 0.0 1        
720449 -- othe r 0.5  0.0 1        
870431 -- g.v.w. not exceeding 5 tonnes 0.5 10.0  5 5      
854232 -- memories 0.5  0.0 6        
520100 Cotton, not carded or combed. 0.5 0.0 6        
Total of above 23.4   83 139 100 12 16 2 4  5 
Note: Based on HS 2012 nomenclature. 
Source: WTO estimates based on data provid ed by Korea and UNSD, Comtrade database.WT/REG311/1 
 
- 50 - 
 
 ANNEX 2 
TARIFF RATE QUOTAS UNDER THE AGREEMENT  
Table A2.1 United States tariff-rate quotas  in favour of Korean suppliers under the 
Agreement, agricultural products 
HS tariff line code (description) Base rate  
(average) Duty-free in-
quota quantity 
(MT) In-
quota 
duty Date  
duty-
free 
Milk and milk products  
04022950, 04029990, 04031050, 04039095, 04041015, 
04049050, 04052070, 15179060, 17049058, 18062082, 18062083, 18063270, 18063280, 18069008, 18069010, 19011040, 19011085, 19012015, 19012050, 19019043, 
19019047, 21050040, 21069009, 21069066, 
21069087,22029028   
10.8% 300 MT increasing 
to 380 MT over 9 
years 0 2021  
Note: for the calculation of averages, specific duties ar e excluded and the ad valorem parts of alternate rates 
are included. 
Source: WTO estimates, based on Annex 2-B of the Agreement (Tariff Schedule of the United States). 
Table A2.2 Korean tariff-rate quotas in fa vour of US suppliers under the Agreement, 
agricultural products 
HS tariff line code (description) Base rate  
(average) Duty-free in-quota quantity In-
quota 
duty Date  
duty-free 
Flatfish 
0303390000   
10.0 % 1,530 MT increasing to 3,303 
over 11 years 0 2023  
Alaska pollock 
0303791000  
30% 4,000 MT increasing to 12,263 
MT over 14 years 0 2026 
Croaker 
0303799095  
63% 1,000 MT increasing to 1,629 
MT over 11 years 0 2023  
Milk, cream, cream powder  
0402101010, 0402101090, 0402109000, 
0403901000, 0402211000, 0402219000, 
0402290000, 0402911000, 0402919000, 
0402991000, 0402999000  
136.5% 5,000 MT increasing to 5,628 
over 5 years. Thereafter the 
in-quota quantity increases 3% 
per year, compounded 
annually. 0 Remains 
subject to 
duty 
Food Whey 
0404101010, 0404101090, 0404102110, 0404102120, 0404102130, 0404102190, 0404102900  
49.5% 3,000 MT increasing to 3,800 
over 9 years 0 2021  
Butter and other fats and oils derived from 
milk 
0405100000, 0405900000  
89% 200 MT increasing to 253 MT 
over 9 years 0 2021 
Fresh, curd grated or powdered, processed, 
and all other cheeses 
0406101000, 0406200000, 0406300000, and 
0406900000 (0406900000 includes cheddar cheese). Beginning in year 10, cheddar cheese will no longer be subject to a TRQ.  
 
36% 7,000 MT increasing to 10,280 
MT in year 14 0 2026  
Honey 
0409000000  
1,864/㎏ 200 MT increasing to 225 MT 
over 5 years 0 Remains 
subject to 
duty 
Potatoes fresh or chilled (excludes chipping 
potatoes, excludes seed) 
0701900000  
 304% 3,000 MT increasing to 3,377 
MT over 5 years. Thereafter 
the in-quota quantity increases 
3% per year, compounded annually. 0 Remains 
subject to 
duty 
Oranges 
0805100000  
50% 2,500 MT increasing to 2,814 
MT over 5 years. Thereafter 
the in-quota quantity increases 
3% per year, compounded 
annually. 0 Remains 
subject to 
duty 
Barley, except malting barley and cereals of 
barley 
1003009010, 1003009020  
311.9% 2,500 MT increasing to 3,234 
MT over 14 years 0 2026  
Malt and malting barley 
1107100000, 1003001000  
391% 9,000 MT increasing to 11,643 
MT over 14 years 0 2026 
Maize (corn) starch 
1108120000  
226% 10,000 MT increasing to 
14,685 MT over 14 years 0 2026  WT/REG311/1 
 
- 51 - 
 
 HS tariff line code (description) Base rate  
(average) Duty-free in-quota quantity In-
quota 
duty Date  
duty-free 
Soybeans for human consumption, identity 
preserved 
1201009000  
487% 10,000 MT increasing to 
26,523 MT over 5 years. 
Thereafter the in-quota 
quantity increases 3% per 
year, compounded annually. 0 Remains 
subject to 
duty 
Ginseng, raw, white (major and minor roots 
and tail) 1211201100, 1211201210, 1211201220, 1211201240  
228.8% 5.7 MT increasing to 9.1 MT 
over 17 years 0 2029  
Fodder, other 
1214909090  
100.5% 200,000 MT per year for 14 
years 0 2026 
Prepared dry milk and other 
1901101010, 1901101090  
38% 700 MT increasing to 887 MT 
over 9 years 0 2021  
Supplementary feeds, animal 
2309902010, 2309902020, 2309902099, 
2309909000  
50.6% 5,500 MT increasing to 7,392 
MT over 11 years 0 2023 
Dextrins 
3505104000, 3505105000  
385.7% 14,000 MT increasing to 
18,815 MT over 11 years 0 2023  
Note: for the calculation of averages, specific duties ar e excluded and the ad valorem parts of alternate rates 
are included. 
Source: WTO estimates, based on Annex 2-B of  the Agreement (Tariff Schedule of Korea). 
AGRICULTURAL SAFEGUARD MEASURES UNDER THE AGREEMENT 
Table A2.3 Agricultural Safeguard Measures a pplied by Korea to imports from the United 
States  
Product Years 
applied Trigger Level  
Range (MT) Duty Range 
(%) Intermediate 
Trigger 
Beef 
0201.10.0000, 0201.20.0000, 0201.30.0000, 0202.10.0000, 0202.20.0000, 0202.30.0000  
15  
270,000 – 354,000  
24 - 40  
no 
Pork 
0203.19.1000, 0203.19.9000  
10  
8,250 – 13,938  
11.3 – 22.5  
no 
Onions 0703.10.1000, 0712.20.0000  
18  
2,904 – 5,808  
101 - 135  
no 
Garlic 
0703.20.1000, 0703.20.9000, 0711.90.1000, 0712.90.1000  
18  
1,148 – 2,297  
270 - 360  
no 
Peppers 
0709.60.1000, 0709.60.900, 0711.90.5091, 0904.20.1000, 
0904.20.2000  
18  
827 – 1,655  
203 - 270  
no 
Beans 
0713.31.9000 
0713.32.9000  
15 
15  
238 – 714 
238 - 714  
207 – 595 
143 - 412  
first 4 years 
first 4 years 
Sweet potatoes 
07014.20.1000, 0714.20.2000, 0714.20.3000, 0714.20.9000  
10  
212 - 530  
196 - 373  
first 4 years 
Roots and tubers nesoi 
0714.90.9090  
10  
30  
196 - 373  
no 
Apples 0808.10.0000  
23a  
9,000 – 20,429  
22.5 - 45  
no 
Green tea 
0902.10.0000, 0902.20.0000  
18  
8.3 – 16.6  
385 – 513.6  
no 
Ginger 0910.10.0000  
18  
573 – 1,147  
283 – 377.3  
no 
Malt and malting barley 
1003.00.1000 
1107.10.0000  
15 
15  
9,000 – 11,875 
9,000 – 11,875  
174 – 502 
91.5 - 263  
no 
Barley 1003.00.9010 1003.00.9020  
15 15  
2,500 – 3,299 2,500 – 3,299  
110 – 317 102 - 293  
no  
Popcorn 
1005.90.2000  
7  
5,112 – 11,246  
321 - 601  
first 4 years 
Maize (other) 1005.90.9000  
7  
187,547 – 412,603  
167 - 313  
first 4 years 
Buckwheat 
1008.10.0000 
1008.90.0000  
15 
15  
250 – 750 
250 - 750  
87.1 – 251 
272 - 783  
first 4 years 
first 4 years 
Cereal, groats, worked grains 1102.90.9000, 1103.20.9000, 1104.19.9000,  
15  
128 - 299  
272 - 783  
first 4 years WT/REG311/1 
 
- 52 - 
 
 Product Years 
applied Trigger Level  
Range (MT) Duty Range 
(%) Intermediate 
Trigger 
1104.29.1000, 1104.29.9000  
Flour, meal, powder, flakes , granules and pellets of 
potatoes 
1105.10.0000, 1105.20.0000  
10  
5,000 – 6,524  
155 - 294  
no 
Maize starch 
1108.12.0000  
15  
10,000 – 15,126  
76.8 - 221  
no 
Potato starch 
1108.13.0000  
15  
239 - 717  
155 - 445  
no 
Manioc starch 
1108.14.0000  
15  
433 – 1,299  
155 - 445  
no 
Sweet potato starch 
1108.19.1000  
15  
202 - 606  
82 - 236  
no 
Other starch 1108.19.9000  
15  
53 - 159  
272 - 783  
no 
Ground nuts 
1202.10.0000, 1202.20.0000  
18  
140 - 281  
173 – 230.5  
no 
Sesame seeds 1207.40.0000  
18  
3,561 – 7,121  
473 - 630  
no 
Ginseng 
1211.20.1100, 1211.20.1210, 1211.20.1220, 1211.20.1240 
1211.20.1310, 1211.20.1320, 1211.20.1330, 
1211.20.2210, 1211.20.2220, 1211.20.2290, 
1211.20.9100, 1211.20.9200, 1211.20.9900, 
1302.19.1210, 1302.19.1220, 1302.19.1290  
20 
20 
18  
62 – 103 
62 – 103 
62 - 103  
167 – 222.8 
566 – 754.3 
566 – 754.3  
no 
no 
no 
 
Sesame seed oil 1515.50.0000  
18  
30 - 61  
473 - 630  
no 
Suga r 
1701.91.0000, 1701.99.0000  
20  
833 – 1,461  
37.5 - 50  
no 
Alcohol 2207.10.9010  
15  
236 - 708  
91.8 - 264  
first 4 years 
Dextrins 
3505.10.4000, 3505.10.5000  
12  
14,000 – 19,379  
131 - 375  
no 
a In years 11-23, the safeguard duty ma y only be applied to Fuji apples. 
Source: Free Trade Agreement between the United States and Korea. 
 
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