WORLD TRADE  
ORGANIZATION  WT/REG210/M/1 
28 September 2009 
 (09-4534) 
Committee on Regional Trade Agreements 
Fifty-fourth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN THE  
REPUBLIC OF KOREA AND SINGAPORE, GOODS AND SERVICES 
 
Note on the Meeting of 15 September 2009  
 
Chairman: Mr D. Brauns (Germany) 
  
1. The meeting was convened in document  WTO/AIR/3410, dated 7 August 2009. 
2. Under Agenda Item B.III of its 54
th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) took up consider ation of the Free Trade Agreement between the 
Republic of Korea and Singapore (hereinafter  'the Agreement'), goods and services.  
3. The Chairman  noted that the Agreement had entere d into force on 2 March 2006 and had 
been notified by the Parties to the WTO on 21 September 2006 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the Interpre tation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade agreement (document WT/REG210/N/1) and under GATS Article 
V:7(a) as an Agreement providing for the liberaliz ation of trade in services  within the meaning of 
GATS Article V (document S/C/N/363).  The text of the Agreement was available, together with its 
Annexes, on the Parties' official websites.  Th e Factual Presentation on the goods and services aspects 
(document WT/REG210/3, dated 30 J une 2009) had been prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671).  In addition, 
written questions and replies on the Agreement were  recently distributed in document WT/REG210/4, 
dated 7 September 2009.   He proposed to organize th e consideration of the Agreement by asking first 
the Parties and then other Members to give any general comments.  The Committee would then turn 
to the specifics of the Agreement using the Factual Presentation to guide the debate.  He proposed to 
go through the Factual Presentation by section, and then through the questions and replies document.  
4. The representative of Korea
 expressed thanks for the opportunity to discuss the Agreement at 
the Committee and to the WTO Secretariat for ha ving prepared the Factual Presentation, which 
provided a comprehensive and informative overvie w of the Agreement.  She also thanked the 
Singaporean delegation for its close cooperation and assistance in having prepared for the meeting.  
The Agreement had been signed in August 2005 a nd had entered into force in March 2006.  The 
effects of the Agreement over the three years since its  entry into force had been more positive than the 
Parties had expected.  It had generated econom ic opportunities for businesses, service providers, 
investors, and consumers in the Parties.  In additio n to a rapid expansion of bilateral trade in goods 
which had almost doubled over the three years, bilateral trade in services had increased 80% and 
investment had also been boosted with Korea’s direct investment flows into Singapore having 
increased by over 500% since 2005.  Such developmen ts could mainly be attributed to increases in 
investment in services, such as financial and insura nce services.  Korea believed that the Agreement 
was not only comprehensive in scope but also had su bstantially liberalized trade in goods and services 
in compliance with GATT Article XXIV and GATS Artic le V, respectively.  The Agreement covered WT/REG210/M/1 
Page 2  
 
  trade in goods and services, investment, intell ectual property right, government procurement, 
competition, and cooperation in various areas.  For trade in goods, the Agreement had eliminated 
customs duties on almost all trad eable products.  For industrial goods  which accounted for 99.6% of 
trade by value between the Parties, Korea had agre ed to eliminate customs duties on 97.4% of tariff 
lines over a maximum period of ten years after the entr y into force of the Agre ement.  The Agreement 
had also addressed a variety of non-tariff barriers that might have restricted or distorted trade flows.  
For example, it had established a framework for the mutual recognition of conformity assessment results and in 2007, a mutual recognition agreemen t on electrical and electronic equipment had been 
concluded.  For trade in services, the Agreement had liberalized a wide range of sectors including 
financial, transportation, educational and professi onal services.  A negative list approach which had 
been adopted for services, whereby all sectors had been subject to commitments except those were 
included in a list of reservations, had assisted the Parties in achieving substantial GATS-plus 
outcomes.   
5. Korea had made additional commitments exceeding those under the GATS in sub-sectors 
such as veterinary services, research and developmen t services, courier services, educational services 
and insurance services.  She emphasized the importan ce of the investment chapter, a key pillar of the 
Agreement that provided new opportunities to businesses  and investors of the Parties.  Despite the 
growing demand for investment, there had been no b ilateral investment treaty between the Parties 
before the Agreement.  Consequently, the Agreem ent was significant in that it had established an 
institutional arrangement for the protection and liber alization of investment.  By strengthening the 
protection of investment and provi ding indiscriminate access to investors, it had helped to create a 
favourable environment for stimula ting bilateral investment flows between the Parties.  She believed 
it only had expanded the volume of trade between the Parties, but had also strengthened the 
foundation for industries by elimin ating non-tariff barriers and improving the business environment.  
She also believed that the promotion of libera lization through regional trade agreements would 
accelerate domestic reform thereby facilitating multilateral trade liberalization. 
6. The representative of Singapore
 was pleased to present the Agreement at the CRTA.  He 
thanked the Secretariat for the Factual Presentati on, Korean colleagues for having worked with 
Singapore, and Members for their questions and in terest in the Agreement.  From Singapore's 
perspective, as newly-industrialized Asian economi es with a strong base in manufacturing, Singapore 
considered Korea to be an ideal trade and investme nt partner, sharing many complementary strengths.  
In 2008, Singapore had been Korea’s seventh largest  trading partner, and Korea had been Singapore’s 
eighth largest trading partner.  Bilateral trade ha d continued to grow, increasing by 21% between 2007 
and 2008, and amounting to S$43 billion.  According to the Ministry of Knowledge Economy in Korea, Singapore was the second largest Asian investor  in Korea after Japan.  Most of Singapore's 
investments were in the infrastructure and real esta te sectors, although new investment interests had 
grown in areas such as food services, info-communi cations technology, hospitality and transport.  
Likewise, Korea was a strong investor in Singapore.   There were currently 921 registered Korean 
companies in Singapore including giants like Samsung and LG Electronics.  Singapore had also witnessed an increased interest from young Korean  companies to explore business opportunities in 
Singapore.   
7. The Agreement was comprehensive, covering trade in goods, services and investment.  
Beyond liberalizing trade and investment, the Agr eement also contained cooperation initiatives in a 
wide range of areas such as broadcasting, environm ent, film and games, human resource development 
and intellectual property rights.  For trade in goods, upon entry into force of the Agreement, Singapore had liberalized its remaining MFN-dutiabl e tariff lines resulting in liberalization of 100% 
of trade and tariff lines.  As a result of the Agreem ent, 80.8% of Singapore's exports currently entered 
Korea duty-free, which was expected to rise to 90.8% by the end of implementation in 2016.  For 
trade in services, the Agreement was based on a ne gative-list approach with the exception of the 
financial services sector.  Investment also fo llowed a negative-list a pproach entitling national  WT/REG210/M/1 
 Page 3 
 
 
  treatment and prohibiting performance requireme nts and restrictions on boards and senior 
management for investors in all sectors of the ot her country except for those explicitly listed.  The 
Agreement provided for a robust review system for fu rther improvements to the Agreement.  The first 
review had been held in January 2009 to discuss fu rther liberalization with the next review due in 
2010.  He noted that the Agreement continued to play  an important role in encouraging further trade 
liberalization between the Parties and in strengt hening the important bila teral economic framework 
upon which the Parties could depend on to furthe r strengthen economic ties and to establish a more 
conducive environment for businesses. 
8. The representative of the United States  thanked the Parties as well as the Secretariat for the 
information provided on the Agreement.  She appreciat ed in particular the Annex in the Questions and 
Replies document listing the products not subject to  concessions under the Agreement at the national 
tariff line level as this was the level of transparen cy intended by the Transp arency Mechanism.  She 
expressed disappointment in Korea's commitment to eliminate 68.3% of tariffs for its agricultural 
products under the Agreement.  Also some of th e MFN tariffs that remained under the Agreement 
were very high.  Table A.3 of the Factual Presentati on, appeared to show that 35% of the tariff lines 
comprising Singapore's top 25 exports to Korea re mained dutiable under the Agreement.  She asked 
how the exclusion of such priority items was cons istent with the spirit of the so-called free trade 
agreement (FTA).   
9. The representative of Korea  noted that it was very important to look at an FTA from the 
perspective of liberalizing 'substantially all the tr ade' as in GATT Article XXIV.  He recalled that a 
concrete definition of 'substantially all the trade' did not yet exist in the WTO yet.  While it would be 
ideal to liberalize 100% or close to 100% of trade ma ny times the reality did not allow it.  For Korea, 
the difficulties had arisen in sensitive products.  Kore a's concessions in agricultural products under the 
Agreement was less than full, while in industrial products some  of Singapore's priority items, 
basically petroleum products, were excluded.  He said that when it was impossible to completely 
eliminate tariffs across all product lines, it was a polic y judgment whether to fail in the negotiations or 
conclude them by granting an exception to the sens itive items.  With regard to the Agreement with 
Singapore, Korea had believed that the latter option w as better in terms of accelerating Korea's current 
and future market opening.  This would have also helped Korea to integrate more deeply into the 
multilateral trade regime.  Such deficiencies in agri cultural and petroleum products, he believed did 
not make the Agreement inconsistent with GATT Ar ticle XXIV, as overall it maintained a very high 
level of liberalization across goods, services, investme nt, intellectual property rights, and government 
procurement.   
10. The representative of the European Communities (EC)  thanked the Parties for their 
presentations and for the answers provided.  Footno te 4 of the Factual Presentation referred to a 
discrepancy in the trade data reported by the Par ties to UNSD Comtrade due to the use of different 
accounting methods;  she noted that while the data on Korea's exports to Singapore did not differ 
significantly, the data for Singapore's exports to Korea did.  She asked the Parties to explain the origin 
of this discrepancy and how this could be addressed when the need to use the data arose in practice, 
for example when discussing compensation for safe guard measures as discussed in paragraph 49 of 
the Factual Presentation.  She asked if the Parties ha d taken steps to further harmonize their statistical 
methods.  The representative of Singapore  informed the EC that the answ ers to the questions would be 
provided in writing. 
11. The representative of the United States  asked the Parties whether it was accurate 
characterization of Article 10.12 of the Agreem ent to state, as in  paragraph 74 of the 
Factual Presentation, that a Party was encouraged to take safeguard measures.  She then asked the 
Parties if, as stated in paragraph 80 of the Factual Pr esentation, they had entered into or concluded any 
negotiations on deeper liberalization in trade in ser vices and investment, pursuant to Articles 9.8.1 or 
10.10.2 of the Agreement.  Finally paragraph 83 of the Factual Presentation noted that under the WT/REG210/M/1 
Page 4  
 
  Agreement, Singapore restricted foreign owners hip in facilities-based basic telecommunications 
services to the limit of 49%, whereas its GATS' sch edule permitted it up to 73.99%.  She asked the 
Parties to confirm if it was Singapore's intention to liberalize less under the Agreement than in its 
GATS' schedule in these services.  The representative of Korea
 provided a provisional response, 
which could be overridden by a more detailed, wr itten response, in case of any discrepancies.  He 
believed that under Article 10.12 of  the Agreement the Parties could adopt safeguard measures in 
exceptional cases but was not intended to encourage the Parties to take safeguard measures.  He 
informed the Committee that the Parties had not ente red into negotiations for further liberalization in 
trade in services and investment yet, but they had planned to do so in the coming years, possibly 
starting in 2010.  On the last ques tion, the representative of Singapore  said a written response would 
be provided at a later stage.  
12. The representative of Japan  commented that while Table V.2 of the Factual Presentation 
referred to the date of entry into force of th e ASEAN-Japan agreement as 1 January 2009, it had 
entered into force on 1 December 2008 for Japan.  In addition not all the ASEAN member states had 
ratified this agreement, so the note applying to  the Korea-ASEAN agreement that it had not yet 
entered into force for all members states of  ASEAN should also apply to the ASEAN-Japan 
agreement.  She informed the Co mmittee that the ASEAN-Japan agre ement was ready to be notified 
to the WTO.   
13. The Chairman  noted that the consideration of the go ods and services aspects of the Free Trade 
Agreement between the Republic of Korea and Si ngapore had allowed the Committee to clarify a 
number of questions and oral discussion of the Ag reement could be concluded in accordance with 
paragraph 11 of the Transparency Mechanism.  If any delegations wished to ask follow-up questions 
they were invited to forward submissions in writing to the Secretariat by 22 September 2009  and the 
Parties were asked to submit replies  in writing by no later than 6 Oc tober 2009.  In accordance with 
paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available 
on the WTO website. 
14. The Committee took note  of the comments made. 
__________