WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/204/Add.1 
8 December 2008 
 (08-5988) 
Trade Policy Review Body 
8 and 10 October 2008 Original: English/Spanish 
 anglais/espagnol 
 inglés/español 
 
TRADE POLICY REVIEW 
REPUBLIC OF KOREA 
Minutes of Meeting  
Addendum  
Chairperson:  H.E. Mr. Yonov Frederick Agah  (Nigeria) 
 This document contains the advance written qu estions, and replies provided by the Republic 
of Korea.1 
 __________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
8 et 10 octobre 2008  
EXAMEN DES POLITIQUES COMMERCIALES 
RÉPUBLIQUE DE CORÉE 
Compte rendu de la réunion
 
Addendum  
Président:  H.E. M. Yonov Frederick Agah (Nigeria) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par la République de Corée.1 
  __________________________________________________________________________________ 
Órgano de Examen de las Políticas Comerciales 
8 y 10 de octubre de 2008  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
REPÚBLICA DE COREA 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Yonov Frederick Agah (Nigeria) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por la República de Corea.1 
  
                                                     
 
 1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/204/Add.1 
 Page 3 
 
 
  WRITTEN QUESTIONS BY MEMBERS 
 CHINA
 
 
1. Paragraph 10 of the Government  Report states that "strong extern al demand, particularly from 
China, has boosted Korea’s exports and contributed to economic recovery, despite appreciation of the 
Korean won."  However, the increase in exports  combined with sluggish domestic demand, has 
exacerbated the problem of imbalances in the domestic economy. Would the Korean Delegation 
please elaborate on this latter point?  
2. In Paragraph 12 of the Government Report, it is stated that the Korean government places 
high priority on growth and job creation, and aims  to increase the potential growth rate through 
continuous domestic reforms. Would the Korean Delegation please elaborate what the reforms that 
have been envisaged?  
3. In Paragraph 26 of the Government Report and re levant parts of the Secretariat Report, it is 
mentioned that the penal provision punishing unfair dismissal was removed in the new legislation on 
industrial relations reform. Would the Korean De legation please explain the reason for this change? 
 4. It is mentioned many times in the Secretaria t Report that the decline of manufacturing in 
Korea’s economy is "possibly" due  to increased competition from Ch ina. Does Korea’s own analysis 
come to the same conclusion? 
 5. It is noted in several places in the Secret ariat Report that three sectors remain completely 
closed to foreign investment and 26 are partially restricted. Would the Korean Delegation please elaborate on this and explain the reason 
 
6. It is mentioned in several places in the Secr etariat Report that the low level and decline of 
inward FDI are partly due to unduly burdensome regulation. Would the Korean Delegation please 
comment on this observation.  7. It is mentioned in many places in the Secret ariat Report that customs tariff remains relatively 
complex which poses obstacles to economic efficiencies. In view of this, is Korea considering 
streamlining its tariff structure?  8. In Paragraph 13 on Page ix of the Secretariat Report, it is stated that "sunset clauses were to 
terminate tax incentives automatically at the end of 2003, but many extended". It would be 
appreciated if the Korean Delegation could expl ain the reason behind this delay and extension? 
 
CHINA – SECOND SET
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 
Contingency measures 
 
1. Paragraph 72 Chapter IV   
The Secretariat Report states ：The decision on the imposition of  anti-dumping and countervailing 
duties is taken by the Ministry of Strategy and Finance  (MOSF). WT/TPR/M/204/Add.1 
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   a. How does MOSF make a decision on the imposition of anti-dumping and 
countervailing duties? What’s the procedure? 
 b. Is there any case where MOSF makes a determination different from KTC’s 
suggestion? 
 
2. Paragraph 73 Chapter IV  
The Secretariat Report states ：An early 2008 amendment stipulated that the review process of 
anti-dumping duties is to be conducted identically  to the original investigation process; the 
methodology of calculation of the dumping margin was changed. 
 
 a. Are there any other amendments in the "early 2008 amendment"?  b. What is the change on the calculation method of the dumping margin? How does 
KTC calculate the dumping margin of t hose exporters that don’t respond to the 
investigation? 
 
Standards and other technical requirements  
 
3. Korea requires that all imported agricultural pr oducts be subject to annual test of animal drug 
and pesticide residues at the site of processing. E ach importer shall pay a testing fee of up to US$500. 
While for domestic products, the test is  conducted in random and free of charge. 
 Would Korea please explain the rationale for this diff erent treatment and how it is in consistency with 
Korea’s national treatment obligation under the WTO? 
 
Government procurement 
 
4. Would Korea please provide the information re garding Korea’s government procurement data 
in the past 4 years? 
 
IV. TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE  
 
5. Would Korea please provide information c oncerning price support for major agricultural 
products in Korea? 
 
6. Please provide information c oncerning government financing for rural area and farmers. 
 
(6) S ERVICES  
 
Insurance 
 
7. Paragraph 96 Chapter IV  The report described the situation of bancassuranc e in Korea. Would Korea please explain whether 
subsidiaries of foreign-funded banks and branch es of foreign banks are allowed to conduct 
bancassurance business in Korea? 
  WT/TPR/M/204/Add.1 
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  Transport  
 
8. Paragraph 125 Chapter IV  The report noted that "The main barrier to entry to  passenger transport is an ‘economic needs’ test, 
while bus and taxi fares are regulated by local governments based on costs." Would Korea please 
explain the rationale for this ENT, and how it is implemented?  
Accounting and auditing services 
 
9. Would Korea please provide information on th e mutual recognition of qualifications between 
Korea and other countries/regions on ac counting/auditing services, if any? 
 
SWITZERLAND
 
 
Report by the Secretariat  
I. ECONOMIC
 ENVIRONMENT 
(3) M ACROECONOMIC POLICIES  
(i) Monetary and exchange rate policy 
(a) Monetary policy 
 
In para. 8,  the Secretariat’s report  indicates that the Bank of Korea in consultation with the 
Government changed the target indicator for its  inflation-targeting policy, i.e. changed in 
January 2007 from core inflation to headline CPI.  Could the Korean authorities explain why this 
change was made ? Indeed, it would seem that h eadline CPI tends to fluctuate more than core 
inflation and makes it more difficult to determine changes in the inflation trends. 
 
II. TRADE  POLICY  REGIME:  FRAMEWORK  AND  OBJECTIVES 
(6)  T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements (d) Korea-United States  (KORUS) FTA  
 
In para. 40,  the report states that the Korea-United States  (KORUS) Free trade agreement, which was 
signed in June 2007, is to be ratified by the Korean  National Assembly in 2008. Could Korea further 
precise, if already known, when in 2008 it is e xpected that the National Assembly will ratify the 
KORUS FTA ?  
III. TRADE
 POLICIES  AND  PRACTICES  BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs valuation 
 
In para. 24, the Secretariat’s report indicates that , the Korea Customs Service uses the depreciated 
value to value imported used cars. Could Korea specify how it calculates the depreciated value? 
 
 (iii) Tariffs 
 
In para 28, the Secretariat’s report indicates that , the 2008 tariff contains 26 tariff lines more than the 
2007 schedule. Could Korea explain why this is the case and provide the tariff lines as well as the 
product description of these 26 additional tariff lines?  WT/TPR/M/204/Add.1 
Page 6  
 
  In para. 31, the Secretariat’s report indicates that , the tariff of Korea remains relatively complex, 
involving a multiplicity of rates often involving sma ll rate differences and deci mal points. In addition, 
Korea has also some 124 different rate bands. Does Korea foresee to rationalize its tariff, by reducing 
the number of bands and removing decimal duties?  (c) "Flexible" tariffs  
In para. 36, the Secretariat’s report indicates that, th anks to the flexible ta riffs mechanism Korea can 
increase or decrease certain tariffs at its discretion.  Although the flexible tariffs vary inside the bound 
rates it can encourage or discourage imports because the differential can be as much as 40% above or 
below a fixed tariff rate. Could Korea indicate how often and for which reason it increases or decreases the flexible tariffs and which are the products concerned  (HS number and product 
description)? Until the DDA is concluded, does Kor ea intend to improve the predictability of its 
tariffs and reduce them? Could Korea specify what th e customs service plans to  do to standardize the 
flexible tariffs  (see footnote 26 )? 
 
Adjustment duties   (para. 38-39)  
Special safeguard and safeguard tariffs   (para. 40-41) 
 Could Korea specify what is the difference betw een the adjustment duties and special safeguard 
duties? 
 
(viii) Contingency measures 
 
In para. 73, the Secretariat’s report indicates that, following an early 2008 amendment to the Korean 
legislation on contingent protection, the calcu lation method of the dumping margin was changed. 
Could the Korean authorities elaborate in the changes that took place in this respect ? 
 
(xi) Standards and other technical requirements 
 (a) Standards, testing and certification WTO enquiry points, notification, and disputes 
 
According to JOB (08)/53 of 26
th June 2008, the Republic of Korea has been challenged on 12 issues 
regarding technical regulations, standards or c onformity assessment procedures. Could you please 
elaborate on the situation  (see para. 99-100)?  (c) Marking and labelling  
Could the Republic of Korea please sket ch out the main elements of the "Regulations concerning 
Origin: Notification of Ministry of Commerce, Industry and Energy 2007-157"   (see para. 107) ? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(i) Taxation (a) Indirect taxation 
 In para. 133, the Secretariat’s report suggest that an education tax is levied on banking and insurance 
services. Could the Korean authorities explain why th is education tax is specifically targeting banking 
and insurance services and apparently not other economic activities ? More generally, it seems that 
Korea maintain a large number of different indirect  taxes which make an overall assessment of the tax 
burden difficult. Are the Korean authorities considering a tax reform that would streamline the  WT/TPR/M/204/Add.1 
 Page 7 
 
 
  indirect tax structure and possibly shift the burden of taxation toward a more direct taxation-based 
system which could both broaden the tax base and contribute to reduce the increasing income 
inequality, as mentioned in para. 2 of Chapter I of the report ? 
(ii) Financial assistance 
(a) Loans, guarantees, and other financial measures 
 
In para. 147, the Secretariat’s report indicates th at state-owned entities su ch as the Korea Credit 
Guarantee Fund  (KODIT) and KIISO Technology Fu nd provide credit guarantees to enable emerging 
firms, especially SMEs to gain access to finan ce. The report further indicates that they are 
commercially run and that their operations are conduc ted according to market principles; however, the 
report also suggests that the Government woul d cover any losses. Could the Korean authorities 
indicate through which mechanism the Government can  ensure that the operations of these schemes 
will indeed be conducted according market principl es and will avoid the occurrence of losses ? In 
other words, how can the Korean authorities en sure that moral hazard will not prevail ? 
 
(vi) Intellectual property rights 
(a) Industrial property Trade secrets  
In para. 183 ,  the report by the Secretariat indicates that, confidential data submitted to authorities for 
marketing approval of pharmaceuticals and agricu ltural chemicals are prohibited from public 
disclosure unless the authorities see a public inter est need. According to Paragraph 183, unfair 
commercial use of such data is also prohibited. Please indicate which provisions of your legislation 
address this issue. Does your legislation provide for a specific term of protection for such data before 
the expiration of which test data cannot be relie d upon or referred to by a second applicant for the 
market authorisation of his own product?  BRAZIL
 
 
Document WT/TPR/G/204 
 
Page 5, paragraph 3  
"3. To Korea, the objective of pursuing FTAs is to  manage its bilateral trade relations in a more 
systematic manner and secure better access in trade and investment to foreign markets which may be 
unavailable under the multilateral se tting. Moreover, it is expect ed that FTAs will prompt the 
domestic restructuring of less competitive sectors and thus raise the level of efficiency within the 
economy. In this light, Korea believes that these  FTAs will complement, not replace, efforts for 
multilateral trade liberalization."  Question  What kind of measures are being taken concerning the restructuring of less competitive agricultural 
sectors ? Could you please give some examples of agricultural subsectors that have high applied 
tariffs and at the same time are being subject to preferential liberalization under recent FTAs  (please 
specify some timeframes of the liberalization of the examples, if possible) ?   WT/TPR/M/204/Add.1 
Page 8  
 
  Document WT/TPR/S/204 
 
Page 103, paragraphs 44 and 45  "44. Korea's "Energy Vision 2030", launched in November 2006, has three basic directions  
(3 Es):  energy security, energy efficiency and environment-friendly as recommended by the 
International Energy Agency.   Nine tasks are set  for implementation, including expanded potential 
for overseas energy development, establishment of the infrastructure of a hydrogen-based economy, 
improvement in energy consumption efficiency, and a strengthened effort for investment in the energy 
industry overseas.  Korea plans to realize "universal  energy services" across the nation by 2016 so that 
no citizen will be excluded from the systematic expanded energy welfare scheme.  
 45. The Ministry of Knowledge Economy  (MKE, former MOCIE) sets energy policy.  A National Energy Committee, launched under the Ba sic Act on Energy in November 2006, envisages 
meeting a third of Korea's energy consumption from Korean investment in resources overseas , seeks 
to raise the ratio of renewable energy use to 9%  and reduce dependence on petroleum to 35%.   It 
plans to help the county emerge as an exporter of  energy facilities and technology, and convert it into 
a society of low energy consumption by the target year 2030.  As of 2006, Korea's energy self-sufficiency rate for petroleum and gas was 3.2%, re newable energy rate 2.24%, and dependency rate 
on petroleum 43.6% of total energy production."  
Question 
 With regard to reducing dependence on petroleu m and using more environment-friendy energy 
sources, does Korea consider to adopt a policy of ha ving a percentage of ethanol mixed with gasoline 
to fuel vehicles, in light of similar policies adopted by Brazil other developing countries, like 
Thailand? 
 Page 110, paragraph 70  "70. Tariff protection for ships ranges from zer o to 8%.  Between 2002 and 2005, Korea was a 
respondent in a WTO dispute settlement case c oncerning certain measures affecting trade in 
commercial vessels.   A subsidy  (Local Tax Reduc tion for Building and Acqui sition of International 
Line Vessels and Deep Sea Fishing Vessels) aimed at  promoting the shipping industry by relieving 
the tax burden on international line vessels, deep-s ea fishing vessels and coastal line vessels, which 
was to be eliminated at end 2006, will now be extended to end 2009.   Korea is playing an 
increasingly active role as a rule-maker for regulatio ns in the international shipbuilding industry by 
engaging in various conferences and rule-making sessions." 
 Question  Could you please provide some more detailed info rmation on how the "Local Tax Reduction for 
Building and Acquisition of International Line Ve ssels and Deep Sea Fishing Vessels" works as a 
subsidy ? 
  WT/TPR/M/204/Add.1 
 Page 9 
 
 
  BRAZIL – SECOND SET  
 
CHAPTER III – TRADE POLICIES AND PRACTICES BY MEASURE 
 I
NTRODUCTION  
Page 39, paragraph 6 
 The document states that "Although tax incentives were  to terminate automatically at end 2003 in 
accordance with sunset clauses, many were extended." 
 
Question 
 
Could Korea complement information on this issue, explaining the present situation regarding such 
tax incentives?  M
EASURES DIRECTLY AFFECTING IMPORTS  
 (i) Customs procedures 
Page 40, paragraph 11  
Question 
 
The document mentions that qualifie d importers  (approved by Custom s based on their import record) 
receive expedited customs clearance and more conv enient methods for paying duties. Could Korea 
inform what criteria are used to accredit importe rs as well as the requirements imposed for the 
concession of the benefits? 
 
(ix) Standards and other technical requirements 
Page 64, paragraph 100 
 
The document states that "Since April 2004, three Me mbers have raised specific concerns in the SPS 
Committee about measures maintained by Korea.  (72)" and footnote 72 states that "Also in 2007,  
Brazil expressed concerns about Korea's lack of r ecognition of regionalization  (Article 6 of the SPS 
Agreement) with respect to foot-and-mouth disease.  These concerns have apparently not yet been 
resolved." 
 
Comment  Last August, during a Mission of the Brazilian Ministry of Agriculture to Seoul, and in the latest sessions of the SPS Committee, Brazil inquired abou t changes now in course regarding the Korean 
legislation on imports of animal pr oducts, particularly if such legisl ation would include the possibility 
of recognising free foot-and-mouth disease areas, according to the principle of regionalization. 
Regionalization is a principle recognised by the SPS Agreement and by OIE. The non-recognition of 
this principle affects imports of beef and pork fro m Brazil to the Korean market. During the bilateral 
meetings on SPS issues, in Seoul, on August 8th, Korean representatives st ated that such new 
legislation was at an advanced stage of implementation.  
 WT/TPR/M/204/Add.1 
Page 10  
 
  Question 
 
Could the Korean delegation inform the expected da te for the effective entry into force of the new 
legislation on imports of animal products, contemplating the princi ple of regionalization? Is it 
possible, under the legislation today in force in Sout h Korea, to consider specific regions of a foreign 
country as free from foot-and-mouth disease? 
 
M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Competition and consumer policy 
Page 82, paragraph 167 
 The document states that "The KFTC has investig ated alleged international cartels in marine 
transportation and DRAM chips, and currently, is i nvestigating several international cartels including 
one on air fares.  KFTC has signed memoranda  of understanding on competition policy dialogue, 
establishing the basis for a formal dialogue on comp etition law enforcement, with Australia, Canada, 
the EC, Mexico, Romania, the Russian Federation,  and Turkey;  at present Korea is negotiating 
bilateral cooperation agreements w ith the United States and the EC." 
 Question 
 
Could the Korean government explain in furt her detail those agreem ents and cooperation 
experiences? For instance, how are confidential info rmation issues approached? Is there any dispute 
settlement mechanism? Are joint i nvestigations being considered? 
 
CHAPTER IV – TRADE POLICIES BY SECTOR 
 
(2) A
GRICULTURE  
(ii) Policy developments  
Page 92, paragraph 9 
 The document states that "According to the authorities,  Korea's action for coping with the recent rise 
in world food prices will be focused on: promoting the supply of crops; relieving the agri-food 
industry of the burden of price surges in cereals;  and generating substitution crops for imported wheat 
by creating new demand  (e.g. developing processed rice products). The authorities adopted several short-term measures including setting up a task fo rce consisting of public and private sector 
representatives, establishing an early warning syst em on international grain supply and price, 
quantitative export restrictions on rice  (Chapter III),  suspending the autonomous tariff for grains such 
as wheat, corn etc.  (from 1 April to 31 Decem ber 2008), and extending the VAT exemption period 
for the sales volume of feed  (which expires in 2008 ) from late 2008 to late 2011. Mid- and long-term 
measures include: increasing efficiency in land use and self-sufficiency through expanding domestic 
production by utilizing idle farmland in winter; e xpanding the cultivation area for wheat, feed crop, 
and other winter crops from 34,000 to 66,000 hectares by 2012;  plans to extend the volume of tariff-
rate quota items  (soybean, corn, etc.), operated by the Korean Agro-fisher ies Trade Corporation  
(Chapter III);  and promoting Korean investment in agriculture overseas."  Question 
 
How is Korea working on its plan to extend the volume of tariff-rate quota for soybean and other 
agricultural items?   WT/TPR/M/204/Add.1 
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  (6) S ERVICES  
(ii) Overall commitments under the GATS 
Page 110, paragraph 73 
 The document states that "To be able to provide professional services, such as legal, accounting, and 
audit and taxation services, foreign qualifications need to be approved in Korea." 
 Question 
 
Could Korea explain in some detail how such fo reign qualifications are evaluated by Korean 
authorities? The Secretariat’s Report does not men tion the qualification requirements and producers, 
technical standards and license requirements for E ngineering Services and C onstruction and Related 
Engineering Services. Brazil would appreciate information on such requirements."  
UNITED STATES
 
 
WT/TPR/G/204 
Page 12, Paragraph 29 
 
Korea’s Report notes that efforts have been made to  enhance transparency of the regulatory process. 
However, exporters continue to report that furt her improvements can be made in sectors such as 
pharmaceuticals, agricultural biotechnology and whit e goods.  Suggestions for improvements include 
timely disclosure of full information and provision  of a meaningful opportunity to submit comments 
and have those comments reflected in the final re gulations.  How does Korea plan to address these 
suggestions?  WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 
(i) Customs procedures (a) Registration, documentation, and clearance requirements 
Page 40, paragraph 16 
 
While we appreciate Korea's desire to ensure that its imports are not under-valued, the Secretariat’s 
report states that the motivation for the specific pr oducts subject to more rigorous controls were 
chosen to "help protect local farmers and produ cers against increased imports".  Does the ROKG 
concur with the Secretariat’s statement?    
(ii) Customs valuation 
Page 43, paragraph 23 
 
According to the Secretariat’s report, when the transaction value cannot be used to value imports, 
"...valuation is determined using, in order, iden tical goods, similar goods, domestic sales price, or 
computed value." Could Korea clarify the term "dom estic sales price" as it appears in this paragraph 
of the Secretariat’s document?  Does Korea’s legisla tion provide for the application of Article 5 of the 
Customs Valuation Agreement as a method of valuation?  
(viii) Contingency measures 
 
Page 57, paragraph 73 of the Secretariat Report st ates that in 2008, Korea amended its legislation 
whereby its "review of anti-dumping duties is to be conducted identically to the original investigation WT/TPR/M/204/Add.1 
Page 12  
 
  process; the review calculation method of the dumping margin was changed."  Please identify the 
aspects of Korea’s calculation method that changed as a result of the 2008 amendment, and further 
specify how each of the identified changes differs  from Korea’s prior method for calculating dumping 
margins in reviews of antidumping measures.  (ix) Standards and other technical requirements  Food and other non-industrial products 
Page 62, paragraph 91 
 
We appreciate that Korea is taking steps that appe ar aimed at liberalizing regulation of functional 
cosmetics. Please elaborate on what Korea is planning in terms of a system of "self-regulation."  Please elaborate on what type of testing or certif ication may be involved and the standards or 
technical regulations to which functional cosmetics would be tested or certified.  What are the 
objectives of any such standards or technical regula tions  (e.g., quality assurance, safety etc.)?  Will 
all functional cosmetics be subject to this new syst em, and if not all, what criteria will be used to 
determine which functional cosmetic s will be subject to this new system? Will domestic and imported 
functional cosmetics equally be subject or not subject to this new system?  In addition, we understand 
that functional cosmetics that have been self-tes ted and certified by the manufacturer to Korean 
requirements are nonetheless subject to "quality inspec tion" in Korea. What is the purpose of this 
quality inspection if Korea accepts the quality certification and testing performed by the 
manufacturer?  
 
Conformity assessment 
Page 63, paragraph 93 
 
We welcome the steps Korea is taking to promote private certification.  Will foreign bodies  (both 
bodies in the United States and US-invested bodies) al so be allowed to certify products for the Korean 
market?   
(x) Government procurement 
 
Page 63, paragraph 96 describes a "New Excelle nt Product"  (NEP) certification system: "NEP 
certification is provided for products manufactured w ith new technologies developed first in Korea or 
with innovative technologies improved from existing technologies."  
- Does the certification of products "w ith innovative technologies improved from 
existing technologies" require that such technologies be improved in Korea? Would innovative technologies improved outside Korea qualify for certification? 
- Paragraph 96 also states that: "Products certified as NEP receive an additional point 
in procurement by government and public organizations."  If NEP certification is 
provided "for products manufactured with  new technologies developed first in 
Korea," how does Korea implement this provisi on in a manner that is consistent with 
its obligations under the WTO Agreem ent on Government Procurement? 
 
Page 66, paragraph 109 states:  "For GPA-covered entities, contracts subject to Korea's commitments 
represented about 38.4% of tota l GPA-covered procurement in  2004."  Please explain why 
procurement by Korea’s GPA-covered entities only covers 38.4% of Korea’s GPA-covered 
procurement. 
 Page 68, paragraph 115 states that: "Contracts ar e awarded through open competitive tender, unless 
there are reasons . . . for awarding by restricted tender."  What percentage of Korea’s government 
procurement is conducted using ope n tendering procedures  (in which all interested supplies may  WT/TPR/M/204/Add.1 
 Page 13 
 
 
  participate) and what  percentage of  governm ent procurement is conducted using selective tendering 
procedures  (that is, where pre-qualification require ments, as described in paragraph 114, or other 
elements of selective tendering are used)?  Pl ease provide such information for both procurement 
covered by the GPA and for procurement excluded from the GPA.  
- Please describe the differences between "p rivate tendering," "restrictive tendering" 
and "competitive tendering". 
- With regard to the statement that " competitive contracting is generally used for such 
purchases from SMEs," in such cases is the competition limited to SMEs? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(vi) Intellectual property rights 
Page 83, paragraph 171 an d page 84, paragraph 175 
 Please explain the relationship between the followi ng two provisions of la w and the reasoning behind 
the difference in penalties: 
 
"[p]enal provisions for right infringements of patents, utility models, trade marks and industrial designs are: imprisonment of up to sev en years or a fine of up to W 100 million; or 
up to three years or W 20 million for falsely indicating such a right or fraudulently obtaining one." 
 
"[t]hat Unfair Competition Prevention and Trade Secret Protection Law prohibits unfairly tarnishing a well-known mark or causing confus ion by use of similar or identical mark, 
including distributing, importing or exporting such goods.... Penal provisions are up to three 
years imprisonment or a fine of up to W 30 million." 
 
Page 86, paragraph 185 indicates that sui generis  protection is available in Korea for non-original 
databases.  Please indicate under what terms and c onditions such protection is available to non-
original databases created outside Korea by foreign nationals.  Page 87, paragraph 191 indicates that there are concerns about the unauthorized reproduction of 
textbooks on Korean campuses. What is the Korean  Government doing to address the infringement of 
literary works on the campuses of colleges and univers ities?  In particular, please describe the actions 
taken to ensure that guidance from Korea's Mi nistry of Education has been followed and 
implemented.  
Please describe the Korean authorities responsible for enforcing the Copyright Act and the actions 
they undertake.  In particular, please describe an y non-government or private organizations that have 
been delegated such authority, the actions they unde rtake, and the extent to which those activities are 
taken to enforce the rights of foreign right holders.  Page 89, paragraph 198  
The Secretariat has provided several statistics relativ e to criminal actions that took place in 2007.  But 
no statistics are provided to indicate how many convictions resulted from those cases where criminal charges were filed.  Could Korea please provide those statistics?  WT/TPR/M/204/Add.1 
Page 14  
 
  IV. TRADE POLICIES BY SECTOR 
(v) Telecommunications 
Page 119, paragraph 101 
 
The Secretariat’s report notes that, "In 2008, the Mi nistry of Information and Communications  (MIC) 
and the Korea Broadcasting Commission  (KBC) were  merged into the KCC to form a completely 
independent single regulatory entity, under the President 's Office."  In what way is the new regulatory 
entity "completely independent"?  
MALAYSIA
 
 1. What percentage of Korea’s total exports and imports goes to or comes from countries with 
which it has preferential or free-trade agreements? 
 
2. Has the trade volume been increasing since the ASEAN-Korea Trade in Goods Agreement 
went into effect?  (if not, what is the reason behind that?) 
 3. When will Korea ratify the Trade in Serv ices Agreement under the ASEAN-Korea Free Trade 
Area?  NEW ZEALAND
 
 1. Trade policy strategy 
WT/TPR/S/204, p. 20, para. 15 
 
The Secretariat notes that Korea’s trade policy objec tive is to build a free and open economy based on 
market principles.  The review also notes that Korea maintains disproportionately high levels of 
border protection in the form of tariffs.   Could Korea explain how it balances an open market with 
high levels of protection?   
2. WTO notifications 
WT/TPR/S/204, p. 22, Table 11.1 
 
The report indicates that Korea has not supplied an y notification of imports  under tariff rate quotas 
since 2002.  Could Korea advise when it proposes to notify WTO of imports under tariff rate quotas?  3. Tariffs 
WT/TPR/S/204, p. 38, para. 2 
The Secretariat notes that Korea intends to reduce or remove gradually the non- ad valorem  duties and 
the flexible tariffs in line with the outcomes of the DDA.  Given continuing delays to the conclusion 
of the Doha Round, how does Korea propose to undertake this process of reform?  
 4. Tariff quota administration 
WT/TPR/S/204, p. 53, para. 59 
 The Secretariat report  (p. 53, para 58) suggests that  imports may be restricted by the consistently 
large unfilled share of tariff rate quotas and that this  situation may be due to the administration and 
allocation of tariff rate quotas by some 22 organisati ons.  Could Korea explain what efforts it intends 
to take to minimise under-fill of these quotas?  The Secretariat report  (p. 53, para 59) notes that a credible import administration would require that directly interested parties were not directly invo lved in controlling imports.  This is not the case in  WT/TPR/M/204/Add.1 
 Page 15 
 
 
  Korea where state-trading enterprises and producer as sociations still administer tariff rate quotas. New 
Zealand notes that Korea has stated "there is no concern over the influence members might exercise 
with regard to reallocation".  Can Korea provide a dditional details to further support this statement? 
 
5. Contingency measures 
WT/TPR/S/204, p. 57, para 73 
 The Secretariat notes that Korea's legislation on cont ingent protection was amended in respect of the 
method of calculating the dumping margin.  What was the reason for this amendment and what 
change did it make to the way in wh ich the dumping margin is calculated?" 
 
6. Standards 
WT/TPR/S/204 
 The Secretariat report  (p.61, para 87) identifies th e range of agencies responsible for regulating food 
safety and quality, their responsibilities sometimes overl apping.  How does Korea ensure that its SPS 
regulatory environment is consistently applied by the various import agencies? 
 The Secretariat report  (p.65 para 104) notes that an imal and animal products are subject to laboratory 
testing and epidemiological investigations.  New Zealand understands that Korea has made 
amendments to its Livestock Infections Disease Prev ention Act which gives powers of review to the 
legislature.  How does Korea align its SPS measures to the WTO SPS agreement that requires all SPS 
measures to be scientifically justified?  
7. Government procurement 
WT/TPR/S/204, p. 67, para. 112  
The Secretariat reports that 70% of the procuremen t market involves purchases undertaken directly by 
public institutions.  However, according to the Re port by Korea  (para 37), government purchases via 
KONEPS accounted for 52% of total government proc urement.  Could Korea explain why there is a 
difference in these percentages?  8. Taxation 
WT/TPR/S/204, p. 72, para. 130 
 The Report notes that Korea applies a complex indirect tax structure comprising a number of taxes to a range of products.  What plans does Korea have to reform and simplify its complex indirect tax 
structures? 
 
9. Agriculture 
WT/TPR/S/204, p. 91, para. 6 
 New Zealand notes the reference to "…self suffici ency policies aimed at addressing food security 
concerns" suggesting that Korea may hold the view that food security depends mainly on domestic 
production  (p.91, para. 7).  The report notes that dom estic support  (in combination with high border 
tariffs) distorts agricultural production and trade,  and results in Korean consumers paying much 
higher prices for agricultural products  (on average well over double world levels).  Food security can 
also be seen from the perspective that people should be able to buy food at a market-driven price, 
rather than one inflated by market intervention and barriers to trade. What efforts are Korean 
authorities making to ensure that support for fa rmers does not result in market distortions? WT/TPR/M/204/Add.1 
Page 16  
 
  AUSTRALIA
 
 
I. ECONOMIC ENVIRONMENT 
(7) T RENDS AND PATTERNS IN FOREIGN DIRECT INVESTMENT  
 
1. The Korean Government has facilitated outward  bound foreign direct investment in order to 
enhance the competitiveness of domestic enterpri ses  (Secretariat Report I, 7, 28, page 12). 
 
- Would Korea please indicate if it would promote investment in the agriculture sector 
of partner countries as a means to ensuring food security? 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
 (4) T
RADE POLICY OBJECTIVES  
 
2. Australia notes that Korea’s net support for agriculture  (3.3% of GDP) exceeds agriculture’s 
contribution to GDP  (3.2% in 2006). This overall leve l of assistance for agriculture is well above the 
OECD average.  Further, tariff protection averag es 53.5% for agricultural products and eight times 
higher than for industrial tariffs.  
- In addition to any Doha outcome, does Korea intend to reduce the level of its 
agricultural support and tariffs? 
 
(6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements  
 3. Australia recognises Korea’s strong advocacy of the multilateral trading system as a 
fundamental means to achieve economic growth an d development. Australia also recognises Korea’s 
efforts on the bilateral front to enhance relations w ith its trading partners. Korea has actively pursued 
a number of comprehensive FTAs as part of its st ated objective to complement multilateral trade 
liberalisation. As noted in the Secretariat Report  (II, 6, iii, 34, page 28), Korea’s secondary FTA 
objective is to facilitate domest ic reform and deregulation. 
 
- What are Korea’s goals for reform a nd deregulation of its  agricultural sector? 
 
- How will Korea seek to achieve these goals and within what timeframes? 
 
(7) F
OREIGN INVESTMENT REGIME  
 
4. Australia notes that while Korea welcomes inwa rd FDI, its ‘share of global inward FDI has 
reportedly been declining steadily since 2004’.  Aust ralia understands that Kore a agreed to liberalise 
elements of its foreign investment regime for United States investors upon entry into force of the 
Korea-United States  (KORUS) free trade agreement  (for example, the telecommunications sector). 
  - To encourage FDI, will Korea extend the liberalisation of its foreign investment 
regime under KORUS to all investors? 
  WT/TPR/M/204/Add.1 
 Page 17 
 
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 
(i) Customs procedures 
(b) Free trade zones 
 5. Australia understands that the Free trade z ones are exclusive areas outside the national 
customs boundary, exempt from customs requirements.  Activities in the zone may be exempt from 
import procedures and customs duties, and receive tax relief  (e.g. VAT and reduced corporate tax).  Korea states that this treatment does not constitute a subsidy specifically provided to an enterprise or 
industry or group of enterprises or industries; and is therefore not subject to notification to WTO 
pursuant to Article 25 of the WTO Agreement on Subsidies and Countervailing Measures. 
 
- Is reducing corporate tax an appropriate means of assisting exporters and is this 
treatment compliant with WTO Agreement on Subsidies and Countervailing Measures? 
 
(ii) Customs valuation 
 
6. Korea's customs valuation legislation  (sub- section 2 of the Customs Act 1949) complies with 
the WTO Agreement on Customs Valuation.  Australia  notes that the Korean Customs Service  (KCS) 
has introduced a system  (SIREN) for calculating "proper import prices" and comparing them with 
declared prices in an effort to detect undervaluation.  
 
- Could the Republic of Korea please outline how SIREN calculates "proper import 
prices"? 
 
(iii) Tariffs 
 Seasonal duties 
(d) Bound tariff 
 
7. Australia notes that seasonal duties  (III, para graph 44, page 50) were applied in 2004 to 
Chilean grapes.  
- What was the period of time for which the duties were applied? 
 
8. Australia notes that the Republic of Korea's tariff schedule is extremely complex with 
11,279 tariff classifications, each with a multiplicity of  rates. Access to many of those rates depends 
on the applicability of flexible tariffs, adjustment ra tes and the different rules of origin for various 
FTAs.   
 
- Rather than waiting for the outcome of the WTO negotiations, would Korea consider 
unilaterally streamlining its tariffs in or der to reduce regulatory burden, provide 
immediate savings to government and to  business through reduced administration and 
reduced compliance costs, as well as  through improved opportunities for the 
application of self-assessment, paperless tr ading, risk management and post-entry 
audit techniques? 
 
(g) Tariff preferences and rules of origin (ROOs) 
 
9. Korea continues to operate both preferential and non-preferential rules of origin.  Each of 
Korea's FTAs has separate and non-identical rules of origin, which increase the complexity of its WT/TPR/M/204/Add.1 
Page 18  
 
  tariff.  For example, rules of origin under th e Korea-Chile FTA are based on the "goods wholly 
obtained" and the "substantial transformation" criteri on.  The value-added rule is also applied to 
selected agricultural and industrial products.  A numb er of clothing items are subject to only specific-
process rules.  Divergent and complex rules of origin, which differ in concept, detail, and 
administrative process, add to the trading costs, thus complicating the trade facilitation process. 
- Given the divergent and complex nature of its preferential rules of origin, does Korea 
plan to seek more consistency in future preferential agreements and if so which 
approach to rules of origin does Korea favour? 
 
(iv) Tariff quotas (a) Agricultural tariff quotas 
 10. Australia notes that state trading enterpri ses impose additional mark-ups on top of the in-
quota tariff on items such as rice, garlic, onions, pi ne nuts, sesame, ground-nuts, buckwheat, peppers, 
mung beans/red beans and soybeans  (Part III, pa ragraph 60, page 54, Secretariat’s Report).  
 
- How do Korean authorities determine the level of the mark-up for each product it is 
applied to? 
 11. Korea applies a significant number of tariff quotas on agricultural products — approximately 179 (Part III, paragr aph 58, page 53, Secretariat’s Re port).  However, information on 
the administration of these tariff quotas is difficult to  ascertain due to the absence of MA:1 tariff quota 
notifications  (most recent notification was for calendar year 2001). 
 
- For each agricultural product that has a tariff quota, would Korea please provide 
details on how the tariff quota is administered  or advise how this information can be 
obtained? 
 
- Why have the MA:1 notifications not been provided since 2001? 
 12. The Korean Government can monitor the performance of state-trading enterprises and 
producer associations entrusted with the administra tion of tariff quotas, and demand the submission of 
necessary materials and, if necessary, take punitiv e measures  (Secretariat Report, III, 2, iv, 59, 
page 53). 
 
- What mechanism does Korea employ to monitor administration of tariff quotas? 
 
- What punitive measures does Korea use? 
 
- What punitive measures have been applied by the Korean Government since Korea’s 
last trade policy review? 
 13. Australia notes  (III, 2, iv, 60, page 54)) th at Korea intends to improve the current quota 
administration system whenever necessary. 
 
- What measures and policies has Korea pu t in place to facilitate this process? 
 
- What improvements have been made since Korea’s last trade policy review?  WT/TPR/M/204/Add.1 
 Page 19 
 
 
  (vii) State trading 
 
14. Australia welcomes Korea’s intention to s ubmit their STE notification to the WTO in 2009  
(Part III, paragraph 71, page 56, Secretariat’s Repor t) and encourages Korea to submit the notification 
early in the year. 
- In the interests of increasing the transpar ency of the multilateral trading system and 
the usefulness of the WTO notification system, will Korea submit its future STE notifications every two years in accord ance with Article XVII of GATT 1994 and the 
Understanding on the Interpretation of Article XVII of GATT 1994? 
 
- Will the foreshadowed STE notification cover the entire period from the last 
notification to the present  (i.e. 1998-2008)? 
 
- Why have Korea’s STE notifications not yet been made? 
 
15. A number of products  (potatoes, ginger, ses ame, etc.) are no longer imported exclusively by 
the designated agency, but are also imported by pr ivate importers buying quotas at agency auctions  
(Secretariat Report, III, 2, vii, 71, page 56).  
- What proportion of each product is imported by the designated agency compared to 
private importers? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Financial assistance Subsidies  
16. In 2006 Korea’s net agricultural support exceeded  the agricultural sector’s GDP contribution. 
Most assistance involves product-specific market price support, resulting in Korean consumers 
paying, on average, more than double world levels . Korea has no laws specifically limiting subsidy 
programs that may be anti-competitive  (Secretariat Report III, 4, ii, 148, page 76).  
- Which government agency is responsible fo r the comprehensive control of subsidies? 
 
- Has the Korea Fair Trade Commission undert aken any work on the impact of these 
subsidies? 
 
Directed lending and industrial development  
 
17. The Korea Development Bank's web-site notes that "Over the past five decades, KDB has 
provided vast amounts of industrial capital th rough traditional banking services like loans, 
investments, and guarantees to help develop Korea's industries and the national economy. 
 The capital made available by KDB has facilita ted the development of  key manufacturing and 
chemical industries during the 1960s and 1970s.  Since the 1990s, KDB has focused on cultivating 
technology-based industries, such as semiconductors, in line with efforts to boost Korea's strategic 
industries.  Moving forward, KDB plans to cultivate Korea' s next generation growth industries, namely, 
knowledge-based industries and 6T industries, such  as information technology, biotechnology, and 
nanotechnology.  In addition, KDB will support the government's efforts to diversify the nation's WT/TPR/M/204/Add.1 
Page 20  
 
  economic growth channels throug h the expansion of national infr astructure through SOC and other 
development financing."
2 
 As a government-owned bank, it is not necessarily c onstrained by the same constraints as commercial 
banks and can direct lending to favoured industries, including focusing on knowledge-based and 6T 
industries as noted on the bank's web-site.  Furt her, the United States Tr ade Representative has 
written that "US industries have reported that le nding and equity investments by the KDB have 
contributed to overcapacity in certain Korean i ndustries and have allowed Korean companies to 
compete unfairly with US companies."
3 
 
- How does the KDB plan to cultivate these indus tries, and will it entail directed loans, 
equity injections or other financing? 
 
(vi) Intellectual property rights 
 18. Penal provisions for rights infringement of pa tents, utility models, trade marks and industrial 
designs are available under the present legislation fo r falsely indicating such a right or fraudulently 
obtaining one  (paragraph 171 refers).  
- What are the criteria for fraudulently or unjustly obtaining a right? 
 
19. Extension of the term of patent for pharma ceutical or agricultural chemicals undergoing 
certain market-approval procedures is available for up to five years.  
- What are the processes for consideration of the extension of patent term for 
pharmaceutical or agricultural chemicals, a nd what are the relevant parts of Korea’s 
legislation?  
 20. The scope of the 2007 amended Trade Mark Ac t extended to include all types of mark that 
can be visually recognized.   
- Are there any intentions to broaden the scope of protection for non-traditional marks 
such as scent and sound? 
 21. The Trade Marks legislation prevent registra tion of trade marks consisting of "conspicuous 
geographical name"   
- What is the criterion for "conspicuous geographical name"? 
 22. Paragraph 178 of the report indicates that any trade mark containing geographical indications 
for wines or spirits originating in any WTO Member cannot be registered.   
- How does a WTO member with a trade mark consisting of registrable elements as 
well as a geographical indication where the goods originate in the geographical 
indication apply for registration in Korea?  
 
                                                     
 
 2 http://www.kdb.co.kr/screen/jsp/IHEng/IHEngUPrt02050001E.jsp. 
 3 US Trade Representative, 2008 National Trade Estimate Report on Foreign Trade Barriers , USTR, 
Arlington, 2008.  WT/TPR/M/204/Add.1 
 Page 21 
 
 
  IV. TRADE POLICIES BY SECTOR 
2. A GRICULTURE  
 Domestic support  
23. Korea has certain regular notifications outst anding and such as notifications for domestic 
support commitments  (i.e. outstanding DS:1 notifi cations and any DS:2 notifications) and imports 
under tariff quotas  (MA:2)  (while the last notifi cations for the above were submitted in 2007 they 
only covered calendar years 2001-2004).  
- When will Korea provide Members with an opportunity to review these notifications? 
 24. Australia welcomes the decline in domestic  support provided by the Government of Korea 
from 68% to 63%  (PSE) in 2006. We note however , that this is still double the OECD average  
(Part IV, paragraph 12, page 93, Secretariat’s Report).  
 
- What measures is Korea taking to reduce this amount further?  
 
(ii) Policy developments 
 
25. Australia notes the mid to long term measures Ko rea has adopted to cope with the recent rise 
in world food prices  (Part IV, paragr aph 9, page 92, Secretariat’s Report). 
 
- Would Korea please provide further details about the plans to extend the volume of 
tariff rate quotas for selected commoditi es?  For example, when will Korea 
implement this plan, for how long and for which products? Will these changes be 
permanent? 
 
- Will Korea consider lowering the tariff as well? 
 
- Would Korea please provide more informati on about its long term strategy regarding 
promoting Korean investment in agriculture  overseas? What actions have been taken 
to this end and what are the timeframes? 
 
(iii) Selected activities (a) Rice  
 26. Special treatment for Korea’s rice importa tion scheme was granted under the Uruguay Round.  
Special treatment was extended by WTO Members from 2005 to 2014  (Secretariat Report page 99). 
 
- Will Korea seek to extend special treatm ent for its rice importation scheme after 
2014?  
 
(c) Dairy 
 
27. Australia notes Korea’s recent policies to re duce the national surplus of milk production. 
While introduction of the differen tiated pricing mechanism for surplus milk has reduced the volume 
of surplus milk purchased by the Korea Dairy Commi ttee, Korea’s current quota-based system of milk 
pricing appears to encourage overproduction of milk  and provide high levels  of support to producers 
with already high incomes  (Secretariat report V, 2, 34, pp 100-101).  WT/TPR/M/204/Add.1 
Page 22  
 
  - Would Korea consider reducing support le vels and deregulating the marketing of 
milk?   
- What efficiency and equity benefits could be gained through deregulation? 
 (6) S
ERVICES  
 (ii) Overall commitments under the GATS 
 
28. Australia notes that to be able to provide professional services, such as legal, accounting, and 
audit and taxation services, foreign qualifications need to be approved in Korea.   
  - What is the foreign qualification process for professional service providers?  29. Legal services form an essential pillar of business infrastructure that supports and facilitates 
international transactions cove ring both goods and services.  We note Korea has only made 
commitments on advisory services with substantial restrictions.  
- Would Korea permit foreign legal professions to enter Korea temporarily  (up to three 
months) to provide legal services of those jurisdictions in which they are qualified, 
without requiring that they be locally licensed or registered? 
(iii) Banking and finance  
Securities sector 
 
30. Australia notes that foreign providers of securities and securities-related businesses must be 
licensed by the Financial Services Commission. 
 
- What is required under this licensing process?   
 - Is the licensing process unnecessarily burdensome or trade restrictive? 
 
MEXICO
 
 
Se solicita a la República de Corea responder a l as siguientes preguntas formuladas con base en lo 
señalado en el documento WT/TPR/G/204  del 3  de septiembre de 2008. 
 
INFORME DE GOBIERNO 
 
II. EVOLUCIÓN ECONÓMICA:  2004-2008 
2) I NVERSIÓN Y COMERCIO EXTERIOR  
 
El párrafo 17 indica que el déficit de los servicios  en Corea se ha mantenido por encima de los 
10.000 millones de dólares EE.UU desde 2005 y ha continuado creciendo hasta alcanzar los 20.600 millones de dólares en 2007.  México desea conocer cuál es la causa principal del 
comportamiento creciente de las importaciones de  servicios frente a las exportaciones de Corea.  
  WT/TPR/M/204/Add.1 
 Page 23 
 
 
  OBSERVACIONES RECAPITULATIVAS 
1) EL ENTORNO ECONÓMICO 4) E
VOLUCIÓN DE LAS POLÍTICAS SECTORIALES Y  
5) P ERSPECTIVAS ;  Y 
 
I. EL ENTORNO ECONÓMICO 2) E
VOLUCIÓN ECONÓMICA RECIENTE  
 
En el primer párrafo, se menciona que el potencial de crecimiento de Corea se ve menoscabado por la productividad de la mano de obra relativamente baja y por el menor crecimiento de la productividad 
total de los factores en el sector de los servicios.   El párrafo 21 indica que esto se debe a una excesiva 
reglamentación en el predominio de empresas estat ales y en la escasa presencia extranjera.  En el 
párrafo 6 del apartado 2) EVOLUCIÓN ECONÓMICA RECIENTE de la sección I. EL ENTORNO 
ECONÓMICO se establece que los índices de produc tividad en otros servicios también han sido 
decepcionantes, principalmente a causa de la protección que se concede al sector de los servicios en general.  México desea conocer si Corea tiene previstas reformas estructurales u otras reformas, 
además de las planteadas en servicios financieros, para facilitar desde el punto de vista regulatorio la 
participación de empresas extranjeras en el suministro  de servicios y en igualdad de condiciones que 
las empresas nacionales. 
 En el último párrafo de las OBSERVACION ES RECAPITULATIVAS, ubicadas en el apartado 
5) PERSPECTIVAS, se menciona la continuación de las reformas de la reglamentación como 
complemento de otras, para dar una mayor flexib ilidad a la economía coreana y reaccionar de forma 
competitiva a la creciente competencia exterior.  México desea conocer a qué sectores de servicios se 
extenderán estas reformas.  
 
IV. POLÍTICAS COMERCIALES POR SECTORES 6) S
ERVICIOS  
ii) Compromisos globales en el marco del AGCS  
 
En el párrafo 73 se menciona que según el informe relativo al plan de acción individual de Corea para 
2006, el mayor interés de Corea en la esfera de lo s servicios es la liberalización de los servicios de 
infraestructura, como el transporte marítimo, la c onstrucción, las telecomunicaciones, los servicios de 
distribución y los servicios financieros. México desea ría saber si Corea tiene la intención de reducir o 
eliminar restricciones a la participación extranjera en esos  sectores y en que consistiría la 
liberalización. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S ERVICIOS  
iii) Servicios bancarios y financieros 
b) Marco reglamentario y de supervisión 
 
En el párrafo 83 se indican los requisitos general es para que una sucursal de un banco extranjero 
pueda establecerse en Corea.  México desearía saber si los requisitos exigidos a los bancos extranjeros 
son similares para los bancos coreanos.   En el párrafo 90 se señala que las sociedades de valo res y actividades conexas, como el corretaje, las 
operaciones y la suscripción de valores, deben obte ner una licencia de la Comisión de Supervisión 
Financiera  (FSC).  Las sucursales u otras oficinas extranjeras deben estar aprobadas por la FSC, según el tipo de actividades. Desearíamos saber cu ales son los requisitos para que las sucursales u 
otras oficinas extranjeras puedan obtener una licencia.  
 WT/TPR/M/204/Add.1 
Page 24  
 
  IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
iv) Seguros 
c) Reglamentación 
 En el párrafo 95 se menciona que las sucursales extranjeras deben mantener recursos de 
3.000 millones de won por lo menos, para poder hacer  negocios con coreanos y extranjeros. México 
desea saber si ese requisito es el mismo para las compañías de seguros de vida coreanas. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
v) Telecomunicaciones   
En el párrafo 103 se indica que la inversión extranje ra en este sector está su jeta a una limitación del 
49 por ciento y, con arreglo a la Ley del Co mercio de Telecomunicaciones, la Comisión de 
Comunicaciones de Corea  (KCC) puede prohibir a un  accionista extranjero adquirir una participación 
mayoritaria en KT.  De todos modos, en la actualid ad el mayor accionista de KT es extranjero, gracias 
a una excepción. Deseamos saber en  que casos se hacen excepciones. 
 
En el párrafo 111 se indica que las transmisiones te rrestres de radio y televisión están cerradas a la 
participación de inversiones extranjeras, y la pa rticipación extranjera en otras esferas de la 
radiodifusión está limitada al 49 por ciento. México desea saber si existen empresas extranjeras participando en otras esferas de la radiodifusión.  
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
vi) Transporte a) Transporte marítimo  
 
El párrafo 116 indica que aunque la navegación de cabotaje sigue estando reservada a los buques 
coreanos, los extranjeros pueden participar en el tr ansporte de mercancías y pasajeros entre Corea del 
Norte y Corea del Sur como socios minoritarios de una empresa conjunta con una compañía coreana.  
México desea conocer si existen requisitos adici onales para ser socios minoritarios y si en las 
compañías que actualmente participan en esta ru ta ya hay socios minoritarios extranjeros. 
 En el párrafo 117 se señala que la mayoría de los serv icios marítimos auxiliares,  como los servicios de 
remolcador, consignación de cargas y servicios de  mantenimiento y repar ación, corren a cargo del 
sector privado. México desea saber si estas disposiciones incluyen al sector privado extranjero.  En el párrafo 118 se menciona que para atraer a un mayor número de compañías navieras, el Gobierno 
anunció en 2006 planes para mode rnizar las instalaciones portuarias y agilizar las operaciones.  
México está interesado en conocer la inversión actua l estimada en estos planes,  si han participado 
empresas extranjeras y si tales empresas lo han hecho a través de licitaciones.  En el párrafo 119 se hace referencia a que el Gobi erno recurre cada vez más al sector privado para 
desarrollar la infraestructura portuaria y proporciona servicios de conformidad con varios acuerdos de 
concesión, como los contratos de construcción,  explotación y retrocesión o de construcción, 
retrocesión y explotación. México desea saber si est a política comprende al sector privado extranjero 
y si el trato es igual para el sector privado coreano. 
  WT/TPR/M/204/Add.1 
 Page 25 
 
 
  IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S ERVICIOS  
vi) Transporte b) Transporte aéreo 
 
El párrafo 121 indica que los servicios aéreos in ternacionales se rigen por acuerdos bilaterales de 
servicios aéreos, que negocia principalmente el Mi nisterio de Ordenación Territorial, Transporte y 
Asuntos Marítimos.  Corea ha firma do acuerdos bilaterales de servicios aéreos con 87 países, incluso 
un acuerdo de "cielos abiertos" con los Estados Un idos.  Además, tiene el propósito de negociar 
nuevos acuerdos, al tiempo que liberalizar progresivame nte los acuerdos bilaterales en vigor. México 
desearía saber con que países Corea tiene el pr opósito de negociar nuevos acuerdos y en que 
consistiría la liberalización progresiva de  los acuerdos bilaterales en vigor.  
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
vii) Servicios de distribución  
 
En el párrafo 131 se señala que la participación ex tranjera se excluye del comercio de productos 
farmacéuticos, artículos médicos y productos funciona les;  armas de fuego, explosivos y espadas;  
obras de arte y antigüedades;  y el funcionamien to de los mercados públicos al por mayor de 
productos agrícolas, pesqueros y ganaderos y los servicios de distribución en esos mercados.  
Además, los servicios al por mayor y al por menor  relacionados con los automóviles de segunda mano 
y los combustibles gaseosos están sujetos a una pr ueba de necesidades económicas. Al respecto, 
México desea saber si Corea tiene previsto liberalizar  el funcionamiento de los mercados públicos al 
por mayor de productos agrícolas, pesqueros y ganaderos y los servicios de distribución de esos mercados.  
 
MEXICO – SECOND SET
 
 
Indicaciones geográficas 
 
1. ¿Quién es el titular de una indicación geográfica coreana? 2. ¿Cuales son las indicaciones geográficas coreanas protegidas y para que productos se aplican? 
3. ¿Existe un registro de indicaciones geográficas extranjeras aplicable a cualquier producto? 
4. Si existiera interés de registrar una indi cación geográfica extranjera en Corea, ¿ante qué 
autoridad se tendría que hacer el trámite y cuál es el procedimiento? 
5. De manera general ¿cómo funciona el Cent ro Especial de Observancia de Derechos de 
Propiedad Intelectual en Corea? 
 Importaciones paralelas  
6. ¿En Corea las importaciones paralelas están prohibidas para todas las figuras es decir, marcas, 
patentes  y derechos de autor? 
 Variedades vegetales 
 
7. ¿En qué casos aplica la patente en plantas?. Es decir, en qué casos se aplican "invenciones" 
bajo la Ley de Patentes, y cuándo el "derecho de  obtentor" conforme la Ley de Semillas. Esto 
para aplicar equivalencias y posibles reciprocidades, si fuera el caso. 
 WT/TPR/M/204/Add.1 
Page 26  
 
  Protección a los derechos de propiedad 
 
8. Podría proporcionarnos  más detalles sobre la naturaleza del Tr ibunal de Propiedad Intelectual,  
(¿es un organismo autónomo o si depende del poder judicial?, cuáles son sus competencias) 
9. Las autoridades que pueden aplicar  multas ¿pueden actuar de oficio? 
10. ¿En qué consiste el "sistema de telara ña" implementado en la detección de productos 
infractores de derechos de propiedad intelectual? 
11. En caso de que tras la solicitud de suspensi ón de despacho de las mercancías sospechosas de 
falsificación, el titular del de recho no inicie ninguna acción le gal en contra del importador, 
¿quién cubre los daños y perjuicio ocasionados al importador por la suspensión del despacho  
(tales como pagos de almacenaje, transporte, seguros, etc.)?  
12. ¿A qué se refieren o quién hace el depósito de una garantía del 120%  del valor imponible de 
las mercancías y cuál es el procedimiento en esos casos?  
13. El proporcionar a los consum idores una página para poder iden tificar con mayor facilidad los 
productos auténticos de los falsif icados, ¿no se convierte en una herramienta para los piratas o 
falsificadores puedan mejorar sus productos o aprender los medios implementados por los 
titulares de los derechos para la protección de sus derechos? 
 
Patentes 
 
14. Podría explicarse ¿en qué circ unstancias y qué requisitos deben reunirse para que la vigencia 
de una patentes puede  ser prorrogada? 
15. Existe alguna vinculación para el tema de patentes y medicamentos entre la Oficina Coreana 
de Propiedad intelectual y el Ministerio de Salud? 
 
Derechos de autor 
 
16. ¿Podría proporcionarnos mayor información acerca  de los derechos de transmisión digital de 
sonidos?. Por ejemplo, nos gustaría saber cómo se lleva a cabo esta protección, qué tipos de obras 
protege y si prevé también la protección de los derechos conexos.  
 
Marcas 
 17. ¿ En qué consiste o cómo funciona el sistem a informatizado de marcas de fábrica o de 
comercio?  
 
TURKEY
 
 WT/TPR/S/204 
 
II. TRADE POLICY REGIME  
(7) F
OREIGN INVESTMENT REGIME  
 
It is mentioned in the Secretariat Report that Ko rea’s share of global inward FDI  (Foreign Direct 
Investment)  has been declining steadily since 2004.   We understand,  that the decline trend  of inward  FDI flow has happened  despite some measures had 
been taken  to help to improve  the business environment  in the country.  
 
- What kind of reasons are Korean authoriti es  thinking, as the reason for  the low level 
and decline of inward FDI in recent years? 
 
- What kind of policy measures are planned to address that problem?  WT/TPR/M/204/Add.1 
 Page 27 
 
 
  WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures  (Para. 16) 
 Para 16 mentions that  more rigorous customs in spections on some agricultural products such as 
peppers, garlic, onions, carrots, ha ve  been applied since 2005 against increased imports due to 
undervalued import declarations.  
- Could Korean Delegation explain what sp ecific  inspections are carried out at 
customs in the imports of the mentioned products?  
 
- Have  these inspections brought about  intended results ?  
 
WT/TPR/S/204 
 
III. TRADE  POLICIES AND PRACTICES BY  MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs  
We understand that the tariffs are important  trade  policy measures  for Korea.   
 On the basis of the Secretariat Report it is noted that there  are plenty of tariff measures with different  
rationales  and policy objectives as well as multiplicity of   levels.  
According to the Secretariat Report, the 2008  customs tariff remains relatively complex. 
 
- Could Delegation of Korea give explanation if there is a  plan to simplify customs 
tariff  regime which seems too complex  and  unpredictable at present due to wide range of tariff  measures? 
 
WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY  MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS   (Para. 36-37) 
 
So called  "flexible tariffs" which enable Korea to apply higher MFN duties on a temporary basis 
seem to be in line with Korea’s tariff commitmen ts as WTO bindings are respected in any case.  
 However, Secretariat report mentions that the syst em allows  Korean authorities  to increase or 
decrease  certain tariffs up to 40%above or below a fixed tariff rate   which in turn may have implications on the imports.  
- We would like to learn  if and  at what st age,   importers are informed about the level 
of tariff they will have to pay. 
 WT/TPR/M/204/Add.1 
Page 28  
 
  WT/TPR/S/204 
 
III. TRADE  POLICIES AND PRACTICES BY MEASURE  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  (PARA. 55) 
 
It is stated in the Secretariat Report that  diverg ent and complex rules of origin  add to the trading 
costs and complicates the trade facilitation process.  
It is further noted that the  expanding network of  preferential arrangements makes customs clearance 
more complicated. 
 
- Could the Korean authorities elaborate on how they are dealing with difficulties 
divergent rules of origin creating at customs?   What kind steps  are  being taken to 
facilitate trade in that regard? 
 
WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS   (Para. 58, 59) 
(iv) Tariff quotas 
 
Secretariat Report notes that  there is a large unfille d share of tariff quotas  on some items even with 
relatively low in-quota tariffs  and  that suggests that their administration  and allocation may  be 
restricting imports. 
 
It is further noted that     state trading enterpri ses  most of which, according to the Report are engaged 
directly in marketing imports  and allocating quot as impose additional mark-ups  on top of the in-
quota tariff  on some items such as rice, garlic, onions, pine nuts etc. 
 
- Please indicate the role of   state  trading enterprises  in quota allocations?  
- On what basis do state trading enterpri ses make mark-ups in –quota tariff levels? 
Could Delegation of Korea assure us that this activities of state trading enterprises  do not impede imports? 
 
WT/TPR/S/204 
 
III. TRADE  POLICIES AND PRACTICES BY  MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ix) Standards and other technical requirements (Para. 86)  
According to the Secretariat Report there are  a few  "Korea specific" standards  and that the 
opportunity for interested parties are given  in the development or review process of these standards. 
 
- Please indicate how interested parties are informed in the development of "Korea-
specific" standards. Is there  a list of pr oducts where only "Korea-specific"  standards 
are considered? 
  WT/TPR/M/204/Add.1 
 Page 29 
 
 
  WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iv) State-owned enterprises and privatization (Para. 156) 
 The Secretariat Report states that state  i nvolvement persist in the Korean economy. 
- Could Delegation of Korea explain if there is  a projection to continue to privatization 
program? 
 
WT/TPR/G/204 
 
III. TRADE POLICY DEVELOPMENTS (1) K
OREA AND THE WTO 
(a) Implementation of WTO Commitments 
 Para 32  reads that " A total of 90.8% of all tariff lines   are bound and the simple average  bound 
tariff  rate fell slightly  from 17.2% in 2004 to 17% in 2007. A further decrease should take place in 
2009 when all  Uruguay Round  commitments are to be fully implemented." 
 
 - Could Delegation of Korea kindly explain  which UR commitments are referred to in 
that paragraph? 
 
TURKEY – SECOND SET
 
 
WT/TPR/S/204 
 III. TRADE POLICIES AND PRACTICES BY MEASURE  (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(viii) Contingency measures  (Para. 73)  
It is indicated in the Secretariat Report, that the calculation method  of the dumping margin was 
changed. 
Could the government of Korea give more info rmation on the new method of dumping margin 
calculation? 
 
WT/TPR/S/204 
 IV. TRADE POLICIES BY SECTOR (6) S
ERVICES  
(v) Telecommunications  (Para. 103)  
It is noted that in the Secretariat Report that the foreign investment in the telecommunications  sector 
is subject to a 49% ceiling. 
 We would like to learn whether there is a timetable for removing the foreign equity limitation in basic  telecommunication services.  WT/TPR/M/204/Add.1 
Page 30  
 
  ARGENTINA
 
 WT/TPR/S/204, INFORME DE LA SECRETARÍA  III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
 ii) Valoración en aduana 
b) Normas de origen   
Párrafo 25, página 50  
En este párrafo, el informe menciona que Corea ha  puesto en marcha un "proceso de normalización de 
nombres de los artículos", en materia de valo ración en aduana para determinados productos 
importados. ¿Podría Corea brindar más detalles sobre en  qué consiste este proceso y de qué manera se 
implementa?   iii)  Aranceles 
c) Aranceles flexibles Derechos de ajustes  Párrafo 38, página 55  En este párrafo, el informe indica que Corea aplica "der echos de ajuste", con el objetivo de proteger a 
las ramas de producción nacionales de los aumentos súbitos de las importaciones y atenuar el impacto de la liberalización del comercio, y que estos son apli cados por el Ministerio de Hacienda anualmente, 
pudiéndose ajustar por Decreto Presidencial. ¿Podría  Corea explicar cuáles son las bases sobre las 
cuales se aplican estos derechos?   (iv) Contingentes arancelarios  Párrafo 60, página 62  
En este párrafo, el informe menciona que Corea emplea diversos mecanismos para la asignación de 
los contingentes y su administración, según los productos;  como la subasta, la asignación a un 
organismo designado, la distribución sobre la base  de la demanda real o combinaciones de estos 
métodos. ¿Podría Corea brindar más detalles sobre dichos métodos de asignación y sobre cuáles son 
los productos comprendidos?  
CANADA
 
Report by the Government of Korea  (WT/TPR/G/204) 
Part II. ECONOMIC DEVELOPMENTS: 2004-2008; paragraph 19, page 9 
The Government Report notes that deregulation re mains at the top of the Korean government’s 
agenda. In 2008, the Presidential Council on Na tional Competitiveness  (PCNC) was launched. Its 
main objective is to create a business-friendly e nvironment by eliminating unnecessary obstacles that 
hinder investment. 
1. a) Could Korea please elaborate on the functions of the PCNC?  
b) Is the PCNC an advisory body only, or w ill it be integrated into the Korean regulatory 
policymaking apparatus?    WT/TPR/M/204/Add.1 
 Page 31 
 
 
  c) What is the relationship between the PC NC and the Regulatory Reform Task Force  
(RRTF) and the Regulatory Reform Committee  (RRC)? 
Report by the Secretariat  (WT/TPR/S/204) 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (5) T RADE LAWS 
AND REGULATIONS : paragraph 16, page 20 
The Secretariat Report notes that the authorities plan, inter alia , to re-examine and reorganize 
40 percent of the existing regulations, to upgrade th e regulatory system, and to transform regulations 
with the largest impact on society and the economy. 
2. a) Could Korea provide additional informat ion on these regulatory review processes? 
b) On what basis was the 40 percent targ et established for the re-examination and 
reorganization of the existing regulations?  
c) How will the regulatory system be upgraded? d) Has the government established paramete rs and measures for determining which 
regulations have the largest impact on society and the economy?  What are these 
parameters and measures? 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (6) T
RADE 
AGREEMENTS AND ARRANGEMENTS ;  (i) Korea and the WTO; paragraph 20, page 23 
The Secretariat reported that Korea regards trad e with North Korea as in tra-Korean commerce and 
that such trade is exempt from tariffs.   
3. a) What mechanisms are in place to mon itor and measure intra-Korean trade?  
b) For goods jointly produced in North and South Korea, does Korea maintain separate 
export data  (including the destination c ountry), if these goods are ultimately exported 
from South Korea?  
c) Could Korea provide trade data on such in tra-Korean trade on a tariff line basis?   
d) Are such data available for exported goods produced in the Gaeseong Industrial 
Complex  (GIC)? 
e) How are GIC-produced goods r ecorded in Korean statistics? 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (7) F OREIGN 
INVESTMENT REGIME : paragraph 49, page 32 
Paragraph 49 states that: "The Foreign Investment  Promotion Act  (FIPA) permits all FDI types, 
which include: establishment of new businesses, purchase of shares in existing businesses, mergers 
and acquisitions, with at least 10% foreign ownership; and loans of five years or longer from foreign 
parent or affiliated companies. Korea abides by OECD Codes of Liberalization of Capital Movements 
and of Current Invisible Operations, and the National Treatment Instrument." WT/TPR/M/204/Add.1 
Page 32  
 
  4. a) Could Korea provide information on the proposed amendments to the FIPA, which 
will provide criteria for limiting foreign inv estments that may have a negative impact 
on national security?  
b) Has this amendment taken effect? c) Do foreign firms have recourse to appeal  the decision should their investments be 
denied based on national security reasons?  
d) What steps have been taken to ensure transparency of the process? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (1)
 INTRODUCTION : 
paragraph 6, page 39  
Paragraph 6 states: "A range of measures involving  grants, tax concessions and low-interest loans 
continue to support production and tr ade in a range of agricultural, forestry, fishing, and manufactured 
products although tax incentives were to terminate automatically at the end of 2003 in accordance 
with sunset clauses." 
5. Does Korea plan to reduce and eliminate these market distorting practices? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iii) Tariffs;  (a) Applied MF N rate; paragraph 31, page 46  
The Secretariat reports that there remains scope for Korea to rationalize its tariff. 
6. Does Korea have plans to undertake any tariff si mplification exercises, or is such work 
currently underway?  If so, please provide details. 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iii) Tariffs;  (c) "Flexible" Tari ffs; Adjustment duties; paragraph 38, 
page 49  
The report explains that adjustment duties are set an nually by the Ministry of Strategy and Finance  
(MOSF), whose proposals are considered by th e Customs and Tariff Deliberation Committee. 
7. Can Korea elaborate upon the factors taken into account by these two bodies when making 
decisions regarding adjustment duties, including how affected products are selected and how the 
higher adjustment duty rate is determined? 
Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iv) Tariff quotas,  (a) Agricultural  tariff quotas: paragraph 58, page 53  
The Secretariat Report notes the latest data provide d by the authorities in 2006 shows the average fill 
rate of tariff quotas was around 68.3. It goes on to say,  "the consistently large unfilled share of tariff 
quotas on some items, even with relatively low in-quot a tariffs, suggests that their administration and 
allocation may, inter alia, be restricting imports ". Conversely, the Reports notes, "the authorities 
indicate that low TRQ fill rates resulted, inter alia, from lack of sufficient domestic demand or 
sanitary measures related to the outbreak of diseases in  exporting countries, such as the BSE, foot and 
mouth disease, and avian influenza."  WT/TPR/M/204/Add.1 
 Page 33 
 
 
  8. Based on Korea’s most recent MA notifications for 2003 and 2004, 19 of Korea’s 63 WTO 
tariff quotas had fill rates below 65% for both of th ese years; can Korea explain why these 19 tariff 
quotas have been consis tently underfilled?  
Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iv) Tariff quotas,  (a) Agricultur al tariff quotas: paragraph 59, pages 53 
and 54  
The Secretariat Report notes that, "tariff quotas, and the import quota on rice, are allocated or 
operated by some 22 different organizations including ministries, state-trading entities, such as the Ministry of Food, Agriculture, Forestry and Fish eries  (MIFAFF) for rice and barley, and various 
producer associations, including the National Ag ricultural Cooperatives Federation and the Korea 
Feed Ingredients Association. In some cases, the administering authority is owned or controlled by 
domestic producers competing with the imported item." 
9. How does Korea regularly monitor the numerous entities entrusted with tariff quota 
administration to make sure that they all co mply with GATT Article XIII and the Agreement on 
Import Licensing Procedures? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii)  Contingency measures: paragraph 73, page 57 
Paragraph 73 refers to a 2008 amendment to the Korean legislation governing the application of 
contingency protection measures has been changed to  ensure that the reviews of anti-dumping duties 
are to be conducted in an identical fashion to the pr ocess of original investigations. However, it is also 
stated that the calculation method of the anti-dumping duty margin was changed.  
10. Please describe the change in calculation methodology in reviews of anti-dumping duties as 
opposed to the methodology employed in original investigations.  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii)  Contingency measures;  (a) antidumping: paragraph 74, page 57, 
and Chart III.4  (a), page 58 
It is noted that there was a marked decline in th e initiation of anti-dumping duty investigations in the 
years 2004-2006 inclusion.  
11. Can Korean authorities comment as to th e possible basis for this decline?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures;  (a) Antidumping: paragraph 74, page 57, 
and Chart III.4  (b), page 58 
It is noted that for the period under review, imports  of chemicals made up almost 25 percent of the 
total investigations initiated.  
12. a) Is this trend a change from previous years? 
b) Can Korean authorities comment on any change in trends? WT/TPR/M/204/Add.1 
Page 34  
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures;  (a) Antidumping: paragraph 74, page 57, 
and Table III.3, page 59 
It is noted that of the 30 final anti-dumping duty measures in place as of December 31, 2007, six are 
price undertakings. Canadian authorities have not ed a decline in the number of its own price 
undertakings over the past several years.  
13. Can Korean authorities provide any explanation as to continued use and the relatively higher 
number of price undertakings in Korea? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures;  (b) Safeguards; General; paragraph 77, 
page 57 
The Secretariat reports that Korea has not used safeguards to protect domestic industries since 2004. 
14. Can Korea provide a list of all safeguard inves tigations, including expedited investigations 
related to the application of provisional measu res that have taken place between 2004 and 2008, 
including those that did not result in the applica tion of safeguard or provisional safeguard measures? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements: paragraph 93, page 63  
The Secretariat Report notes that the Korea Agency  for Technology Standards  (KATS) plans to 
promote private certification to create environments  for self-regulatory growth and development with 
the goal of minimizing market intervention. 
Canada notes that Korea has implemented a num ber of standards regarding the preservative 
treatment of lumber to ensure the quality of treat ed lumber available in Korea. Available market 
intelligence suggests that both certified and non-cer tified preservative treated lumber are commonly 
available in Korea. 
15. Could Korea explain whether it intends  to promote private certification 
for preservative treated lumber and conduct market su rveillance and inspections with view to ensure 
that all domestically preservative treated lumb er meets minimum recognized preservative treatment 
standards to the benefit of all Korean consumers?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 101, 
page 64  
The report states that "Korea is a member of the .... World Organisation for Animal Health  (OIE) ... ; 
it applies animal .... quarantine requirements based on these international standards. Its main laws on 
quarantine requirements for imports  (and exports ) are ... the Act for Prevention of Livestock 
Epidemics...." 
In September 2008, Korea enacted amendments to the Livestock Epidemic Prevention Act  (LEPA).  
The amendments include the following provisions: In  order to import beef or beef products from a 
country where BSE has broken out for the first time, or to lift an import ban which had been placed on 
beef or beef products from such a country, the National Assembly must deliberate on the hygiene 
conditions of the beef or beef pr oducts imported from the said country; the Korean Minister of Food,  WT/TPR/M/204/Add.1 
 Page 35 
 
 
  Agriculture, Forestry and Fisheries may put a tempor ary ban on importing beef or  beef products in the 
case that BSE broke out in a beef-exporting countr y where hygiene conditions were already notified 
and thus urgent measures are required; beef and beef products of cows aged 30 months or more, 
which are from countries where BSE has broken out less than 5 years ago are subject to an import prohibition; and, in order to import beef or beef pr oducts of cows aged 30 months or more, based on a 
judgment that consumer confidence has improved, delib eration by the National Assembly is required.  
Canada notes that the OIE BSE Chapter provisions of  the Terrestrial Animal Health Code establishes 
a process to evaluate and categorize BSE risk. For example, for countries designated as "controlled 
risk" the Code  (Article 2.3.13.11 in conjunction with  Article 2.3.13.1) provides for trade in all beef 
from cattle of all ages and in accordance with de fined inspection and certification procedures. 
Canada's view is that the new LEPA legislative amendments establish requirements which are 
considerably more trade restrictive than the relevant OIE provisions.  
16. How will Korea, as a member of the OIE, en sure that they will apply these legislative 
amendments in a manner consistent w ith the relevant OIE provisions?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements; page 65, paragraph 104  
The Secretariat report notes  "...Korea bans imports, for example, of live cattle, sheep and goats, and 
certain products from countries where BSE and foot and mouth diseases are known to occur."  
Canada again notes that the OIE BSE Chapter provi sions of the Terrestrial Animal Health Code 
establishes a process to evaluate and categorize BSE risk. For countries designated as "controlled 
risk" the Code  (Article 2.3.13.11 in conjunction with  Article 2.3.13.1) provides for trade in all beef 
from cattle of all ages and in accordance with de fined inspection and certification procedures.  
17. Again noting that Korea is an OIE member, how is the current ban on imports of beef imports 
from countries where BSE is known to occur, par ticularly for those countries designated by the OIE 
as "controlled risk", consistent w ith the relevant OIE guidelines? 
Part III. TRADE POLICY AND PRACTICES BY MEASURE;  (2) M EASURES AFFECTING 
IMPORTS ,  (x) Government procurement: paragraph 109, page 66 
The Secretariat notes that for GPA-covered entiti es, contracts subject to Korea's commitments 
represented about 38.4% of total GP A-covered procurement in 2004.  
18. Could Korea please clarify this statement? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (a) Industrial property: 
paragraph 172, page 84  
The Secretariat report states, "The Patent Act of 1947  was totally revised in 2001 and last amended in 
2008."  
19. Could Korea please outline the key elements of the latest amendment (s) in 2008? WT/TPR/M/204/Add.1 
Page 36  
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 185, page 86  
The Secretariat report states that, "The production or provision of devices or services for 
circumventing copy control technology is prohibited." 
20. a) Canada would appreciate knowing whether the act of circumventing copy control 
technology is included under this prohibition, and whether there are any exemptions for educational, personal use, research, or other specific purposes.  
b) Also, is there a mechanism  (such as a re gulation-making power) to recognize other 
exemptions in the future if a need arises? 
The reports also states "...and a 'notice and take down system' provides legal incentives to promptly 
take down infringing materials at the rights holders’ request."  
21. a) Canada would be most grateful for a description of, or elaboration on, the "legal 
incentives" for internet service provide rs under Korea's "notice and takedown 
system".  
b) In addition, does the right holder have to provide any information along with the 
request for takedown? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 186, page 86 
The Secretariat report states that, "Compulsory li cences may be granted under strict procedural 
conditions: eight  (one on foreign works) were granted until 2007." 
22. a) Could Korea please clarify whether compul sory licences, in this instance, would 
apply solely to "orphan works" or rather to works where the rights holders cannot be 
identified or located?  
b) In what other circumstances or situations are compulsory licences granted? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 189, page 87  
The Secretariat report states that, "Civil remedies  against copyright infringements  (including 
computer programs) include injunctions, dest ruction of counterfeit products, and damages." 
23. a) Canada would appreciate knowing who bears the cost for the destruction of goods 
deemed counterfeit in civil proceedings: is it the State or the rights holder? 
b) In addition, are there any instances where destruction costs were included in damages 
awarded to the rights holder?  WT/TPR/M/204/Add.1 
 Page 37 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights ;  (c) Enforcement: paragraph 194, 
page 88 
The Report mentions that the Public-Private Counc il for the Protection of the Intellectual Property 
Rights was established in 2006.  
24. Could Korea please provide more information on the objectives and activities of this council? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights : paragraph 196, page 88 
The report states that a Copyright Protection Centre was created in 2005.  25. a) Could Korea please provide more detail on the size, scope, and specific activities of 
this centre? 
b) Is there any data available on the effec tiveness of its anti-piracy activities so far? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 145, page 75 
It is reported that while the Government has no direct control over the lending programmes of the 
Industrial Bank of Korea  (IBK) and the Korea Devel opment Bank  (KDB), it tends to use them as an 
arm of industry and regional development policy.  
26. Under what circumstances does the Korean Gove rnment fund loans made by the IBK and at 
what interest rates?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other financial 
measures: paragraph 145, page 75 
It is also stated that IBK does not maximize profits due to its public policy role.  
27. Can Korean authorities expand upon that explanation? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 146, page 75 
The report states that while the KDB does not extend loans at preferential rates to firms in specific 
industries, it is reported that lower interest ra tes are "seemingly available" for SMEs willing to 
relocate or for regional development purposes.  
28. Can Korean authorities provide further details?  
PART III. TRADE POLICIES AND PRACTICES BY MEASURE ;  (4) MEASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loan s, guarantees, and other financial 
measures: paragraph 146, page 75 
It is reported that KDB extends loans unde r the same conditions as commercial banks.  WT/TPR/M/204/Add.1 
Page 38  
 
  29. If so, then what is its purpose?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) Measures A
FFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 147, pages 75 and 76 
It is reported that the Government covers losses by the Korea Credit Guarantee Fund  (KODIT) and 
KIBO Technology Fund.  
30. Can Korean authorities provide details as to any losses by these funds that were covered by 
the Government in the period of review?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 147, pages 75 and 76 
Reference is also made to the Act on Trade Adjustment Assistance. 
31. Can Korean authorities provide details as to its recent use? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements: paragraph 80, page 60  
The Secretariat Report notes that one of the objectiv es of the National Standards Plan is to remove 
technical barriers to trade by improving the national conformity assessment system. 
32. a) Could Korea provide specific examples of how the national conformity assessment 
system has been improved and how such improvements have contributed to the removal of technical barriers to trade? 
b) Could Korea explain how it plans to further improve the national conformity 
assessment system and how such plans would contribute to the removal of technical 
barriers to trade? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements: paragraph 80, page 60  
The Secretariat Report notes that regulatory authori ties are to adopt, where possible, international 
standards when setting up or modifying technical or voluntary standards. 
33. a) Could Korea elaborate precisely how this  requirement has been incorporated in 
regulatory policy?  
b) How does Korea’s Regulatory Impact Assessment system provide for the evaluation 
of the impact of the adoption of natio nal versus international standards? 
c) How does Korea monitor the extent to which regulatory authorities apply the policy 
on the use of international standards?  WT/TPR/M/204/Add.1 
 Page 39 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;   (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements: paragraph 81, page 60  
The Secretariat Report notes Korea’s important achievements in harmonizing Korean standards with 
international standards. Canada congratulates Kor ea on its high degree of success; 61.4% of Korean 
standards had been subject to international ISO/ IEC harmonization and 30% to other international 
standards. 
34. a) It is reported that 2,945 standards ar e referenced in 65 regulations. Could Korea 
clarify whether this number refers to the sp ecific standards which are referenced in all 
regulations or to the number of times that standards have been cited in all regulations? 
b) Could Korea provide a comprehensive list of all standardization bodies, in addition to 
ISO and IEC, whose standards have been a dopted as the basis of Korean standards? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 86, page 61  
The Secretariat Report notes that tran sparency and the opportunity for interested parties to participate 
in the development or review process of Korean standards are ensured.  
35. a) Could Korea explain how transparency and the opportunity for in terested parties to 
participate in the development or review process of Korean technical regulations and 
conformity assessment procedures are ensured? 
b) Could Korea explain to what extent and how transparency procedures also apply to 
the benefit of foreign interested parties?  
c) Could Korea explain to what extent and on what terms foreign interested parties can 
participate in consultations regarding the development of technical regulations and 
conformity assessment procedures?  
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 89, page 62 
The Secretariat Report notes that environmental risk assessments for biotechnology crops are now 
mandatory, pursuant to recently enacted legislation implementing the Cartagena Protocol on Biosafety.  
36. a) Could Korea indicate which ministry or  agency is responsible for conducting 
environmental risk assessments?  
b) Could Korea elaborate on how it implem ents the Advanced Informed Agreement 
Procedure and Labelling? 
c) Could Korea provide additional informati on on the documentation and administrative 
requirements contained in its implementing legislation of the Cartagena Protocol on 
Biosafety? 
d) Could Korea provide information on ho w products for propagation, and those for 
food, feed and processing, are distinguished under this legislation? WT/TPR/M/204/Add.1 
Page 40  
 
  e) Could Korea confirm whether one a pplication could be submitted for the 
authorization of a genetically modified organism  (GMO) for propagation, and for 
food, feed and processing, or must a separate application be submitted for both?  Could Korea indicate to which agency or agencies the application (s) must be directed? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 89, page 62 
The Secretariat Report also notes that KDFA ha s the authority to conduct mandatory safety 
assessments to evaluate genetically modified or ganisms  (GMOs) in products used for human 
consumption. Canada unders tands that, in addition to the KFDA, four other Korean agencies are also 
responsible for the implementation, m onitoring and enforcement of the Act on the Transboundary 
Movement of LMOs .  
37. a) Could Korea elaborate on the roles of each of these four other agencies, and provide 
information on whether there is a central  coordinating agency responsible for 
oversight of the process?   
b) Could Korea explain which of these agencies are involved in approving genetically 
modified organisms for use in Korea, for both propagation and use for food, feed and processing  (for domestically produced GMOs and imports)? 
Part III. Trade Policies and Practices by Measure;  (2) M
EASURES DIRECTLY AFFECTING 
IMPORTS ;  (ix) Standards and other technical requirements; paragraph 92, page 62  
The Secretariat Report notes that the relevant regul atory authority processes certification for technical 
regulations using test reports fro m government-designated laboratories. 
38. a) What are the technical requirements for the designation of a laboratory by the 
government?  
b) Are foreign-based laboratories eligible for designation? Which regulatory authorities 
in Korea, if any, require that a laboratory be physically located in Korea in order to be 
designated and what is the justification for any such requirement? 
39. What are the technical requirements for the designation of a laboratory by the government? 
Are foreign-based laboratories eligible for designation? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2)  MEASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements; paragraph 94, page 63  
The Secretariat Report notes th at Korea’s accreditation bodies,  the KOLAS and the KAS, are 
signatories to a number of mutual recognition arrange ments  (MLAs), including ILAC, IAF and PAC.  
40. To what extent do regulatory authorities in Korea recognize test results and certificates 
traceable to foreign accreditation bodies who are also signatories to these MLAs?     WT/TPR/M/204/Add.1 
 Page 41 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix)  Standards and other technical requirements; paragraph 94, page 63  
The Secretariat Report notes that Korea is a member of the APEC MRA on Conformity Assessment 
of Telecommunications Equipment  (Phase I) and of Part I of the APEC Electrical MRA and that 
Korea is considering whether to participate in Parts II and III. 
41. Could Korea indicate what are its current plan s regarding participation on Phase II of the 
APEC TEL MRA? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technica l requirements; page 63, paragraph 95 
The Secretariat Report notes that Korea established a self-certification system for automobiles in 2003 
and that all new standards on safety were based on in ternational standards  (i.e. ISO/IEC, UN ECE, 
EU EEC and FMVSS).  
42. a) Could Korea confirm whether all new Korean automobile safety standards developed 
since the implementation of the self-certification system in 2003 correspond to an equivalent ISO/IEC, UNECE, EU EEC or  FMVSS international standard?  
b) Could Korea provide a list of each Korean st andard and, if available, its equivalent 
international standard? 
c) Could Korea explain what procedures and requirements must be met by foreign 
vehicle manufacturers in order to certify vehicles under the self-certification system?  
d) Is self-certification by foreign vehicle ma nufacturers to an equivalent international 
standard accepted by Korea?  
e) Canada understands that Korea adopted th e self-certification system in 2003 as part 
of its commitments under the Memorandum  of Understanding Regarding Foreign 
Motor Vehicles with the U.S., pending the adoption of Korea's new draft Regulation 
of Motor Vehicle Self-Certification a nd Manufacturing Defect Investigation. 
f) Could Korea confirm when this new draft regulation is expected to be finalized? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2)
 MEASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 108, page 66 
The Secretariat Report notes that mandatory biotechnology labeling requirements apply for 
genetically modified corn and soybeans as well as  for processed foods containing these products.   
43. a) Could Korea confirm that corn and soybeans are the only genetically modified 
products that require labeli ng under these requirements? 
b) Could Korea provide more information on the nature of the labeling requirements? 
c) In addition to the labeling requirement s, could Korea provide information on its 
import requirements and procedures for pr ocessed foods derived from genetically 
modified products? WT/TPR/M/204/Add.1 
Page 42  
 
  Part IV. TRADE POLICIES BY SECTOR;  (2) A
GRICULTURE ;  (ii) Policy developments; 
domestic support; paragraph 22, page 98  
Paragraph 22 references the estab lishment of a W2.1 trillion fund and disbursement of these funds to 
compensate some fruit producers affected by the Korea-Chile FTA.  
44. a) Could Korea please provide the amount of payment in each year from 2004 to 2007?  
b) In order to receive payments, were the producers required to retire permanently from 
marketable agricultural production? 
Part IV. TRADE POLICIES BY SECTOR;  (4)  ENERGY ;  (i) Petroleum and petroleum 
products; paragraph 47,  page 104 
Korea has benefited from the liberalization of trade,  and as an original member of the WTO plays an 
overall positive role in the advancement of interna tional trade objectives. However, Korea continues 
to have trade barriers in the forms of tariffs to cer tain products that include refine oil products and 
crude oil. 
45. Does Korea intend to take the necessary steps to reduce these trade distorting practices?  
Part IV. TRADE POLICIES BY SECTOR;  (4)  ENERGY ;  (i) Petroleum and petroleum 
products; paragraphs 49 and 50, page 104  
Paragraph 49 states that Korea is the world’s second and fourth largest importer of LNG and LPG 
respectively. The Secretariat also reports that there is an absence of a market-based system in the gas 
sector.  
46. Does Korea plan to promote a market appr oach for wholesale trade, including imports, 
storage, transmission and wholesale di stribution of LNG by pipelines?  
Part IV. TRADE POLICIES BY SECTOR;  (4)  ENERGY ;  (i) Petroleum and petroleum 
products;paragraph 60,  page 105 
The report indicates that domestic coal production continues to be supported by direct production 
subsidies. 
47. Does Korea have any plans for KEPCO to adopt a market-based approach and eliminate any 
form of production and consumption subsidies? 
Part IV. TRADE POLICIES BY SECTOR;  (5)  MANUFACTURING ;  (i) Automobiles; 
paragraph 65, page 109  
The Secretariat reports that imported vehicles a ccount for about 5% of the domestic automobile 
market in Korea, an increase of 111.7%. 
48. a) Can Korea elaborate on the factors that could have led to the recent increase in the 
import penetration of vehicles into Korea?  
b) Can Korea elaborate on the reasons why th e import penetration of vehicles in Korea 
remains very low compared to the other major vehicle producing OECD countries  
(which tends to exceed 40%), and on th e measures Korea plans to undertake to 
eliminate import barriers in its vehicle market?    WT/TPR/M/204/Add.1 
 Page 43 
 
 
  Part IV. TRADE POLICIES BY SECTOR;  (5)  MANUFACTURING ;  (i) Automobiles; 
paragraph 66, page 109  
The Secretariat reports that local automobile ta xes and the special excise tax are levied based upon 
engine capacity, with the highest rate app lied to cars with engines exceeding 2,000cc. 
49. Can Korea provide any information on its effo rts to reform/change its vehicle engine 
displacement taxes? 
Part IV. TRADE POLICIES BY SECTOR,  (6) S ERVICES ,  (v) Telecommunications;  
paragraph 112, page 121 
Paragraph 112 indicates that broadband access provi ders and CATV provide rs are designated as 
facilities-based operators with the convergence between telecommunicati ons and broadcasting 
services.  
Could Korea provide information on its regulatory regime with respect to access to these networks by 
competitive telecommunications service providers?  
CANADA – SECOND SET  
Report by the Secretariat  (WT/TPR/S/204) 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (6) T RADE  
AGREEMENTS AND ARRANGEMENTS ;  (i) Korea and the WTO; paragraph 20, page 23 
Canada thanks Korea for its response to question 3. 
Canada notes that certain FTAs to which South Ko rea is a Party contain provisions that allow 
specified amounts of outward processing to occur out side the territory of South Korea  (i.e., South 
Korea - Singapore FTA Article 4.4). 
1.  Given these provisions, what mechanisms are in place to track the value of production or 
operations that take place in North Korea, incl uding in the Gaesong Industria l Complex, on goods that 
are subsequently re-imported to South Korea for furt her production, to ensure that a good meets the 
applicable rule of origin when e xported to South Korea's FTA partners? 
2.  Are the goods that are produced, in part, pursu ant to the outward processing provisions found 
in some of South Korea's FTAs, including pertai ning to the GIC, deemed "South Korean Goods" 
under each respective FTA?  Are they, in any way, differentiated from South Korean goods that are 
not produced pursuant to outward processing provisions?   
3.  Are outward processed goods considered "South Korean Goods" if they are exported to a non-
FTA  (i.e. MFN) trading partner? 
Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2)  MEASURES DIRECTLY 
AFFECTING IMPORTS ;  (iv) Tariff quotas,  (a) Agricultural  tariff quotas; paragraph 59, pages 53 
and 54 
Canada thanks Korea for its response. WT/TPR/M/204/Add.1 
Page 44  
 
  4. Could Korea please clarify whether it has a st ructure in place to regularly monitor the 
numerous TRQ administration entities  (so they comply with GATT XIII and the Agreement on Import Licensing) and if so, to please describe in detail the method by which it does that. 
5. In that context, has Korea investigated  the auctioning requirements of these TRQ 
administration agencies; what documentation has b een requested from the ag encies to support these 
investigations?   
6. What, if any, changes have the agencies implem ented in their auctioning practices as a result 
of these investigations since 2004? 
Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures;  (b) Safeguards; General; paragraph 77, 
page 57 
Canada thanks Korea for its response to ques tion 14 concerning the application of safeguard 
measures.  
7. Can Korea provide a list of all agricultural a nd industrial products that were identified in 
submissions made by industry or government ministries/agencies requesting the instituting of a 
safeguard or provisional safeguard measure between 2004 and 2008?  
8. Can Korea indicate the total number of safeguard  (including provisional measures) 
investigations carried out by the KTC in the period from 2004-08, including from these submissions? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 89, page 62 
Korea requested that Canada provide a more specific question. 9.  Could Korea provide information on what administ rative steps exporters must take to be able 
to export GMOs to Korea? More specifically, could Korea provide information on:  
a) Precisely what documents are required at the border;  
 b) Whether there is a requirement for a border inspection/test and if so, information on 
 how Korea plans to carry out these inspections/tests.  
 c) Could Korea also provide information on whether there will be a set time limit for the 
  length of time any inspection/test at the border? 
10. Could Korea also provide information on whether there is a central coordinating agency 
responsible for oversight/coordination of th e departments listed in Korea’s response? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 94, page 63  
Canada would like to thank Korea for its response and has two follow up questions:  
11. Could Korea clarify whether the reference to "KOLAS-accredited organi zations" is actually 
meant to refer to "organizations  accredited by foreign accreditation bodies who are also signatories to 
the ILAC MLA"? If so, does Korea's response imply that the 26 laws of 6 government ministries are  WT/TPR/M/204/Add.1 
 Page 45 
 
 
  accepting test reports issued by organizations accredited by foreign accreditation bodies who are also 
signatories of the ILAC MLA? 
12. Could Korea also indicate whether KAS has no tified Korean regulatory authorities of the 
signatories of the IAF and PAC MLAs and to what extent regulatory authorities in Korea accept the 
certificates issued by organizations accredited by foreign accreditation bodies who are also signatories 
of the IAF and PAC MLA? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technica l requirements; page 63, paragraph 95 
Canada would like to thank Korea for its response for the questions 42 a) and d) and has two follow 
up questions.  
13. Of all the domestic safety standards developed or modified since 2004, could Korea please 
indicate which standards have been harmonized, which ones are currently being considered for 
harmonization, and which ones have  not been harmonized with international standards such as 
ISO/IEC, UN ECE, EU EEC and FMVSS? 
14. Could Korea please provide a list of all the UNECE and FMVSS standards to which 
manufacturers can self-certify under Korea's self-certification regime as well as the Korean standards 
to which they are considered equivalent? 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 108, 
page 66 
Canada would like to thank Korea for its response to question 43 b), and has one follow up question. 
Korea notes that soybean sauce, oil and corn s ugar are excluded from GMO labelling since these 
products are free of GMO ingredients after manufacturing.  
15. Could Korea confirm that all processed oils derived from GM oilseeds, which have no GMO 
ingredients after manufacturing, are also exempt  from labelling?  More specifically, would Korea 
confirm that Canola oil is exempt from the GM la belling requirements, given that canola oil derived 
from GM canola/oilseed rape has no GM ingredients? 
16. Regarding question 43 c), could Korea clarify th at imported canola oil would also be exempt 
from the requirement for the term "GMO" to be placed on the import certificate?   
Part IV - TRADE POLICIES BY SECTOR;  (2) A GRICULTURE ;  (ii) Policy Developments; 
Domestic Support; paragraph 22, page 98  
Korea states that 247 hundred million KRW was provided in 2004 as support through the 
W2.1 trillion FTA fund to compensate some fruit producers affected by the Korea-Chile FTA. 
Could Korea please indicate where this 247 KRW hundred million is notified in G/AG/N/KOR/37 for 
the 2004 year? WT/TPR/M/204/Add.1 
Page 46  
 
  HONG KONG, CHINA
 
Contingency measures 
(WT/TPR/S/204, page 56, para. 73) 
 
1.  According to the Secretariat Report, Korea amended its anti-dumping legislation in early 
2008 concerning its review process of anti-dum ping duties and calculation method of dumping 
margins. Would Korea provide more details of these amendments?   
 
Anti-dumping 
(WT/TPR/S/204, page 58, Chart III.4) 
 
2.  Note that Korea did not impose any new anti-dumping duty in 2007; yet, 15 new anti-
dumping investigations were initiated in the y ear, which were more than the number of new 
investigations in the preceding three years combin ed.  We would like to know why there was such a 
sharp increase.  Are there any special reasons or f actors, such as changes of government policies, rules 
or practices, that may have led to the significant increase? 
 
Banking and finance 
(WT/TPR/S/204, page 115, pa ra. 83; page 117, para. 90) 
 3. According to Korea’s services offers tabled to the WTO, a person may own up to 10% of the 
stocks of a bank  (up to 4% in case of non-financia l service business entity) and 15% of the stocks of a 
provincial bank without the special authorisation of the relevant authorities, whereas a person can own 
up to 100% of a bank and a provincial bank with the sp ecial authorisation of the relevant authorities.  
Would Korea confirm whether the aforesaid measures are reflection of Korea’s de facto  banking 
regime?  Regarding the special authorisation that needs to be sought from the relevant authorities for 
up to 100% ownership of a bank and a provinc ial bank, would Korea provide details on the 
authorisation criteria involved, particularly as to  whether they constitute any market access and 
national treatment restrictions?  
Insurance 
(WT/TPR/S/204, page 118, para. 95)  
4. As stated in the Secretariat’s Report, there are no barriers on foreign entry in respect of the 
insurance sector.  Yet some limitations are found to have been inscribed in Korea’s GATS schedule 
for the sector restricting the establishment of joint ventures as well as recruitment and employment of insurance professionals for life and non-life insura nce, reinsurance and retrocession.  Residency 
requirements for top executive personnel are also imposed for the whole sector.  We would be grateful 
to know whether the afore-mentioned restrictions are actually in place in Korea’s de facto  insurance 
regime.   
 
Telecommunications 
(WT/TPR/S/204, pages x & xi, para. 21)  
5. We note from the Secretariat’s report that  Korea has unilaterally liberalized foreign 
ownership in the telecommunications sector beyond its GATS commitments. We would be grateful if 
Korea could provide more details about th e relevant liberalization measure (s).  
  WT/TPR/M/204/Add.1 
 Page 47 
 
 
  Transport services and logistics-related services 
(WT/TPR/S/204, page 122, paras. 116 – 118) 
 6. According to the Secretariat Report, the Ko rean Government provides various financing and 
tax schemes to assist shipping companies.  It also plans to introduce a tonnage tax system and a ship 
investment company system to provide tax incen tives to private investor s in ships for lease to 
shipping companies. Would Korea enlighten us on whether these schemes are provided to both local 
and foreign private investors on a non-discriminatory basis?  ECUADOR
 
Informe de la Secretaría WT/TPR/S/204 I. EL ENTORNO ECONÓMICO 
 
1) I
NTRODUCCIÓN  
En el párrafo 2 se mencionan algunos factores que podr ían poner en peligro el  crecimiento potencial 
de Corea a largo plazo, como son la contracción de  la base manufacturera coreana, la productividad 
relativamente baja en el sector de servicios, la disp aridad en los ingresos, el envejecimiento de la 
población y la carga fiscal.  
¿Qué medidas se están tomando para neutra lizar los efectos de estos factores? 
4) P RINCIPALES ACONTECIMIENTOS EN RELACIÓN CON LA POLÍTICA ESTRUCTURAL  
i) Reforma fiscal 
2. De acuerdo al párrafo 14,  uno de los objetivos de la reforma fi scal de Corea es aumentar los 
ingresos fiscales ampliando la base imponible.  
¿Cuáles son los mecanismos se están utilizando para aumentar la base imponible? 
7) T ENDENCIAS Y ESTRUCTURA DE LA INVERSIÓN EXTRANJERA DIRECTA  
3. El párrafo 27 destaca la disminución de i nversión extranjera directa de 12.800 millones de 
dólares EE.UU. en 2004 a 11.200 millones de dólares EE.UU. en 2006. 
¿Para el Gobierno de la República de Corea, cuáles serían las causas para esta disminución de la 
inversión extranjera y qué medidas se están tomando para revertirlo? 
8) P ERSPECTIVAS  
4. Según el párrafo 29, el nuevo Gobierno se había propuesto alcanzar el 7 por ciento de 
crecimiento real anual del PIB, unos ingresos por  habitante de 40.000 dólares EE.UU. y transformar a 
Corea en la séptima economía más gr ande del mundo a más tardar en 2013. 
¿A la luz del actual contexto internacional, man tiene el Gobierno estas perspectivas de crecimiento 
económico? 
I. RÉGIMEN DE POLÍTICA COMERCIAL: MARCO Y OBJETIVOS 
5. El párrafo 58 se refiere a la  Oficina del Me diador en materia de Inversiones Extranjeras. 
¿Podría proporcionar mayores detalles respecto de la estructura, funciones y competencias de esta 
oficina? WT/TPR/M/204/Add.1 
Page 48  
 
  II. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
 
1) I
NTRODUCCIÓN  
6. El párrafo 5 indica que se mantienen subvenc iones directas a la exportación para reducir 
costos de comercialización de ciertos productos agrícolas. 
¿Cuáles son esos productos agrícolas? 
2) M EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
 i) Procedimientos aduaneros 
7. El párrafo 18 se refiere al Centro de De nuncia de Irregularidades Aduaneras y el Centro 
Electrónico de Denuncias de Corrupción y al Mediador de Aduanas.  
¿Podría proporcionar mayores detalles respecto de la estructura, funciones y competencias de estas 
dos oficinas? 
iii) Aranceles 
c) Aranceles "flexibles" 
8. El párrafo 36 hace referencia a los aranceles "flexibles". 
¿Podría profundizar en cuanto a los  mecanismos  y fundamentos mediante  los cuales este sistema 
opera?  
i) Contingentes arancelarios 
a) Contingentes arancelarios agrícolas 
9. En el párrafo 58 se afirma que el importante porcentaje de contingentes arancelarios no 
utilizados para algunos productos, a un siendo los derechos dentro del contingente relativamente bajos, 
indica que su administración y asignación, entre otros factores, pueden estar restringiendo las importaciones.  
¿Para el Gobierno de la República de Corea, cuál es serían las medidas prácticas que permitirían una 
mejor utilización de los  contingentes arancelarios? 
ii) Normas y otras prescripciones técnicas 
c) Marcado y etiquetado 
10. En el párrafo 106 se mencionan las nor mas sobre etiquetado de los alimentos. 
¿Existe una página web en la que esté publicada la  normativa vigente en cuanto al etiquetado de 
alimentos? 
2) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
i) Régimen fiscal b) Impuestos directos 
11. De acuerdo al párrafo 138, ciertas categorías de trabajadores extranjeros empleados en Corea 
que están exentos del impuesto sobre la renta.   WT/TPR/M/204/Add.1 
 Page 49 
 
 
  ¿Cuáles son esas categorías de trabajadores extranjeros? 
III. POLÍTICAS COMERCIALES POR SECTORES 
2) A GRICULTURA  
ii) Evolución normativa 
Ayuda interna 
12. Según el párrafo 24, se adoptaron varias medidas para aumentar los ingresos no agrícolas 
fomentando el agroturismo.  
¿Cuáles son las medidas específicas que se tomaron pa ra fomentar el agroturismo y qué resultados se 
han obtenido con su implementación? 
EUROPEAN COMMUNITIES  
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
WTO Secretariat's report, page 30, para. 42 
The Report outlines that Korea is pursuing FTAs with some major trading partners on a 'multi-track 
basis to establish and FTA network with large eco nomic blocs and newly emerging countries. It is 
currently negotiating with ASEAN, th e EC, Canada, Mexico, and India.' 
1. Could Korea further elaborate on how it intends to encourage sustainable development and 
core labour standards in the context negotiations with third countries? 
WTO Secretariat's report, page 26, para. 29 
The report indicates that an ASEAN-Korea FTA on goods was signed in August 2006 and 'entered 
into force on 1 June 2007 for Korea, Singapore, and Malaysia'. The EC notes that Korea has made an 
early announcement of the ongoing negotiations  of this Agreement, as established by the 
Transparency Mechanism.  
2. Could Korea indicate when it intends to notif y to WTO the bilateral agreements which are 
already in force?  
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ix) Standards and other requirements 
 
WTO Secretariat's Report, page 63, para. 96 
 
The New Excellent Product  (NEP) certification system provides government support and preferential treatment in Government procurement for produc ts manufactured with new technologies developed 
first in Korea or with innovative technologies improved from existing technologies.  3. Could Korea confirm whether the NEP certifica tion can be granted to a product incorporating 
technologies first developed outside Korea?  
4. Does government support affect only the research  phase or also to the commercialization of a 
product?  5. In what way does Korea grant preferential treatment in government procurement to NEP-
certified products? WT/TPR/M/204/Add.1 
Page 50  
 
  WTO Secretariat's Report, page 64, para. 101 
 
The report notes that Korea is a member of FAO/WHO Codex Alimentarius Commission  (Codex), 
World Organisation for Animal Health  (OIE) a nd FAO International Plant Convention  (IPPC) and 
that it applies animal and plant quarantine requi rements based on these international standards.  
 
6. Could Korea confirm whether the level of accepta ble risk to Korea is in this context defined 
according to scientific evidence and protocols in ternationally accepted taking into account the 
objective of minimizing negative trade effects?  
7. Are scientific criteria internationally accepted used to regionalise measures to protect animal 
health?   8. Are scientific criteria internationally accepted used  to consider a country free of a plague or a 
plant disease, after having been declared a risk area?  
WTO Secretariat's Report, page 65, para. 104 
 
The report indicates that Korea bans imports of liv e cattle, sheep and goats and certain products from 
countries where BSE is known to occur, including products from the EC. The World Organization for 
Animal Health  (OIE) Code provides for conditions under which beef and beef products can be safely 
traded from all countries. Most EC countries have now been classified by OIE as countries with 
"negligible risk" or "controlled risk". However, Ko rea allows beef imports from a country with the 
OIE status "controlled risk".   9. When would Korea allow the imports of beef  and other products from the EC and thus apply 
the same treatment as to other WTO members? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iii) Price controls and monitoring  
WTO Secretariat's Report, page 77, para. 155  
The EC notes that the Korean Customs Services ha s in May introduced a new policy of monitoring 
import prices. The EC understands that  this policy is stated to be pa rt of measures directed against 
inflationary pressures, and only targets imported products.  
10. Does Korea believe that imported retail produc ts contribute disproportionately to inflationary 
pressures, when compared to domestic products?  
IV. TRADE POLICIES BY SECTOR  
(5) M
ANUFACTURING  
(i) Automobiles 
 
WTO Secretariat's Report, page 109, para. 66  The EC notes that in the framework of the revision of corporate and income tax law, it is planned to 
limit the expenses for automobiles to 30 million won.  
 
11. Could Korea explain its intentions with regard  to a revision of the corporate and income tax 
law, and specifically with regard to the de ductibility of expenses for the purchases of cars?  
  WT/TPR/M/204/Add.1 
 Page 51 
 
 
  EUROPEAN COMMUNITIES – SECOND SET  
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
 
WTO Secretariat's report, page 31, para. 45 
 
The report indicates that Korea "expanded preferential duty-free access on selected imports of 3,790  
(six-digit HS2007) tariff items from 50 UN- defined least developed countries". 
 
Could Korea indicate the percentage of imports currently covered under this duty-free scheme for 
LDCs?  What is the proportion of covered imports in relation to total imports from LDCs? 
 
Which are the main beneficiary countries, in terms of largest volume and utilization rate? 
 Could the Parties confirm whether there are any TRQ in place?  Does Korea intend to take further steps to comply with Annex F of Hong Kong Declaration, requiring 
all developed and developing countries in a position to do so to provide DFQF of at least 97% of tariff 
lines? If not, why?  
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs procedures 
 WTO Secretariat's Report, page 41, para. 14  
The report indicates that most imports  (about 80%) are cleared after being taken into a bonded area; 
the average clearance times from port entry to release from a bonded warehouse was 3.45 days in 
2007.  
 Could Korea confirm whether the same number of  warehouses is available for both importers and 
domestic manufacturers, and that equal treat ment is ensured between these operators? 
 EUROPEAN COMMUNITIES – THIRD SET
 
 
The EC would like to thank the Delegation of Ko rea for written replies received on Wednesday and 
for today's presentation, which has addressed many i ssues raised by Members.  In the light of the 
written replies, we would like to raise some follo w up questions, concerning government procurement 
and price controls. 
 
1) Government procurement 
 
Follow up to question 3  
- Could Korea confirm that there is no other use of the NEP certificates in 
government procurement except for the procurement set aside for the SMEs? For example, could Korea confirm whether a procuring entity can require the NEP certificate as a proof of an innovative product/service?  
 WT/TPR/M/204/Add.1 
Page 52  
 
  2) Prices controls and monitoring 
 
Follow up to question 10  
- Could Korea elaborate more about the source of data of import prices it is monitoring 
and disclosing to public?  
 
 - Could Korea also explain the methodology of the exercise, and the criteria for the 
choice of products? 
 JAPAN
 
 
Secretariat Report  (WT/TPR/S/204) 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreement  
Question 1: page 30, paragraph 42 
 
(The Government Report  (WT/TRP/G/204) III . TRADE POLICY DEVELOPMENTS: 2004-2008  
(3) F
REE TRADE AGREEMENTS   (pages 18-21)) 
 According to the Secretariat report, Korea is pursu ing negotiations with other major trading partners 
on a "multi-track" basis to establish an FTA networ k with large economic blocs and newly emerging 
markets.  (1)  Please indicate Korea’s view on whethe r Korea will continue FTA negotiations on 
aforementioned "multi-track" basis. 
 (2)  Please explain how the Korean Government d eals with FTA negotiations with other trading 
partners such as Canada, ASEAN, EC, Mexico , India, Japan, China, Mercosur, Russia, 
Turkey and Peru. What priority does Korea give the above-mentioned countries? 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs  
Question 2: pages 49-50, paragraphs 36-42  
The Secretariat report explains that Korea applies temporary higher MFN duties  (termed as flexible 
tariffs) than those set at the customs tariff schedule. 
 
Please indicate the applied period of flexible tariffs , as well as, if any, the restriction on the longest 
applied period of flexible tariffs. 
 
Question 3: pages 49-50, paragraphs 36-42 
 
According to the Secretariat report, adjustment duti es are set annually by the Ministry of Strategy and 
Finances  (MOSF). The Customs and Tariff Delib eration Committee considers MOSF’s proposals, 
and if approved by the State Council, adjustment  duties are implemented by Presidential decree. 
  WT/TPR/M/204/Add.1 
 Page 53 
 
 
  (1)  In the aforementioned procedure, please e xplain the process for the Government to ask 
opinions from the third parties on the application of the adjustment duties to specific products. 
 
(2)  How does the Government of Korea publish its final decision on the adjustment duties? 
 
IV. TRADE POLICIES BY SECTOR 
(1) I NTRODUCTION  
 
Question 4: page 91, paragraph 5 
 
The Secretariat report explains, ‘despite some d ecline, state-ownership persists in financial, 
telecommunications, and transport services’. 
 Although the Japanese Government understands that  the Korean Government does not have any 
obligation to possess the shares of KT and does not  have any actual possession of them, please 
elaborate on the aforementioned description in the Secretariat report. 
 
(2) A
GRICULTURE  
(iii) Selected activities  
Question 5: page 99, paragraph 28 
 
The Secretariat report explains that a new dire ct income support mechan ism for rice producers 
consisting of a fixed and a vari able payments system has applied since the 2005/06 crop year.  
(1) Please indicate the requirements for producers and farmlands to which this direct income 
support is applied. 
 
(2) Please provide a specific understanding of Korea on how this mechanism is dealt with in the 
notification of Aggregate Measurement of S upport  (AMS) based on the WTO Agreement on 
Agriculture. In case that this m echanism is notified as green box policies , what sort of criteria 
in Annex 2 of the Agreement on Agricult ure is applied to this mechanism? 
 (3) Regarding products other than rice, please i ndicate whether Korea has implemented or has 
plans to implement any direct payment mechanis ms or similar mechanisms. Japan would also 
like to know whether or not Korea implements any similar mechanism to  the direct income 
support mechanism, which does not specify products to be supported. 
 
(6) S
ERVICES  
(v) Telecommunications 
 
Question 6: page 119, paragraph 101 
 
In 2008, the Ministry of Information and Communications  (MIC) and the Korea Broadcasting Commission  (KBC) were merged into the KCC to form a completely independent single regulatory 
entity, under the President's Office.  
 Could Korea explain in what way the function of  dispute settlement has been taken over from the 
former KCC to the newly established KCC  (for in stance, has a certain kind of committee been 
established inside the new KCC)? 
 WT/TPR/M/204/Add.1 
Page 54  
 
  Question 7: page 119, paragraph 103 
 
According to the Secretariat report, foreign investme nt in the sector is subject to a 49% ceiling, and 
under the Telecommunications Business Act, the KCC can prohibit a foreign shareholder from becoming the largest shareholder in KT. However, ow ing to an exception, the largest shareholder in 
KT is presently foreign. 
 Please provide a specific case to which the exception is applied.  Question 8: page 119, paragraph 103  
Japan understands that as a result of the agreemen t of Korea-U.S. FTA negotiations, the foreign 
indirect investment to basic telecommunication carriers is to be allowed up to 100%.  Please explain the current situation regarding the amendment of Telecommunications Business Law. 
 
Question 9: page 119, paragraph 103  As for the restriction of foreign cap ital participation, Japan is of the view that such a restriction should 
only apply to specific carrier s such as dominant carriers. 
 
Japan would like to be informed of the reas on why such restriction is applied to all 
telecommunications carriers equally in Korea.  Question 10: page 120, paragraph 104 
 
Please provide information on the scheme of handset  subsidies, together with the details of 
terminating the subsidies regulation in March 2008. 
 Question 11: page 120, paragraph 106  The Secretariat report explains ‘since July 2007, price discounts are permissible on sales of bundled 
products, such as local telephone, high-speed internet, and mobile services’. Japan  is of the view that 
such price discounts on sales of bundled products con cerns us to result in decreased competition, in 
case that specific carriers including dominant carriers make use of this system in order to shut other 
carriers out of the market.  
(1) Please explain the outline of this system, al so explain whether or not dominant carriers can 
make use of this system. 
 (2) Please explain the details of the fact that price discounts became permissible on sales of 
bundled products. 
 
Question 12: page 120, paragraph 107 
 
The Secretariat report states, ‘facilities-based prov iders are required to contribute 0.5% of the 
previous year's total revenues for the R&D expend iture fund, while dominant providers are required 
to contribute 0.75%’, and also explains that th e R&D contribution  (R&D expenditure fund) is 
managed by the Ministry of Knowledge Economy. 
(1) Please provide information on how this fund h as been spent, including fields of research, 
achievement and outcome. 
  WT/TPR/M/204/Add.1 
 Page 55 
 
 
  (2) Japan would like to know whether the Ministry  of Knowledge Economy is solely entrusted to 
use this fund, or whether there is any mech anism by which opinions from telecommunications 
carriers are reflected to the usage of the fund. 
 Question 13: page 120, paragraph 108 
 
Please provide the latest version of the interconnecti on agreements, highlighting four points such as  
(a) process and procedure for requesting and providi ng services related to interconnection,  (b) cost-
oriented rates,  (c) standard period for providing services, and  (d) terms of validity of interconnection 
agreement. 
 
Question 14: page 120, paragraph 108  
The Secretariat report says, ‘the KCC changed the interconnection pricing methodology in 2004 by 
implementing interconnection charges based on a long -run incremental cost methodology  (LRIC), the 
new methodology is applicable to interconnecti on of local, long-distance, and mobile services’. 
(1) Japan would like Korea to explain the details of introducing interconnection charges of 
mobile phone based on a long-run incr emental cost methodology  (LRIC). 
 (2) Could Korea clarify whether the LRIC is al so applied to interconnection charges of other 
mobile carriers than dominant carrier SKT? 
 Question 15: page 121, paragraph 110 
 
According to the Secretariat report, universal se rvice includes provision of subsidized services for 
low-income and disabled customers. 
 
Please explain the outline of this service.  Question 16: page 121,  paragraphs 111-112 
 
In relation to the convergence between telecommuni cations services and broadcasting services, Act of 
internet and multimedia broadcasting business  (IPTV Ac t) was approved at the end of the last year in 
Korea.  (1) Please provide a specific explanation on the current situation and future direction of 
implementing measures to promote this industr y, including fair competition among contents, 
as well as measures to develop contents business. These measures are stipulated in article 19 
of IPTV Act. 
 (2) Please explain the trend and current situati on regarding the standardization of the IPTV 
related technologies in Korea. 
 
Question 17: page 121,  paragraphs 111-112 
 
Please give us a specific explanation on the current s ituation and future direction of how to deal with 
intellectual property rights such as copy rights of co ntents which are provided to internet multimedia 
and are broadcasted through the internet multimedia. 
 WT/TPR/M/204/Add.1 
Page 56  
 
  (vi) Transport 
 
Question 18: page 122, paragraph 117 
 
According to the Secretariat report, the Govern ment plans to introduce a tonnage tax system. 
 
(1) Although Japan understands that Korea has alr eady introduced a tonnage tax system in 2005, 
please clarify the description of the Secretariat report. 
 (2) If Korea has already introduced a tonnage tax system, Japan would like to know how this tax 
system has had influence on maritime transpor t business in Korea  (for instance, increasing 
the number of ships of Korean registry and number of Korean crew). 
 Question 19: page 122, paragraph 117  
According to the Secretariat report, the Governme nt plans to introduce a ship investment company 
system designed to provide tax incentives to pr ivate investors in ships for lease to shipping 
companies.  Japan would like to have a detailed explanation on these tax incentives. 
 
Question 20: page 122, paragraph 117 
 
The Secretariat report describes that most maritime  auxiliary services, including tug services, freight 
forwarding, and maintenance and repair services are provided by the private sector. 
As for Maritime freight forwarding services and Mari time agency services, Japan would like Korea to 
explain the details of reservations on mode 3 of  Korea’s specific commitment in GATS which is 
based on the Korean Commercial Law.  
JAPAN – SECOND SET
 
 The Secretariat report explains that Korea applies temporary higher MFN duties  (termed as flexible 
tariffs) than those set at the customs tariff sch edule. Thanking for the responses from Korea on 8
th, 
Japan would like Korea to provide more specific information to the follow-up questions, as follows. 
 
(Korea’s response to the Japan’s written question 2) 
 According to the Koreas response on 8
th, Korea has converted flexible tari ffs into general tariffs if the 
flexible tariffs have been imposed on goods for a long time.  
 
(1) Please indicate more specific case in which Kor ea converts flexible tariffs into general tariffs. 
 
(2) Please explain specific case in which the flexib le tariffs have been imposed on goods ‘for a 
long time’. Japan also would like to understand th e reason why the flexible tariffs have been 
imposed on goods ‘for a long time’ 
 
(Korea’s response to the Japan’s written question 3  (1)) 
 As Korea’s response on 8
th does response to a part of the Japan’ s question  (it just indicates names of 
third parties), please indicate more specific process fo r the government to hear opinions from the third 
parties.   WT/TPR/M/204/Add.1 
 Page 57 
 
 
  COLOMBIA  
 
PREGUNTAS 
 
II. REGIMEN DE POLITICA COMERCIAL: MARCO Y OBJETIVOS 
7)  R EGIMEN DE INVERSIONES EXTRANJERAS .  
 
"49. La Ley de Fomento de las Inversiones Extran jeras  (FIPA) permite todos los tipos de IED, 
incluidos  el establecimiento de nuevas empresas, la compra de acciones de empresas existentes, las 
fusiones y adquisiciones, con un 10 por ciento de  participación extranjera, como mínimo;  y los 
préstamos a cinco años o más de sociedades extranjer as matrices o filiales.   Corea cumple el Código 
de Liberalización de los Movimientos de Capital y el Código de Liberalización de las Operaciones 
Corrientes de Invisibles y el Instrumento de Trato Nacional". 
 
- ¿En qué consiste el Código de Liberalización de las Operaciones Corrientes de 
Invisibles? 
 "53. Según las autoridades, las concesiones fiscales  pueden ser decisivas en la  captación de IED 
entre países similares, y la mayoría de los bene ficiarios establecidos en Corea indican que tales 
incentivos han facilitado las inversiones extranjeras.   Sin embargo, estos resultados no tienen en 
cuenta si se habrían realizado tales inversiones sin los incentivos.  Todos los incentivos a la inversión  
(con independencia de que beneficien a inversores extranjeros o nacionales) conllevan el riesgo de 
subvencionar inversiones eficientes, que no necesi tan asistencia y se habrían realizado de todas 
formas  (con las consiguientes ganancias imprev istas para los inversores a expensas de los 
contribuyentes), o peor aún, de hacer rentables al gunas inversiones ineficaces.   Por consiguiente, los 
incentivos fiscales pueden contribuir a una asignación ineficaz de los recursos en Corea.   La 
rentabilidad de los incentivos fi scales es también cuestionable.  Tales incentivos pueden ir en 
detrimento de la contabilidad pública y la transpar encia fiscal, especialmente, como sucede en Corea, 
si no existe información detallada sobre los ingr esos sacrificados a causa de los diversos incentivos 
fiscales o una evaluación sistemática de la eficacia de tales incentivos.  Por consiguiente, es necesario 
prestar atención para que los costos financieros y de eficiencia de los incentivos a la inversión no 
superen sus beneficios declarados.  Las autoridad es indican, inter alia, que los incentivos fiscales se 
otorgan durante un máximo de siete años y que se hacen esfuerzos por asegurar la transparencia del 
sistema de incentivos y por replantear los criteri os para el otorgamiento y la duración de los 
incentivos".  
- ¿Cuál ha sido el costo fiscal por la aplicación de las medidas para incentivar las 
inversiones extranjeras?  
 
- ¿El gobierno asume directamente el detrim ento fiscal? O ¿Es trasladado al mercado 
local? 
 "54. La IED no está sujeta a autorización gubernam ental.  Los inversores extranjeros únicamente 
deben realizar una notificación prev ia, que puede cursarse en las oficinas de bancos nacionales o 
extranjeros en Corea, en Invest Korea o cualquier otro centro de comercio del Organismo de Fomento 
del Comercio y la Inversión de Corea  (KOTRA) en el extranjero.   Las sociedades con capital de participación extranjera deben tamb ién registrarse para poder benefici arse de incentivos. No obstante, 
se requiere la aprobación del MKE para realizar i nversiones en 90 sociedades designadas relacionadas 
con la defensa;  entre ellas figuran muchos de los grandes conglomerados de la electrónica y la 
industria, que son también destacados fabricantes de productos no relacionados con la defensa". 
 
- ¿Qué autoridad está encargada del cont rol de las inversiones extranjeras?  WT/TPR/M/204/Add.1 
Page 58  
 
  - ¿Qué ente lleva la información estadística sobre IED?  
 
- ¿Está reglamentado el aporte de información relacionada con IED? 
 "58. La Oficina del Mediador en materia de Inve rsiones Extranjeras, entidad independiente cuya 
creación corresponde al Presidente con sede en el KOTRA y dotada con personal de Invest Korea, 
tramita las reclamaciones concretas de los inversor es extranjeros establecidos en Corea, y gestiona 
con Invest Korea un Servicio Asiste ncial de Inversiones que dispensa atención individualizada.  Corea 
es miembro del Centro Internacional de Arreglo de Diferencias relativas a Inversiones  (CIADI) y del 
Organismo Multilateral de Garantía  de Inversiones  (OMGI).". 
 
- ¿Invest Korea es una entidad pública, privada o mixta?  
 "60. Corea ha firmado acuerdos bilaterales de inve rsión  (incluidos acuerdos de libre comercio) 
para la protección de IED con 95 países;  82 de e llos están en vigor.  Los inversores extranjeros no 
están sujetos a la doble imposición siempre que su pa ís de origen haya rubr icado un convenio para 
evitar la doble imposición con Corea;  76 países han firmado convenios con Corea, 70 de los cuales 
están en vigor.  Corea prevé ampliar la red de esos convenios bilaterales a países de la Comunidad de 
Estados Independientes, América Latina y África para promover las corrientes transfronterizas de capitales.".  
- ¿Con qué países ha firmado acuerdos  bilaterales de inversión?  
 
- ¿Cuáles son los objetivos que persi guen con la firma de estos acuerdos? 
  III.  POLITICAS Y PRACTICAS COMERCIALES, POR MEDIDAS 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
i) Procedimientos aduaneros.  
 
"10. Corea ha continuado la racionalización y mode rnización de sus procedimientos aduaneros y 
ha fortalecido la protección en frontera de los derecho de propiedad intelectual y contra la 
falsificación en el marcado de origen…."  
- ¿Podría Corea compartir su experiencia en éste tema y explicar brevemente las 
medidas que ha adopta do para tal efecto? 
"11. Solamente los expedidores, agentes de aduanas, asociaciones o empresas pueden hacer 
declaraciones de importación…".  
- ¿Cuáles son las razones que se tuvieron en  cuenta para no permitir que las personas 
naturales presenten por si mismas una declaración de importación?  
"16. Desde agosto de 2005, el KCS  (Servicio de  Aduanas de Corea) aplica inspecciones aduaneras 
más rigurosas sobre los productos agrícolas… debido al aumento de las importaciones causado por declaraciones de importación subvaloradas..."  
- ¿En que otro tipo de productos, diferentes a los agrícolas, se han detectado 
declaraciones de importación subvaloradas?  
- ¿Qué tipo de medidas adicionales ha pe nsado adoptar Corea para combatir el 
problema de la subfacturación?  
"18. El KCS ha elaborado una Guía para la Inte gralidad, que incluye la firma, en marzo de 2005, 
del  "Pacto de Integridad entre la Aduana y las Empresas…" la cual es considerada como una herramienta exitosa para el bue n desempeño de la aduana.   WT/TPR/M/204/Add.1 
 Page 59 
 
 
  - ¿Podría Corea ampliar la información sobre éste programa?  
A lo largo de la sección se ha sostenido que Co rea tiene uno de los sistemas aduaneros mejor 
desarrollados del mundo, que cuenta con un eficiente programa de gestión de riesgos y auditoria, así 
como un buen programa de integridad para los func ionarios aduaneros. En el párrafo 20 se hace 
referencia a los esfuerzos que hace Corea para di fundir en todo el mundo las técnicas aduaneras 
avanzadas del KCS.  
- Felicitamos a Corea por éste esfuerzo y lo invitamos a que comparta y reproduzca sus 
conocimientos y mejores practicas  en otras regiones del mundo.  
"25. … El KCS estableció en agosto de 2007, el sistema "SIREN, un sistema de alerta inmediato 
destinado a bloquear las importaciones subvaloradas de  productos agrícolas, plantas y productos de la 
pesca…"  
- ¿Ha pensado Corea en extender este program a a otra clase de productos que puedan 
haber presentado problemas de subfacturación?  
"51. Corea ha adoptado la medida de sustituir el otorgamiento de preferencias arancelarias a 
cambio de la firma de acuerdos bilaterales y regionales".  
- ¿Además de México y Mercosur Con qué otros países de América Latina está 
planeando Corea suscribir TLC’s y cual sería el cronograma previsto? 
 
ix) Normas y otras prescripciones técnicas.  
 
- ¿Corea cuenta con un inventario de reglam entos técnicos, que incluya todos aquellos 
que están vigentes?  
 
- ¿Existen reglamentos emitidos por organismos sectoriales y locales?  En caso 
afirmativo, ¿Han sido notificados? 
 "81. El sistema de normalización de Corea consiste en reglamentos técnicos  (normas obligatorias) 
elaborados por ministerios y organismos gubern amentales, y normas  (voluntarias)  ("normas 
coreanas") establecidas por la KATS…. En 2007, la distribución de las normas coreanas por sectores 
era la siguiente: productos químicos, prendas de v estir y cerámicas  (24 por ciento); maquinaria  
(18 por ciento); electricidad  (15 por ciento); acero, minería y construcción  (13 por ciento); 
transporte, construcción naval y aeronáutica  (10 por  ciento; industria de la información  (8 por 
ciento); y salud, alimentación, etc.  (12 por ciento)…." 
 
- ¿Cuál es la distribución en el caso de los reglamentos técnicos? 
 "84. Se procede prioritariamente a la arm onización de las normas para productos de nuevas 
tecnologías, incluida la tecnología de la información y los servicios…". 
 
- ¿Qué porcentaje de las normas que no están armonizadas representan aquellas 
referentes a  estos productos? 
 "86. … Se asegura la transparencia y la opor tunidad para que las pa rtes interesadas puedan 
participar en los procesos de elaboración o revisión de las normas coreanas…"  
 
- Sucede lo mismo en el caso de los reglamentos técnicos? 
 
"90. …La KFDA puede exigir a las empresas farmacéuticas extranjeras que repitan las pruebas clínicas en Corea para poder contar con datos de pruebas de primera mano..." 
 WT/TPR/M/204/Add.1 
Page 60  
 
  - ¿No ha considerado Corea que esta medida  puede interpretarse como un obstáculo 
técnico al comercio? 
 "91. … Se exige una inspección de calidad efectua da por el importador de los cosméticos con 
arreglo a los números de los lotes.". 
 
- ¿La inspección de cosméticos con arreglo al número de lotes, que se exige a los 
importadores, podría considerarse una prác tica discriminatoria respecto de los 
productores extranjeros? 
 
"93. En 2007, el KATS proyectaba establecer un si stema modular de evalu ación de la conformidad 
para el sistema obligatorio de certificación"  
- ¿En qué consiste el sistema modular de ev aluación de la conformidad que el KATS 
proyectaba establecer en 2007 para el sistema obligatorio de certificación? 
 
- ¿Ya se estableció el mencionado sistema m odular de evaluación de la conformidad? 
- En caso negativo, ¿Cuáles fueron las razones para no adoptar dicho sistema? 
 "94. Corea también es miembro del Acuer do de Reconocimiento Mu tuo del APEC sobre 
Evaluación de la Conformidad del Equipo de Tel ecomunicaciones  (Fase I) y de la parte I del Acuerdo 
de Reconocimiento Mutuo del APEC  sobre Evaluación de la Conformidad del Equipo Eléctrico y 
Electrónico…"  
- ¿Corea está considerando adherir al acue rdo de reconocimient o mutuo del APEC 
sobre evaluación de la conformidad de  alimentos y productos alimenticios? 
 
"95. …En la esfera de la certificación de automóviles, en virtud de un sistema de autocertificación en vigor desde 2003, los vehículos deben eti quetarse por los fabricantes o importadores son 
responsables de los defectos de los productos…"  
- ¿Cómo es el control posterior en el caso de los automóviles, que se rigen por un 
sistema de autocertificación? 
 "98. Para seguir agilizando la entrada de alimen tos importados, la KFDA ha reformado su sistema 
de inspección y que ha suprimido las pruebas de  laboratorio periódicas de productos agrícolas y 
aditivos de alimentos y de productos alimenticios elaborados cuando se trata del mismo alimento 
procedente de una misma empresa. .." 
 
- Se entiende que cuando no se trata del mism o alimento procedente de una misma 
empresa las pruebas aún se practican. ¿Existen estos controles para los productores nacionales? 
 
- ¿Corea realiza estudios de impacto cuando elabora sus reglamentos técnicos? ¿Sobre 
qué aspectos? 
 
x) Contratación pública  
 "111. Cierta parte de la contratación pública se lleva a cabo por un organismo centralizado, el 
Servicio de Contratación Pública )PPS).  La  función de este Servicio se está modificando 
progresivamente, y con ello la responsabilidad  de la contratación se descentralizará a los 
organismos…"  WT/TPR/M/204/Add.1 
 Page 61 
 
 
  - ¿Cuáles fueron las razones para la creación del Servicio de Contratación Pública  
(PPS)? 
 
- Actualmente, ¿Cuáles son las razones para su desmonte progresivo a través de 
mayores responsabilidades en cabeza de  las entidades contratantes? 
 
4)  M EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
vi) Derechos de propiedad intelectual  
Derechos de autor y derechos conexos 
 
"185. La protección del derecho de autor está a car go del Ministerio de Cultura, Deportes y Turismo  
(Ley de Derecho de Autor de 1957).  La modifi cación introducida en esta Ley en 2005 incorporó 
derechos de transmisión interacti vos para los artistas intérpretes o ejecutantes y los productores de 
fonogramas, así como los titulares de derecho de auto r, en conformidad con el Tratado de la OMPI 
sobre Interpretación o Ejecución y Fonogramas.   También amplió la protección de los derechos 
conexos y estableció derechos de transmisión pública y derechos de transmisió n digital de sonidos a 
fin de proteger nuevos tipos de obras.  Se aclararon cuestiones relativas a la responsabilidad de los 
proveedores de servicios en línea en caso de infr acción del derecho de autor.  Se prohibió la 
producción y el suministro de dispositivos o servicios  que permitan eludir la tecnología de control de 
copias y se introdujo un sistema de aviso y desmantela miento para ofrecer ince ntivos jurídicos a fin 
de que los proveedores de servicios en línea clausu rasen rápidamente los materiales infractores a 
solicitud del titular del derecho.  La s bases de datos no originales gozan de protección sui generis.  En 
2007 se modificó el Decreto de aplicación de la Ley de  Derecho de Autor para facilitar el uso de obras 
amparadas por el derecho de autor en el entorno digital.".  
- ¿Bajo qué condiciones se está facilitando el uso de obras amparadas por el derecho de 
autor en el entorno digital?  
 
- ¿Supone esto la implementación de exce pciones, limitaciones y/o licencias 
obligatorias en este entorno? 
 
- ¿Cuál es el alcance de la expresión "s onidos" y a qué otro tipo de obras se hace 
referencia? 
 
- ¿Cuáles son las condiciones de otorgamiento  de licencias obligatorias en materia de 
derecho de autor?  
 
- ¿En qué casos se otorgaron licencias obligatorias y cuál fue el impacto de la medida? 
 
"186. En opinión de un importante interlocutor comerc ial de Corea, las modificaciones de la Ley de 
Derecho de Autor aún dejan impreciso el alcance  de la responsabilidad de los proveedores de 
servicios y las limitaciones y ex cepciones de esa responsabilidad.
4  La nueva ley no resuelve las 
anteriores imperfecciones de la protección de las gr abaciones de sonido ni las excepciones relativas a 
la copia privada.  Las autoridades afirman que, como las transmisiones digitales de sonido tienen 
aspectos similares a la radiodifusión, la Ley de De recho de Autor establece derechos de remuneración 
"razonables" para las transmisiones digitales de sonido en favor de los productores de fonogramas, 
como los que se otorgan para la radiodifusión.  Además, en lo que respecta a las excepciones 
referentes a las copias en el medio universitario, las modificaciones de la Ley de Derecho de Autor 
limitan el propósito de la utilización a los "fines de us o en clase"  (en lugar de los anteriores "fines de 
enseñanza"), y restringen el alcance del uso a "partes de una obra"  (en lugar de "la totalidad o parte 
de una obra").  La modificación también impone el pago de regalías por el uso.  Las autoridades 
                                                      
 4 USTR (2007). WT/TPR/M/204/Add.1 
Page 62  
 
  afirman que la limitación del derecho de autor en favor de las universidades es muy limitada y 
razonable." 
- Se refiere a un derecho de transmisión interactiva a favor de los artistas intérpretes o 
ejecutantes, pero no lo hace expresamente r especto al autor, no obstante afirma que 
"el derecho de autor aplica a las transmisiones interactivas".  ¿Cuál es la razón de este trato diferencial? 
 
"187. Los programas informáticos están protegidos en virtud de una ley especial  (la Ley de 
Protección de los Programas de Ordenador de 1986, administrada por el Ministerio de Cultura, 
Deportes y Turismo).  La Ley fue modificada por última vez en octubre de  2006 para ampliar las 
facultades del Comité de Protección del Derecho de Au tor en el Soporte Lógico de Corea  (SOCOP) y 
establecer sanciones por la violación de diversas leyes sobre propiedad intelectual.
5  Los derechos de 
transmisión fueron introducidos en diciembre de 1998.  Con las revisiones aplicadas el 1º de julio 
de 2003 aumentó la responsabilidad de los proveedor es de servicios de Internet en los casos de 
infracción del derecho de autor.  El titular tiene  el derecho exclusivo de copiar programas 
informáticos, con la salvedad de las copias temporales.  La protección de los programas se concede durante 50 años a partir del año si guiente a su publicación.  Se permiten reproducciones mínimas si no 
perjudican en forma irrazonable los intereses económ icos del titular del dere cho;  este criterio se 
aplica tanto a las obras extranjeras como a las nacionales.  La Ley de Protección de los Programas de Ordenador dispone expresamente la posibilidad de otorgar licencias obligatorias  (por ejemplo, 
cuando el titular del derecho no puede ser identifica do o encontrado, con sujeción a ciertos requisitos 
de procedimiento).  No se ha concedido ninguna licencia de ese tipo." 
- ¿Qué se entiende por "reproducción mínima" de un soporte lógico? 
 
- ¿Cuáles son las condiciones de otorgamiento  de licencias obligatorias en materia de 
soporte lógico? 
 
IV. POLITICAS COMERCIALES POR SECTORES 
2) A
GRICULTURA  
 
"10. La liberalización de las importaciones en el marco de las negociaciones de la OMC y de 
diferentes acuerdos de libre comercio es uno de los retos más importantes que tiene que afrontar el 
sector agrícola…  Corea tomó medidas para co mpensar a los agricultores afectados por los 
compromisos de liberalización asumidos en los acuerdos de libre comercio que ha suscrito recientemente." 
 - ¿En qué consisten estas medidas de compensación?  
 
 - ¿Cuál es la naturaleza de este fondo?  
  - ¿De donde provienen los recursos?   
 - ¿Quienes son los beneficiarios y en qué montos?  
 
 - ¿Se ajusta a los compromisos de Corea en la OMC? 
 
"11….  Además, el coeficiente de utilización de lo s contingentes arancelarios es aproximadamente del 
69 por ciento en promedio;  los contingentes arancelarios, o bi en se utilizan, administran y asignan 
por entidades de comercio estatal,  o bien por asociaciones industriales   eso plantea la posibilidad de 
                                                     
 
 5 USTR (2007).  WT/TPR/M/204/Add.1 
 Page 63 
 
 
  conflictos entre sus intereses importador es y los de sus miembros agrícolas.6  Los productores 
nacionales de arroz, principal cultivo básico, se si guen beneficiando principalm ente de una restricción 
cuantitativa a la importación, que se seguirá aplica ndo hasta 2014;  también se aplican restricciones 
cuantitativas a la exportación desde 2007  (para la cebada hasta 2008,).  Durante el período que se 
examina, Corea ha utilizado periódicamente las dispos iciones de salvaguardia especial previstas en el 
Acuerdo sobre la Agricultura de la OMC.  Se otorgan subvenciones a la exportación para 
determinados productos agrícolas con la finalidad de  reducir los costos de comercialización de los 
exportadores. 
 - ¿A que se debe la baja utilización de los contingentes arancelarios  (69%). Corea 
cumple sus compromisos multilaterales en materia de contingentes arancelarios? 
 
 - Se señala que "los contingentes arancelarios,  o bien se utilizan, administran y asignan 
por entidades de comercio estatal, o bien por asociaciones industriales.  Eso plantea la posibilidad de conflictos entre sus inter eses importadores y los de sus miembros 
agrícolas". ¿Cuáles son las razones de este posible conflicto de intereses? 
  - ¿La administración por asociaciones industriales es compatible con los compromisos 
OMC? 
 
8. "15.  El nivel de los pagos directos por pr oductos específicos en relación con el sostenimiento 
de los precios del mercado financiados por el cons umidor aumentó de alrededor del 1 por ciento de 
ayuda a los productores en 1986-1988 al 9 por ciento en 2004-2006 y el 9,6 por ciento en 2006.  Esos pagos totalizaron 2,3 billones de won en 2006  (1,5 billones en 2004);  los pagos públicos, incluida la 
prestación de servicios generales de apoyo, ascendieron a 5,7 billones de won en 2006  (frente a 4,7 billones de won en 2004).  Los pagos direct os, a condición de que estén suficientemente 
desconectados de la producción, causan una distor sión mucho menor que el sostenimiento de los 
precios de mercado, que por estar basado en la producción, distorsiona el comercio y la producción 
sobre todo al contribuir a un exceso de producción.  Corea no tiene sistemas de pagos directos 
basados en la producción propiamente dichos, sino que los efectúa en función de la renta agrícola 
total, la superficie plantada o el número de anim ales, así como el uso de insumos.  No obstante, 
aunque probablemente esos pagos causan menos dist orsión que la ayuda basada en la producción, esas 
subvenciones estimulan la producción y el uso de insumos, por lo que distorsionan el comercio 
agrícola con efectos potencialmente adversos para  el medio ambiente, aunque vayan acompañados de 
nuevos planes para contribuir a reducir esos efectos  nocivos.  … prácticamen te todos los pagos por 
superficie están condicionados a la adopción de  prácticas agrícolas respetuosas con el medio 
ambiente.  Estos sistemas incluyen los pagos dir ectos para prácticas agrícolas respetuosas con el 
medio ambiente mediante la re ducción de abonos y plaguicidas…" 
 - ¿Podría informar Corea en qué productos se incrementaron los pagos directos y las 
ayudas a los ingresos agrícolas?  
 
 - ¿Cuál es la razón de fortalecer estas ayudas?  
  - ¿Cuál es el impacto que las mismas han tenido en el desempeño del sector 
agropecuario?  
 
 - ¿Cumplen con las normas de la OMC? 
 
En términos generales surge la siguiente inquietud:    
                                                     
 
 6 De todos modos, las autoridades indicaron que las asociaciones industriales administran los 
volúmenes de los contingentes arancelarios para los que la demanda interna es superior a la oferta;  por consiguiente, es importante coordinar las opiniones entr e los importadores interesados.  Además, consideran 
improbable que puedan producirse conflictos entre los importadores y los productores de estos productos. WT/TPR/M/204/Add.1 
Page 64  
 
  - ¿Qué restricciones a la exportaci ón existen y en qué productos?  
  - ¿Están plenamente justificadas y cumplen las normas OMC? 
 
6) S
ERVICIOS  
i) Características generales  
"72. Entre 2004 y 2007, las exportaciones de servicios no atribuibles a los factores crecieron a una tasa media anual del 12,6 por ciento, superando los 63.000 millones de dólares EE.UU.  (alrededor del 
17 por ciento de las exportaciones de mercancías).  Sin embargo, en el mismo período, las 
importaciones de servicios crecieron a una tasa media anual próxima al 17 por ciento, debido a lo cual 
el déficit en los servicios aumentó de 8.100 millones a 20.600 millones de dólares EE.UU.  El transporte y los viajes son los servicios  objeto de un comercio más intenso." 
 
- ¿Cuáles son las razones que explican el déficit comercial de servicios?  
- ¿Qué sectores de servicios son los que registran un mayor nivel de importación que 
de exportación? 
 
ii) Compromisos globales en el marco del AGCS 
 
"73. Corea ha asumido compromisos en 98 de los 155 sectores definidos en el AGCS.  En lo que 
respecta a la presencia comercial se ha consignado una limitación a la participación extranjera del 
49 por ciento para el suministro de servicios de telecomunicaciones básicas.  Para poder prestar servicios profesionales, tales como servicios jurídi cos, de contabilidad y servicios de auditoría y 
asesoramiento fiscal, han de ser aprobados en Corea los títulos de aptitud extranjeros.  El acceso a 
otros servicios, como la publicación de periódicos diar ios y de otro tipo y las actividades de agencias 
de noticias, está sujeto a diferent es limitaciones a la participación extranjera.  Por otro lado, según el 
informe relativo al plan de acción individual de Co rea para 2006, el mayor interés de Corea en la 
esfera de los servicios es la liberalización de los servicios de infraestructura, como el transporte marítimo, la construcción, las telecomunicaciones,  los servicios de distribución y los servicios 
financieros."  
- ¿Además de los sectores de telecomunicaciones básicas, publicación de periódicos y 
agencias de noticias, existen otros sectores de  servicios en Corea en los que se limite 
la participación de capital extranjero? 
 
- ¿El plan de acción individual de Corea para 2006, cuyo mayor interés en la esfera de 
los servicios es la liberalización de los servicios, entre ellos las telecomunicaciones, 
prevé la eliminación de la limitación a la participación extranjera del 49% para el 
suministro de servicios de telecomunicaciones básicas? 
 
iii) Servicios bancarios y financieros 
 "75. El sector financiero representó el 8,9 por ci ento del PIB en 2007 y su contribución al empleo 
en la economía fue del 3,4 por ciento en 2006  (no se dispone de los datos correspondientes a 2007), 
lo que significa que la productividad de la mano de obra en el sector es mucho mayor que en el conjunto del sector de los servicios.  El sector fi nanciero ha sido objeto de reformas y de una 
reestructuración, que han modificado sustancialmente el comportamiento de los bancos, que ahora se 
ocupan más que anteriormente de la rentabilidad y la competitividad." 
 
- ¿Anteriormente cuál era la preocupación central de los bancos, tomando en 
consideración la afirmación " (…) que ahor a se ocupan más que anteriormente de la 
rentabilidad y la competitividad"?  WT/TPR/M/204/Add.1 
 Page 65 
 
 
  a) Estructura y propiedad 
 
"77. Desde el último Examen de las Políticas Come rciales de Corea, el Gobierno ha proseguido la 
desinversión en los bancos.  Entre las desinversi ones más importantes cabe señalar la reducción de la 
participación de la Sociedad de Se guros de Depósitos de Corea  (KDIC)  en el grupo financiero Woori, 
la venta del Korea First Bank  (en el que el Estado  tenía una participación mayoritaria) al Standard 
Chartered Bank y la liquidación de la participación del Estado en el Hana Bank.   Por otra parte, la 
participación extranjera en los bancos coreanos ha aumentado significativamente, sobre todo en los 
casos del Citigroup y el Standard Chartered.  Las autoridades indicaron que no hay presencia del Estado en las instituciones financieras no bancarias.  La participación extranjera se limita a una caja 
de ahorros y 13 empresas especializadas en el crédito   (que representan casi el 11 por ciento de los 
activos totales de dichas empresas)."  
- ¿La desinversión del Gobierno en los banc os obedece a una política particular que 
Corea haya implementado para tal fin? 
 
v) Telecomunicaciones 
 Características generales y estructura del mercado 
 
"107. En 2005 se modificó el proceso de concesión de licencias.  Ahora, las empresas que se basan 
en la utilización de instalaciones pueden solicitar una licencia en cualquier momento  (anteriormente 
sólo podían hacerlo durante dos períodos en el transc urso del año).  Además, el plazo para examinar 
las solicitudes de licencia se ha reducido en uno o dos meses.  Para obtener una licencia, los 
proveedores basados en la utilización de instalaciones deben presentar un plan empresarial, un plan de 
ventas, un plan tecnológico y un plan de I+D.  Una vez obtenida la licencia, estos proveedores deben 
aportar el 0,5 por ciento de sus ingresos del año ante rior al fondo de financiación de las actividades de 
I+D.  En el caso de los proveedores dominantes, la contribución es del 0,75 por ciento de los ingresos.  
Los operadores de telecomunicaciones que paga n un canon por la utilización del espectro de 
frecuencias están exentos, al igual que aquellos que sufrieron pérdidas netas o cuyos ingresos del año 
anterior no hubieran superado los 30.000 millones de  won.  El MKE es el organismo encargado de 
administrar la contribución para I+D." 
 
- El párrafo anterior explica el proceso de concesión de licencias para las empresas que 
se basan en la utilización de instalaciones, pero no explica el régimen de licencia para la reventa. ¿Cuál es el proceso  de concesión para las empresas que van hacer reventa? 
 
Reporte del Gobierno WT/TPR/G/204 
 
2) I
NVERSIÓN Y COMERCIO EXTERIOR  
 
19. Desde 2004, Corea ha experimentado un ligero desc enso de la inversión extranjera directa.  
No obstante, las entradas anuales de IED se han mantenido en niveles elevados, superiores a los 
10.000 millones de dólares EE.UU.  (cifras cuantifi cadas sobre la base de las notificaciones).  El 
Gobierno de Corea ha adoptado medidas activas, como el recorte de los impuestos sobre las 
sociedades y la reducción del período de evaluación  de las marcas de fábr ica o de comercio, para 
estimular la IED mediante la desreglamentación y mejorando los medios para  la promoción de las 
inversiones.  Según la OCDE, el índice de restricci ón reguladora de la IED de Corea es inferior al 
nivel medio de la OCDE, lo que demuestra un nivel más alto de apertura en el sector de la IED.  La 
desreglamentación continúa ocupando un lugar priorita rio en el programa del Gobierno coreano.  En 
2008 se puso en marcha el Consejo Presidencial sobr e la Competitividad Nacional.  Su principal WT/TPR/M/204/Add.1 
Page 66  
 
  objetivo es crear un entorno más propicio para las actividades comerciales eliminando los obstáculos 
innecesarios que dificultan la inversión.  
- ¿En qué consiste la política de desreglamentación?  
 
 - ¿Cuál ha sido el resultado obtenido desde su implementación? 
 
CHINESE TAIPEI
 
 
A. WTO Secretariat Report  (WT/TPR/S/204) 
 
SUMMARY OBSERVATIONS  (3) T
RADE POLICY DEVELOPMENTS  
Page viii, Paragraph 10 
 We note that an early warning system for undervalue d customs declaration of agricultural, forest and 
fisheries products was introduced in August 20 07 to block their under-invoices importation into 
Korea. 
 
Could Korea please provide us with the details of the said system and an evaluation of its 
effectiveness after one year of implementation? 
 
I. ECONOMIC ENVIRONMENT 
(7) T
RENDS AND PATTERNS IN FOREIGN INVESTMENT  
Page 12, Paragraph 27 
 Korea’s FDI inflows reached US$ 12.8 billion in 2004 but declined to US$11.2 billion in 2006. 
Inward FDI as a percentage of GDP declined from 1.2% in 2004 to 0.4% in 2006. 
 
FDI inflows to Korea were concentrated mainly in manufacturing and services, while wholesale and 
retail services had attracted markedly less by 2006.  FDI inflows in manufacturing have been quite 
volatile even though the business environment has been improving and certain restrictions on FDI 
have been lifted.   
Could Korea please inform us of its strategies and plans for attracting more FDI inflows? 
 Page 12, Paragraph 28 
 
Korea’s FDI outflows rose considerably from US $6 billion in 2004 to US$ 9.9 billion in 2006. More 
than half was invested in other Asian countries, par ticularly China, due mainly to Korean firms taking 
advantage of the comparatively lower wages in China and other Asian countries.  However, the RMB continues to appreciate, and investment laws and regulations have been 
continuously promulgated or revised in China si nce 2007, creating difficulties for FDI companies to 
face. 
 
Could Korea please describe its strategies and plans for assisting Korean firms investing in China? 
 
(8) O
UTLOOK  
Page 16, Paragraph 29  Low productivity in the services sector is a serious  impediment to Korea’s growth. We understand 
that the Korean government has announced the in troduction of its "Service-PROGRESS" programme.  WT/TPR/M/204/Add.1 
 Page 67 
 
 
  Could Korea please provide details of the cont ent of the "Service-PROGRESS" programme, and 
describe specifically how it seeks to increase productivity and to e nhance the competitiveness of the 
services industry and create employment? 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(1)  I NTRODUCTION  
Page 18, Paragraph 3 
 
The Report states that "…several tax and othe r incentives are reserved for foreign-invested 
companies.  Moreover, action  has been taken to improve both the business and the living environment 
for foreign invested companies and their employees."   Please describe the main idea and the essential details of the above-mentioned action for our 
reference.  
 
(5) T
RADE LAWS AND REGULATIONS  
Page 21, Paragraph 18 
 According to the report, a Presidential decree, "regulation on concluding FTAs," was introduced in 
June 2004 to ensure transparency for any FTA negotiations. 
 How has the regulation helped to make information on FTAs more transparent, and what are its actual 
effects?  (6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional agreements 
Pages 25&26, Paragraphs 25&28 
 We note that Korea has pursued and concluded inte nsive negotiations on FTAs with its major trading 
partners. At the same time, regional economic integr ation is also an important topic on the APEC 
agenda.  1.  Could Korea please provide its views on the po ssibilities of promoting regional integration in 
APEC on the basis of P4, ASEAN+1 or ASEAN+X? 
 
2.  Could the APEC integration process eliminat e the "spaghetti-bowl" effects created by the 
proliferation of bilateral FTAs? 
 
(6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements 
Page 31, Paragraph 44 
 
We read in the Report that, "[t]he authorities i ndicate that Korea has not yet witnessed any negative 
side-effects due to FTAs and recognize that administration is the key to their success."  Could Korea please provide further information on how the effects of FTAs are analysed and what 
criteria are used to select its FTA partners? 
 
(7) F
OREIGN INVESTMENT REGIME  
Page 32, Paragraph 51 
 Korea’s investment regime is applied on an MFN basis. Howeve r, under the Korea-United States 
FTA, telecommunications and transportation are exempt from MFN. WT/TPR/M/204/Add.1 
Page 68  
 
  Could Korea please explain why these sectors were kept exempt from MFN? 
 
Page 32, Paragraph 51  Foreign investors in Korea enjoy more favourable tax treatment and selection of business sites than 
nationals, and are assured national treatment a nd freedom in performing FDI activities, except as 
provided in other laws. No FDI restrictions are a llowed, unless they threaten national security, public 
order, public health, environmental preservation, or social morals, or are restricted by the FIPA or 
under other legislation, such as the Fisheries Act,  Maritime Act, and Telecommunications Business 
Act.  
While the restrictions on FDI inflows in Korea ha ve been widely reduced, and more favourable 
treatment has also been provided to foreign invest ors, all of the treatment mentioned above comes 
with the qualification "except as provided in other laws
". 
 Could Korea please provide a list of the laws containing provisions that serve as the exceptions? 
 
Page 33, Paragraphs 54-55 
 
While government approval of FDI is  not required, prior notification by foreign investors is needed, 
and foreign-capital invested companies must register to be eligible for incentives. In addition, foreign 
companies can establish local branches subject to notif ication and registration as a foreign- investment 
company. 
 Could Korea please provide details of:   1.  its framework and procedures for FDI applications; and, 
 
2.  the relevant measures concerning prior notification and registration?  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
 
(v) Export finance, guarantees, and insurance Page 70, Paragraphs 123-124 
 According to the report, the Export-Import Bank  of Korea provides export guarantees and trade 
finance to Korean firms and foreign buyers to s upport export activities, which cover mainly capital 
goods, such as ships and machinery. The Korean gove rnment also plans to support exports by the 
services industry.  Please could the Korean government provide details  of its specific measures to assist the knowledge-
based services industry to expand their overseas market? 
 
(vi) Export promotion and marketing Page 71, Paragraph 125  
Most of Korea’s export promotion activities are th e responsibility of the State-owned Korea Trade 
and Investment Promotion Agency  (KOTRA). We  understand that the Korean government has also 
established the Korea Business Center  (KBC) to in tegrate support for the export activities of small 
and medium-sized enterprises.   WT/TPR/M/204/Add.1 
 Page 69 
 
 
  We would appreciate having further informati on on the exact purpose of the KBC and how it 
operates. 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Financial assistance 
(b) Subsidies 
Page 76, Paragraphs 149&150 
 Korea uses grants, tax concessions or concessional loan s to assist a range of agricultural, forestry, 
fishing, manufacturing R&D, and environmental prot ection activities  (no expiry date was indicated 
for the notified schemes except for th e specified items). Furthermore, plans are in place for further tax 
benefits and other incentives as well as the channel ling of unused private-sector funds into corporate 
R&D financing projects.  1.  Could Korea please elaborate further on the measure for funding manufacturing R&D. For 
example, what is the average funding percentage for each case, and what  are the criteria for 
application?  2. Is there a funding programme specifically desi gned to support the private R&D sector of 
semiconductor and photovoltaic products? 
 
(iii) Price controls and monitoring 
Page 77, Paragraph 155 
 1. Besides the 19 items indicated in the Repor t, do central and regional governments have 
authority to adjust the electricity rate? 
 2.  To cope with the impact of recent price hik es on fuel generation, what measures, such as 
raising the electricity rate or imposing the fu el adjustment surcharge, could be taken? 
 
(iv) State-owned enterprises and privatization 
Page 77, Paragraph 156 
 
1.  Is there any timetable for the privatization of the 24 SOEs? 
 2.  Will there be any limitations on foreign investor s’ participation in the privatization process? 
 (v) Competition and consumer policy 
Page 79, Paragraph 157 
 
The Report indicates that, "KFTC started implemen ting its ‘Business Review’ in December 2004: 
from December 2004 to December 2007, it reviewed  70 cases, and notified the companies of the 
results."  
 1.  Please could Korea explain the purpose and describe the contents of the "Business Review"?    
 2.  What effects has the KETC’s review had on companies? WT/TPR/M/204/Add.1 
Page 70  
 
  IV. TRADE POLICIES BY SECTOR 
(4) E
NERGY  
Page 103, Paragraphs 43-45 
 We note from the report that in 2006 Korea imported around 96.5%  (2006) of its energy 
requirements, and oil accounted for 43.6% of its ener gy sources. Furthermore, Korea plans to realize 
"universal energy services" across the nation by 2016 so that no citizen will be excluded from the 
systematic expanded energy welfare scheme.   Could Korea please provide a brief explanation of  the content of the above-mentioned plan and 
elaborate further on its scheme and overall energy policy in response to increasing international oil 
prices. 
(6) S
ERVICES  
(v) Telecommunications 
Page 121, Paragraph 110  
1. Could Korea please provide more information on how the universal service funds provide grants for people with low incomes or with disabilities?  
 2. How does the LRIC system calculate the cost of universal service and the ratio of expenses 
that carriers should share? Also, could Korea pleas e provide further details of the LRIC system? 
 
B. Government Report  (WT/TPR/G/204) 
 
II. ECONOMIC DEVELOPMENTS: 2004-2008 
(1) D
OMESTIC ECONOMIC SITUATION  
Page 7, Paragraph 11  Due to factors such as the surge in  the price of oil, the consumer price index  (CPI) has increased 
rapidly since October 2007, even reaching a high of 5.9 percent in July 2008.  
 What measures are being taken by the Korean  government to fight against inflation? 
 
(2) E
XTERNAL TRADE AND INVESTMENT  
Page 10, Paragraph 21 
 
The report indicates that Korea’s outbound FDI, main ly towards China, has increased rapidly since 
2004, while inward FDI has been decreasing since 2000.  In fact, net foreign direct investment  
(inward FDI minus outward FDI) in 2007 was minus US$ 9.84 billion.  1.  What measures are the Korean government taking to cope with the movement of its industries 
offshore?  
 2.  Has any measure been taken to encourage its  industries to diversify in terms of the 
destinations of their outbound FDI? 
  WT/TPR/M/204/Add.1 
 Page 71 
 
 
  CHILE  
 OBSERVACIONES RECAPITULATIVAS  4) E
VOLUCIÓN DE LAS POLÍTICAS SECTORIALES  
 
1. El párrafo 19 del Informe de la Secretaría señ ala que se han hecho esfuerzos para reducir la 
sobrepesca, a pesar de que se han seguido otorgando subvenciones relacionadas con la pesca y se ha 
aumentado la captura total permisible en aguas co reanas.  Asimismo, se han establecido derechos de 
ajuste para nueve especies de peces con el fin de proteger a los productores nacionales de alimentos 
marinos.  
 Aparte de los derechos de ajuste , ¿Se han hecho otro tipo de esfuerz os adicionales para reducir la 
sobrepesca? ¿Cuáles serían estos y en qué consistirían? 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 2 M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
iii) Aranceles 
 
2. ¿Cuándo tiene Corea contemplado cons olidar el 100% de su arancel?  
 
3. Con respecto a los "aranceles flexibles"  (párra fo 36), ¿podría Corea explicar sobre qué base 
toma las decisiones de variabilidad?  ¿Piensa Corea,  rebajar o eliminar estos aranceles en el corto 
plazo, independiente de lo que  suceda en la Ronda Doha?  
 
viii) Medidas especiales 
 
4. En el párrafo 73 se señala que la legislación de Corea en materia de medidas comerciales 
especiales y las prácticas de la KTC no han tenido ca mbios de importancia durante el período objeto 
de examen.  Una modificación de comienzos de 2008 estipuló que el proceso de examen de los 
derechos antidumping debe llevarse a cabo de manera idéntica a la investigación inicial y  se modificó 
el método de cálculo del margen de dumping. ¿Podr ía explicar en qué consiste tal modificación y 
cómo se calcula el margen de dumping?  
ix) Normas y otras prescripciones técnicas.  
5. ¿Tiene Corea algún mecanismo de coordinaci ón con todas las instituciones que elaboran 
reglamentos técnicos y procedimientos  de evaluación de la conformidad? 
6. Además del sistema de alerta al exportador, ¿existe algún otro mecanismo de coordinación 
sobre estos temas con el sector exportador? 
7. ¿En relación a lo indicado en el párrafo 92, existe algún sitio Web donde sea posible 
encontrar los reglamentos técnicos y procedimient os de evaluación de la conformidad obligatorios 
que deben cumplir los productos para p oder ser comercializados en Corea? 
8. En relación a los Acuerdos de Reconocimiento  Mutuo suscritos  (párrafo 95), ¿son estos 
costosos de implementar?  
¿Qué requisitos deben cumplir los organism os que evalúan la c onformidad para ser 
designados por la autoridad del país exportador?  
¿Cómo se administran los incumplimientos?  WT/TPR/M/204/Add.1 
Page 72  
 
  ¿Existe la posibilidad de que terceros países puedan incorporarse? 
x) Contratación pública. 
 
9. La Ley de Promoción de Producto s Amigables con el Medio Ambiente  (environmentally 
friendly products)  de 2004 establece que los organismos gube rnamentales y empresas estatales deben 
priorizar en sus contrataciones los productos amigab les con el medio ambiente. Dicha ley -que entró 
en vigencia en julio de 2005-,   se aplica tanto a organismos del Gobierno Central como a organismos 
de la Administración Local y a empresas vinculadas c on dichos organismos.   La Ley hace obligatoria 
la adquisición de productos amigables con el medio ambiente, pero establece excepciones por motivos 
de calidad y disponibilidad, así como  para adquisiciones de emergencia.  
 
¿Podría la Corea proporcionar mayores anteceden tes sobre la forma en que los organismos 
gubernamentales y las empresas estatales determin an -cuando realizan contrataciones públicas de 
bienes y servicios-, cuáles productos son amigables para el medio ambiente?  
 
¿Cuáles son los criterios utilizados?  
 
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO . 
v) Política de competencia y de  consumo 
 
10. ¿Contemplan las leyes de competencia de Corea programas de denuncias compensadas para mejorar la detección y fiscalización de los carteles duros? 
 11. ¿Existe un programa en Corea para la paulatin a eliminación de las excepciones a la ley de 
competencia?  
12. ¿Existe separación entre la agencia investiga dora y fiscalizadora y el organismo encargado de 
aplicar la ley de competencia y determinar sanciones?  
PAKISTAN
 
 
1) Korea maintains quantitative restrictions on import of Rice despite very high bound tariffs. 
We would appreciate if the Government of Kore a could let us know any plans to review such 
quantitative restrictions? 
  
2) Korea has a liberal trade policy regime; howev er there are certain issues such as strict SPS 
measures which are acting as quasi non-tariff barriers for countries like Pakistan where the technology 
and processing facilities are less developed. Could th e Korean government apprise us with any plans 
for mutual cooperation/technical assistance in order to overcome these technological gaps?  
THAILAND
 
 
Investment and services 
 1. On page vii of the Report by the Secretaria t, under Summary Observations, paragraph 5 on 
Economic Environment, it is stated that 3 sectors re main completely closed to foreign investors and 
that 26 are partially restricted.  While on page 36, Table II.4 on FDI restricted sectors, 2008, it is mentioned that only 2 sectors are wholly closed to FD I, while 25 are partially closed.  Please clarify 
this discrepancy. 
  WT/TPR/M/204/Add.1 
 Page 73 
 
 
  2. On page 16 of the Report by the Secretariat, it is mentioned that there is low productivity in 
the services sector which impedes ROK’s growth.  Kindly share the reasons behind such low productivity in the services sector.  3. On page 91 of the Report by the Secretariat, it is mentioned that ROK has unilaterally 
liberalized its foreign ownership regime in telecommunications beyond its GATS commitments.  
Please outline which activities have been unilaterally  liberalized in the telecommunications sector? 
 4. On page 121 of the Report by the Secretariat, under broadcasting services, please elaborate on 
the screening quota system applicable to foreign suppliers. 
 
FTA compensation fund 
 
5. How and by what means does Korea allocate th e FTA Compensation Fund to the affected 
sectors?  Would this Compensation Fund be counted  in the Domestic Support calculations to be 
reported to the WTO? 
 
Tariff quota administration 
 
6. Since tariff quotas are administered by STEs or indu strial associations with a current fill ratio 
of approximately 69 percent, is it possible to explai n how the quota is administered and if there is any 
plan to reform the quota administration so that a higher fill ratio can be achieved? 
 7. We note from page 54, paragraph 60 of the Secretariat Report that different mechanisms 
are used for quota allocation and administration depending on the product.  In this regard, we would appreciate it if ROK could clarify the mechanisms used for quota allocation and 
administration for major agricultural products such as rice and cassava products. 
 
Net agricultural support 
 
8. Even though a shift from the previously high Producer Support through product-specific 
Market Price Support to Direct Payment Systems can be considered more market-oriented, the 
Income Support System is still linked with produc tion and input use.  ROK’s net agricultural support 
is the highest among the OECD Members.  Is there an y plan to reform this direct payment system to 
be less trade distorting?   
High applied MFN tariff in agricultural products 
 9. Given the higher demand in agricultural pr oducts, witnessed by the higher imports of 
agricultural products to ROK and the decline in  cultivated area due to urban and industrial 
development, is the government considering reform  on the tariff structure for agricultural products? 
 
Standards and other technical requirements 
 10. We note from page 60, paragraph 81 of the Report by the Secretariat that roughly 9 per cent 
of Korean standards have been estab lished without any reference to in ternational standards.  In this 
regard, we would be interested to know what sp ecific groups or product categories are covered by 
these non-harmonized standards.  Does ROK envisag e that the remaining non-harmonized standards 
can be more fully harmonized with intern ational standards in the near future? 
 11. According to pages 60 and 61  (paragraphs 80, 81  and 86) of the Report by the Secretariat, 
the Korean standardization system consists of tec hnical regulations  (mandato ry standards), which in 
2006 represented 15 per cent of total KSs, and volunta ry standards set by KATS.  Furthermore, the WT/TPR/M/204/Add.1 
Page 74  
 
  Report states that the number of Korean industrial standards has doubled over the last five years.  
That said, one of the key policy goals of national st andards is to remove technical barriers to trade, 
and it is further maintained that "Korea-specific" st andards are not prepared, adopted or applied with 
a view to creating unnecessary obstacl es to international trade.    
 
(1) In view of the burgeoning increase in the number of industrial standards adopted in 
the past years, could ROK confirm that such a rapid increase is not in any way synonymous with heightened restriction on foreign goods?  
 (2) Please clarify whether, for any imported products failing to conform to voluntary 
standards set by KATS, this will put them at a disadvantage, or raise the possibility 
of the said products being less favourably treated vis-à-vis locally produced goods. 
12. In 2005, ROK conducted its first auction for th e importation of table rice for retail sale using 
US rice as the standard specification requirement.  Could ROK please explain the reason for using US 
rice as the basis for setting the standard for imports of rice?  Would it be possible for ROK to instead 
use Thai rice as the standard specification for the auction? 
 
Traceability – food safety  
13. Traceability and GAP has been in troduced to ensure the food safety for the consumers in 
ROK.  This has, however, created a barrier to the current flow of trade between Thailand and ROK.  
Thailand is interested in learning more about th e detailed implementation of the schemes.  Is any 
possibility for the Korean government to introdu ce cooperative projects to promote knowledge of and 
compliance with these systems and thus, facilitate trade between the two countries?  
Fresh, frozen and processed poultry 
 14. ROK requires that all factories producing fresh, frozen and processed poultry must pass 
standards set by the Food and Drugs Administration.   However, ROK has fail ed to send officials to 
inspect factories in Thailand in order to grant the required certification.  Does ROK have a plan for 
the inspection of factories in Thailand in the near future?  
 End-use requirements  
15. ROK applies an end-use requirement for imports of certain  products for specific use.  For 
example, tapioca powder is imported only for use in the textile, paper and glue industries.  Rice is 
imported for use in the processing industries.  Long ans are imported to make herbal medicines and 
imports of natural rubber must only be used in the industrial sector.  What principle reasons are given 
for applying such measures and what method is used to select items to be subject to these measures? 
 16. ROK requires that imports of dried longans for use in producing medicine must receive prior 
permission from the Medicine Manufacturers Association  (MMA).  However, since ROK categorizes dried longans as having medicinal qualities, all imports of dried longan must therefore receive 
permission from the MMA, whereas in fact, Thaila nd believes that the purpose of dried longans are 
primarily for use in the food industry.  Since a number of products could have multiple-uses, does 
ROK have any plan to revise these requirements?    WT/TPR/M/204/Add.1 
 Page 75 
 
 
  INDIA  
 
Question 1 
 
WTO Secretariat in Chapter II paragraph 35 observes: 
 
"The negotiation of FTAs has been contentious.  It has aroused public interest and debate and 
politicized Korea’s international economic policy and given rise to strong opposition by domestic 
interest groups, thus obliging the authorities to a dopt adjustment measures in support of companies 
that seem seriously injured by FTA-created import competition." 
 
What are the measures that have been taken by Korea to educate the Korean citizens about the 
benefits of bilateral FTA agreements?  
Question 2 
 The inward flow of FDI has reduced from 11,243 million USD in 2006 to 10,514 million USD in 
2007.  Clearly the steps taken for improving the overall investment environment is not building 
enough confidence among the foreign investor. 
 
(a) What is the Korean strategy to attract more investment? 
(b) What are the measures taken by the Kor ean government to attract FDI in retailing 
sector? 
(c) Does Korea have any plans to open the television and radio broadcasting sectors to 
foreign direct investment? 
 
Question 3  
WTO Secretariat in Chapter III paragraph 187 observes: 
 "According to a major trading partner, the Copyright  Act amendments still leave unclear the scope of 
the underlying liability of service providers and the li mitations on, and exceptions from, liability.  The 
new law does not address previous shortcomings in sound recording protection and private copying 
exceptions….."  
(a) What is the next step in Korea’s IP R strategy to refine its copyright laws? 
(b) Is there any structured dialogue in place with foreign authorities and Korean right-
holders? 
(c) How effective is Korean system agains t counterfeit and pirate d goods at importation 
and transit? 
(d) What are the steps that have been taken to raise awareness against violation of all 
types of IP rights? 
 
Question 4  
WTO Secretariat in Chapter IV paragraph 6  observes: 
 
"Despite receiving relatively high protection, agricultur e’s GDP share has continued to fall.  The share  
(including forestry and fishing) declined from 3.8% in 2003 to 3.3% in 2006; it also accounted for a 
declining share of total employment  (7.7% in 2006) .  The sector’s labour productivity is little more 
than half of the national average.  Agriculture’s  low labour productivity reflects several factors, 
including Korea’s high proportion of older farmer s, small-scale farming, and lack of capital 
investment, which hampers its overall efficiency, an d thus competitiveness.  Despite intensive efforts WT/TPR/M/204/Add.1 
Page 76  
 
  to increase the cultivated area through drainage, irri gation, and reclamation, the cultivated area has 
tended to decline due to industria l and urban development.  In 2005, a quarter of the value of the 
agricultural production consisted of rice.  While self-sufficiency h as been attained for some major 
products, such as rice, the volume of Korean imports of agricultural products has increased strongly, inter alia, as a result of rapid income growth, ch anges in dietary patterns, and agricultural trade 
liberalization.  Korea is a significant net food importer.   In 2007, its agricultural trade deficit could hit 
a record US$13.65 billion fuelled by a rise in in ternational grain prices and high domestic demand." 
 The Korean agricultural rates are ve ry high.  Despite being a leader in exports, Korea still remains 
very protective about its auto and agri-industries. 
 
(a) Will Korea in future change its po licy towards these two sectors and open up? 
 
Question 5 
 
WTO Secretariat in Chapter IV paragraph 74 observes: 
 
"In the ongoing negotiations, Korea submitted a revise d offer in May 2005, under which it improved 
its sector-specific section in: business services, distri bution, education, telecommunications, transport, 
and financial services.  It also offered to wide n the scope of specific commitments by addressing 
intra-corporate transferees and contractual service suppliers in its horizontal mode 4 section." 
 
Korean people would benefit from services liberal ization but the Korean domestic policy does not 
support liberalization in the English language t eaching areas, doctors, nurses and other professionals. 
 (a) Does Korea have any plans to open up these areas at least bilaterally though 
Economic Partnership Agreement to  give access to the professionals? 
 (b) State interventions persist in key areas such as telecommunication and financial 
sectors.  Is Korea planning to have any st ructural changes for privatization of these 
sectors to improve overall competitiveness? 
Question 6 
 (Report by Republic of Korea) paragraph 25 states: 
 
"Since the 1997 financial crisis, the Korean govern ment has undertaken comprehensive corporate 
structuring.  As a result, the debt-to-equity ratio  has fallen from nearly 400% before the 1997 crisis to 
around 100% in 2004.  Even though corporate governance has been significantly improved since the 
1997 crisis, Korea has taken further steps to upgrad e corporate governance.  In 2005, class action suits 
in securities-related cases against large firms with ass ets of at least 2 trillion won were allowed, and 
this permission was extended to cover all listed fi rms in 2007.  In addition, amendments to the 
Commercial Act were proposed in 2007 to incr ease the accountability of managers and controlling 
shareholders to minority shareholders.  The pr oposed amendments include, among other things, a 
prohibition against corporate directors using their corporate authority for their own or a third party’s 
benefit."  
(a) When is the proposed amendment to the Commercial Act  (2007) going to be 
implemented? 
 
(b) What are the benefits that are expected  to accrue from the proposed amendments to 
RoK? 
  WT/TPR/M/204/Add.1 
 Page 77 
 
 
  Question 7 
 
 (Report by Republic of Korea) paragraph 31 states: 
 
"Since the inception of the WTO, Korea has faithfu lly implemented its commitments and obligations 
under the WTO.  Korea has been successful in bringi ng its laws and regulations into conformity with 
WTO norms.  In some areas, Korea has even undert aken voluntary liberalization and reform measures 
beyond the level of its commitments."  
(a) What are the areas in which Korea is planning to voluntarily liberalize and bring 
about reform measures beyond the levels of its WTO commitments? 
 
Question 8 
 
(Report by Republic of Korea) paragraph 32 states:  
"……With a view to providing substantial market access for products from least-developed countries  
(LDCs), Korea currently provides LDCs with unila teral  (non-reciprocal) duty-free and quota-free 
preference for 75% of its national tariff lines."  
(a) Which are the countries benefiting out of Korea’s LDCs policy for providing 
substantial market access? 
 
Question 9 
 
What steps have been taken to reduce non-tariff barriers for free flow of trade?  
Question 10  
 
WTO Secretariat in Summary Observations paragraph 9 observes: 
 "The 2008 customs tariff remains relatively complex, involving a multiplicity of rates  
(83 ad valorem , 41 alternate duties) often having small ra te differences and involving decimal points." 
 How does Korea justify rate differences at the level of decimal points? Will not  small rate differences 
at the level of decimal points reduce tran sparency of the customs tariff regime? 
 Question 11   
WTO Secretariat in Chapter II paragraph 16 observes: 
 "By December 2007, the Regulatory Reform Task Fo rce  (RRTF) under the Prime Minister's Office 
had drafted 1,822 detailed improve ment plans relating to 68 strategic areas;  the RRTF facilitates 
reform of "bundle regulations" that involve multip le ministries, rather than single regulations." 
What is the roadmap for implementing these improvement plans?  
Question 12  
 
WTO Secretariat in Chapter II paragraph 18 observes: 
 "However, accessibility of legislation and sub-le gal requirements in English remains a significant 
issue for foreign stakeholders:  while MOLEG has pr ovided English translation of many Korean laws, 
many sub-legal regulations remain available only in Korean." WT/TPR/M/204/Add.1 
Page 78  
 
  By when is this problem expect ed to be substantially solved? 
 
Question 13  
 
WTO Secretariat in Chapter III paragraph 36 observes:  
"Korea applies temporary higher MFN duties  (termed as flexible tariffs) than those set at the customs 
tariff schedule  (section  (a) above);  the flexible  tariffs mechanism includes adjustment, safeguard, 
special safeguard, and seasonal duties. Through a numb er of different mechanisms and rationales, the 
system allows the authorities to increase or decr ease certain tariffs at their discretion, with 
differentials of as much as 40% a bove or below a fixed tariff rate. Th is provides considerable scope to 
encourage or discourage imports of particular items, for inflation-control and industrial policy 
purposes."  Such a system would engender uncertainty and u npredictability about customs tariff and would be 
detrimental to foreign trade.  
 What policy objectives are sought to be achieved by  the system of flexible tariffs and why these 
objectives cannot be achieved by more efficient means?     
Question 14  
 WTO Secretariat in Chapter III paragraph 156 observes: 
 "State involvement in the economy  (Table III.5) pers ists;  privatization, particularly in the services 
sector  (Chapter IV), was put virtua lly on hold during the review period." 
 
Why is the programme on privatization put on hold and what are the plans to revive it?  
Question 15 
 
WTO Secretariat in Chapter IV paragraph 5 observes:  
"Services are characterized by relatively low labour productivity  (little more than half the level in 
manufacturing, for example) and declining growth in  total factor productivity.  This poor productivity 
performance is partly due to the lack of compe tition owing to, inter alia, state-ownership and 
excessive regulations, including restricti ons on foreign direct investment."   
 
What are the plans for easing restrictions on the services sector?  
PERU
 
 
Contratación pública 
 
1) ¿Cuál es el alcance de la limitación unificada a favor de las PYMES coreanas?  2) ¿Cuál es el alcance de la excepción a favor de las PYMEs que se encuentra en el Acuerdo 
Plurilateral de Contratación Pública de la OMC? Es  decir, se aplica de manera general, o a un número 
acotado de bienes, servicios o sectores? ¿existe un tope con respecto al valor de los contratos? 
 3) ¿Cuál es la razón de ser por el que Corea man tiene leyes distintas en materia de contratación 
pújblica para nivel, central, regional, local u empresas públicas? ¿En que radican las principales diferencias?  WT/TPR/M/204/Add.1 
 Page 79 
 
 
  Servicios 
 
4) ¿La limitación a la participación extranjera del 49 por ciento para el suministro de servicios de telecomunicaciones básicas aplica también para 10s  servicios de valor añadido como Internet? 
 
5) ¿Existen requisitos de nacionalidad o de asociación con nacionales para proveer uno o mas 
servicios profesionales en Corea?  6) ¿Los bancos de propiedad estatal tienen bene ficios o ventajas que no cuentan los otros bancos 
comerciales? 
7) ¿Esta permitida la compra en el  exterior de seguros o reaseguros? 
 8) ¿Los servicios de franquicias tienen algún requisi to que limite el acceso a los mercados o el 
trato nacional?  Obstàculos tecnicos al comercio 
 
9) Does Korea notify all the proposals of technical  regulation to the WTO, including those that 
are in accordance with international standards?  10) How long is the period for comments th at Korea provides to WTO members on their 
proposed technical regulations, and how long is th e period between the publication of a technical 
regulation and its entry into force?  11) Does Korea have a website that contains all te chnical regulations that are in force? Are the 
technical regulations in a WTO official language? 
 
12) Can the local governments in Korea prepare tec hnical regulations? If is affirmative, are these 
technical regulations in accordance with the WTO TBT Agreement, including the notification 
obligation? 
13) Does Korea accept the results of conform ity assessment procedures performed by accredited 
bodies in other countries? Can the foreign conf ormity assessment bodies be accredited in Korea? 
 
14) Can you explain the conformity assessment procedures used by Korea for cases where a positive assurance of conformity with technical regu lations is required by Governmental bodies? In 
which sectors does Korea accept supplier's declaration of conformity?  
15) Which is the approach used by Korea to s upervise that the results of conformity assessment 
procedure are in accordance with technical regulati ons? Where is supervision being made, on customs 
or in domestic market?  16) Description on the categories on which Korea gives cooperation specially related to TBT issues. WT/TPR/M/204/Add.1 
Page 80  
 
  REPLIES PROVIDED BY THE REPUBLIC OF KOREA
 
 
 
CHINA  
 Question 
 1. Paragraph 10 of the Government  Report states that "strong extern al demand, particularly from 
China, has boosted Korea’s exports and contributed to economic recovery, despite appreciation of the 
Korean won." However, the increase in exports combined with sluggish domestic demand, has 
exacerbated the problem of imbalances in the domestic economy. Would the Korean Delegation 
please elaborate on this latter point?   
Answer 
 
The challenge from this imbalance lies in boosting domestic demand. To revitalize domestic 
consumption, we are pushing forw ard improvement of overall business environment through tax cuts 
and deregulation. We are likewise adopting compreh ensive measures in support of small and 
medium-sized enterprises and promoting competitiveness in the services industry.  
 
Through these measures, we expect to see a sust ainable growth in dom estic consumption.  
 
Question  2. In Paragraph 12 of the Government Report, it is stated that the Korean government places 
high priority on growth and job creation, and aims  to increase the potential growth rate through 
continuous domestic reforms. Would the Korean Delegation please elaborate what the reforms that 
have been envisaged?   
Answer 
 
We are working on strategies to boost our economic gr owth potential with the vision of the "Advanced 
First Class Nation" since the new administration took office.  We will strengthen the role of fiscal policies, fo cus on job creation, and put in place mechanism to 
help stabilization of consumer price and people's livelihood. For example, we established a new tax 
regime for economic revitalization to create jobs that  include a tax cut plan worth 25 trillion won on 
September 1.  In addition, we are endeavoring to set up th e base for sustainable economic development through 
deregulation.  In services, we are also pursuing deregulation process mainly through the first and 
second phase service industry promotion strategies an nounced in 2008 to develop the service industry 
into a new growth engine.  
 
Question 
 3. In Paragraph 26 of the Government Report and re levant parts of the Secretariat Report, it is 
mentioned that the penal provision punishing unfair dismissal was removed in the new legislation on 
industrial relations reform. Would the Korean Dele gation please explain the reason for this change?  
  WT/TPR/M/204/Add.1 
 Page 81 
 
 
  Answer 
 The current act penalizes employers' dismissal and, as a result, in many cases, a legal dispute in civil 
terms leads to a criminal case. It had been restricti ng employers' right to fair dismissal. The existing 
penal provisions on unfair dismissal will be dele ted and, instead penalties and enforcement levy will 
be adopted. 
 
Question 
 4. It is mentioned many times in the Secretaria t Report that the decline of manufacturing in 
Korea’s economy is "possibly" due  to increased competition from Ch ina. Does Korea’s own analysis 
come to the same conclusion?   
Answer 
 
It is true that the proportion of manufactured exports among total exports from Korea declined 
2.1 percent between 2004 and 2007 however, we believe this is the result of increased export activity 
in other sectors.  Indeed, Korea has shown a steady increase in th e volume of its manufactured exports, which rose 
43 percent between 2004 and 2007 despite fierce global  competition that continues to grow.  
 
Question   5. It is noted in several places in the Secret ariat Report that three sectors remain completely 
closed to foreign investment and 26 are partially restricted. Would the Korean Delegation please 
elaborate on this and explain the reason.  
 
Answer 
 Article 4 of the Foreign Investment Promotion Act guarantees that foreign investment shall not be restricted except in cases where  it poses a threat to national secu rity or public order; where it 
threatens public health or the nat ural environment; where it violates Korean morals or customs; or 
where it violates any acts or subordinate statutes of the Republic of Korea.   Specific sectors which are subject to restrictions on foreign in vestment, and the conditions of such 
restrictions, are set forth by the Minister of Know ledge Economy in consultation with the Ministers 
responsible for the business areas in question. When  deciding such cases, the Ministers consider the 
provisions of Annex B, Reservati ons to the Code of Liberalizati on of Capital Movements, and the 
reservations on investment by non-residents specified in various bilateral and multilateral investment 
agreements. 
 
Question  
 
6. It is mentioned in several places in the Secr etariat Report that the low level and decline of 
inward FDI are partly due to unduly burdensome regulation. Would the Korean Delegation please 
comment on this observation ？ 
 
Answer 
 The inflow of FDI to Korea remains stable within the $10 billion to $12 billi on range, but the trend 
since 2004 has been toward  a slight decrease.  WT/TPR/M/204/Add.1 
Page 82  
 
  This decrease is mainly the result of a decline in the number of large-scale mergers and acquisitions, 
instead of excessive regulation.    However,the creation of a business-friendly enviro nment is among the new government’s highest 
priorities, and we are making bold efforts to deregulate. 
 
For example, we have reduced the approval period for the establishment of industrial complexes to 
less than six months; abolished the ceiling on equity investments and eased regulations on the separation of ownership in the banking and commerce industries. Furthermore, we have established 
and are pursuing a three-year plan to improve busin ess and living conditions for foreign investors.  
 
Question   7. It is mentioned in many places in the Secret ariat Report that customs tariff remains relatively 
complex which poses obstacles to economic efficiencies. In view of this, is Korea considering 
streamlining its tariff structure?  
 
Answer 
 Tariff structure for industrial goods, however, is rela tively simple, owing to Korea’s 8% uniform tariff 
system, substantial share  (99%) of ad valorem taxes and low tariff escalation. 
 
Question   8. In Paragraph 13 on Page six of the Secretariat Report, it is stated that "sunset clauses were to 
terminate tax incentives automatically at the end of 2003, but many extended". It would be 
appreciated if the Korean Delegation could explai n the reason behind this delay and extension?  
 
Answer 
 The Korean government inserts the sunset clau se in the tax exemption and reduction polices: 
 
 (i) To prevent the case of abuse and be irreversi bility in favor of certain interest groups. 
 (ii) To eliminate and abolish unnecessary tax exemption and reduction policies   (iii) And to carry out tax exemption and reduc tion polices flexibly in line with the ever 
changing economic landscape. 
 
CHINA – SECOND SET
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  
 
Contingency measures  
Question   1. Paragraph 72 Chapter IV 
 
The Secretariat Report states:  The decision on the imposition of anti-dumping and countervailing duties is taken by the Ministry of Strategy and Finance  (MOSF).    a. How does MOSF make a decision on the imposition of anti-dumping and 
countervailing duties? What’s the procedure?  WT/TPR/M/204/Add.1 
 Page 83 
 
 
   b. Is there any case where MOSF makes a determination different from KTC’s 
suggestion?  
 
Answer to a 
 
The Korea Trade Commission  (KTC) conducts inves tigations into industr ial damages by dumping 
upon the request from the companies injured by dumping. The Customs and Tariff Deliberation 
Committee holds a meeting upon the request from the KTC and the Ministry of Strategy and Finance (MOSF) decides whether to im pose anti-dumping duties. Count ervailing duties follow the same 
process. 
 
Answer to b  The MOSF may changes in the proposal by the KT C on the period and the coverage of anti-dumping 
duties.  
 
Question   2. Paragraph 73 Chapter IV  
The Secretariat Report states ：An early 2008 amendment stipulated that the review process of anti 
dumping duties is to be conducted identically to th e original investigation process; the methodology 
of calculation of the dumping margin was changed.   
 a. Are there any other amendments in the "early 2008 amendment"? 
 b. What is the change on the calculation method of the dumping margin? How does 
KTC calculate the dumping margin of t hose exporters that don’t respond to the 
investigation?  
 Answer  There is no change in dumping margin calcula tion methods.  The 2008 amendment was only to 
improve legal certainty in the existing regulation. 
 
Standards and other technical requirements  
 
Question  3. Korea requires that all imported agricultural pr oducts be subject to annual test of animal drug 
and pesticide residues at the site of processing. E ach importer shall pay a testing fee of up to US$500. 
While for domestic products, the test is  conducted in random and free of charge. 
 Would Korea please explain the rationale for this diff erent treatment and how it is in consistency with 
Korea’s national treatment obligation under the WTO?   Answer  Standards, specifications and testi ng methods provided for in Food  Sanitation Act and relevant rules 
apply to domestic and importe d food products equally.  
The statement that annual laboratory tests are conduc ted for all of the imported agricultural products 
is not a fact. The current Food Sanitation Act only requires food products imported for the first time WT/TPR/M/204/Add.1 
Page 84  
 
  be subject to laboratory testing. "The same product of the same company  (agricultural, forest, fishery 
products or processed foods with the same manuf acturing country, item name, exporter/extorting 
company, and packaging place)" goes through either  document check, organoleptic test or random 
sampling under Food Sanitation Act.   
The regulation was deleted as of July 5, 2005 t hat requires laboratory testing to be conducted again 
for processed foods  (except agricultural, forest, fishery products) every 3 years, and for agricultural, 
forest, fishery products every 1 year: Enforcement Rule  of the Food Sanitation Act, Appendix 6. 2. C. 
Paragraph  (9). Find attachment 1.  
The abolished regulation was reflected on the Paragraph 98, Chapter 3 of 2008 WTO TPR Report. 
See attachment 2.   
 
 As for testing fee, cost for lab testing is borne by  the importer, but that for random sampling is not.  
 
Government procurement 
 
Question  4. Would Korea please provide the information re garding Korea’s government procurement data 
in the past 4 years?  
 
Answer 
 We cannot provide the official data at this moment  because of the recent change made in the data 
collecting system.  
 
According to the Government Procurement Law, th e Ministry of Strategy and Finance  (former 
Ministry of Economy and Finance) collected the statis tics of all government agencies. However, since 
the establishment of local government procurement law (the Act on Contracts to Which the Local 
Government is a Party, hereafter the Local Government Procurement Law) in 2006, the Ministry of 
Public Administration and Security (former Mi nistry of Government Administration and Home 
Affairs) has been in charge of collecting statisti cs on contracts of local government agencies, and this 
created confusion in data collecting from 2005.   To apply the change of the procurement policy to  data collecting system, the government postponed 
the release of the statistics until the modi fication of the system is completed. 
 
Therefore, the statistics submitted to GPA in 2004 is th e most recent official data for the volume of the 
Korean government procurement, and this report already reflects th e most updated data available. 
 
IV. TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE  
 
Question  5. Would Korea please provide information c oncerning price support for major agricultural 
products in Korea?  
  WT/TPR/M/204/Add.1 
 Page 85 
 
 
  Answer 
 As of 2004, some products for wh ich market price supports are existed are rice, barley, and soybean. 
 
Market price support subsidies and support ratio  
Products Rice Barley Soybean 
Price support subsidies  (thousand won) 1,370,840,000 39,570,000 46,700,000 
Product specific support ratio  relative to  production volume  (%) 13.76 29.06 10.8 
The old price support system for rice was abolished in the year 2005. 
Question 
 6. Please provide information c oncerning government financing for rural area and farmers. 
 Answer  By establishing Basic Plan for Agricultural and Rural Development,  Investment and Loan, the Korean government is comprehensively managing  individual project of government financing 
(investment or loan)which is consistent with  the WTO rules  And a major proportion of the 
government financing is provided to be c onsistent with Amendment 2 of UR AA. 
 Website:  http:// www.mifaff.go.kr/USR/WPGE0201/m_342/DTL.jsp 
 
(6) S
ERVICES  
 
Insurance 
 
Question  7. Paragraph 96 Chapter IV 
 
The report described the situation of bancassuranc e in Korea. Would Korea please explain whether 
subsidiaries of foreign-funded banks and branch es of foreign banks are allowed to conduct 
bancassurance business in Korea?   Answer  Bancassurance is allowed to financial institutions established in accordance with the Banking Act 
(The Insurance Act Article 91)  since they are recognized as an agency for insurance companies. 
Accordingly, bancassurance is allowed to any  financial institutions under the Banking Act. 
 
Transport  
 
Question  8. Paragraph 125 Chapter IV 
 
The report noted that "The main barrier to entry to  passenger transport is an ‘economic needs’ test, 
while bus and taxi fares are regulated by local governments based on costs." Would Korea please explain the rationale for this ENT, and how it is implemented?  WT/TPR/M/204/Add.1 
Page 86  
 
  Answer 
 Since passenger transport business provides public transportation services closely related to the 
citizen's right to transportation, there needs to  develop appropriate political approaches based on 
economic demand analysis.   
 
In this context, the Korean Government has app lied more stringent standards on the facilities and 
vehicles when it issues business li censes. On top of that, businesse s are mandated to meet various 
obligations even after obtaining their licenses in order to ensure user protection. Such measures not 
only protect users, but at the same time, can guarantee a certain amount of income for businesses 
which enter into the market. If reckless entrance in to the market is allowed regardless of the market 
demand, it might result in excessive competition an d aggravated operation income and expenditure. 
In turn, the service and safety level will be downgraded.    As for taxies, the Korean Government  introduces the Total Taxi Number Control System by regions so 
as to maintain adequate supply of taxies. Furtherm ore, it established long-term  (five-year) supply 
plans for each city based on the travel rate of ta xies. It grants new licenses according to such plans.  
 Meanwhile, the issuance of bus licenses are delegated to  Si  (city) or Do  (province) governments. 
Once meeting certain requirements such as the number of cars and garage, the license might be 
granted. However, actual issuance is made in consid eration of comprehensive traffic conditions in the 
city/ province.    
Accounting and auditing services 
 
Question 
 
9. Would Korea please provide information on th e mutual recognition of qualifications between 
Korea and other countries/regions on ac counting/auditing services, if any?  
 
Answer 
 
Korea has not signed any mutual reco gnition agreement with other nations. 
 
SWITZERLAND
 
 Report by the Secretariat 
 
I. ECONOMIC ENVIRONMENT  (3) M
ACROECONOMIC POLICIES  
(i) Monetary and exchange rate policy (a) Monetary policy 
 Question 
 In para. 8, the Secretariat’s report indicates th at the Bank of Korea in consultation with the 
Government changed the target indicator for its  inflation-targeting policy, i.e. changed in 
January 2007 from core inflation to headline CPI.  Could the Korean authorities explain why this 
change was made ? Indeed, it would seem that h eadline CPI tends to fluctuate more than core 
inflation and makes it more difficult to determine changes in the inflation trends.    WT/TPR/M/204/Add.1 
 Page 87 
 
 
  Answer 
 Taking the following points into consideration, the Bank of Korea changed its target indicator from 
core inflation to  the consumer price index when the medium -term inflation target for 2007
∼2009 
was set.  
 
Core inflation is remote from the day -to-day life of the general public  as it excludes the prices of the 
agricultural products and petroleum-based fuels that constitute major items in the cost of living. In 
addition, most countries that have adopted inflatio n targeting except for a few such as Thailand 
employ the consumer price index as their target indicator.  If the Bank of Korea had persisted with core inflati on despite the government's use of the CPI as its 
price indicator in planning the management of the economy, this also could have led to popular 
confusion in judging price levels.  
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements 
(d) Korea-United States  (KORUS) FTA  
Question  In para. 40, the report states that the Korea-Unite d States  (KORUS) Free trade agreement, which was 
signed in June 2007, is to be ratified by the Korean  National Assembly in 2008. Could Korea further 
precise, if already known, when in 2008 it is e xpected that the National Assembly will ratify the 
KORUS FTA ?   
Answer 
 
The Korean government seeks prompt approval of the Korea-U.S. FTA by the National Assembly.  
However it is difficult to forecast when  the National Assembly will approve the FTA. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs valuation 
 
Question  In para. 24, the Secretariat’s report indicates that , the Korea Customs Service uses the depreciated 
value to value imported used cars. Could Korea specify how it calculates the depreciated value?  
 
Answer 
 The depreciated value is calculated by deducting th e depreciation of value based on the price of new 
products domestically trans acted or on the price of the used products with tariffs when imported 
 WT/TPR/M/204/Add.1 
Page 88  
 
  (iii) Tariffs 
 
Question 
 In para 28, the Secretariat’s report indicates that, th e 2008 tariff contains 26 tariff lines more than the 
2007 schedule. Could Korea explain why this is the case and provide the tariff lines as well as the 
product description of these 26 additional tariff lines?   
Answer 
 
In 2008, Korea amended HSK 2007 to more closely fo llow import and export trends of several goods 
and to correct inaccuracies in HSK.  After the amendment, the total number of lines increased by 26 
from 11,703 in 2007 to 11,729 in 2008.   If it is necessary to have the changed items and their HSK numbers, they will be provided in addition. 
 
Question  In para. 31, the Secretariat’s report indicates that , the tariff of Korea remains relatively complex, 
involving a multiplicity of rates often involving sma ll rate differences and deci mal points. In addition, 
Korea has also some 124 different rate bands. Does Korea foresee to rationalize its tariff, by reducing 
the number of bands and removing decimal duties?  
 
Answer 
 Please refer to the answer to China’s question 7. 
 
(c) "Flexible" tariffs 
 
Question  In para. 36, the Secretariat’s report indicates that, th anks to the Flexible tariffs mechanism Korea can 
increase or decrease certain tariffs at its discretion.  Although the flexible tariffs vary inside the bound 
rates it can encourage or discourage imports because the differential can be as much as 40% above or 
below a fixed tariff rate. Could Korea indicate how often and for which reason it increases or decreases the flexible tariffs and which are the products concerned  (HS number and product 
description)? Until the DDA is concluded, does Kor ea intend to improve the predictability of its 
tariffs and reduce them? Could Korea specify what th e customs service plans to  do to standardize the 
flexible tariffs  (see footnote 26)?   
Answer 
 The flexible tariffs are set considering domestic and international  market conditions to meet such 
challenges as price hikes or import surges. The flexi ble tariff rates are  established on a yearly basis  
(or six months if necessary).   A total of 16 lines including frozen croakers and salte d shrimp were made adjustment duties in 2008.  
Applied notes were lowered on some 46  tariffs (including oil and sugar). 
 
The coverage for those flexible tar iff is diminishing. And the number of lines on which flexible tariffs 
are levied has steadily decreased from 80 in 1997, 27 in 2000, 23 in 2003, 18 in 2006 and 16 in 2008.    WT/TPR/M/204/Add.1 
 Page 89 
 
 
  Korea’s flexible tariffs rates are set and administr ated within the range of WTO bound rates. The 
public can get enough information concerning the imposition of flexible tariffs and a presidential 
decree is issued when flexi ble tariffs are levied. 
 
Adjustment duties  (para. 38-39)  
Special safeguard and safeguard tariffs  (para. 40-41) 
 Question  Could Korea specify what is the difference betw een the adjustment duties and special safeguard 
duties?  
 
Answer 
 Adjustment duties are levied w ith in the UR commitment level as applied rates. SSGs are in 
accordance with Article 5 AoA only for designated products. 
 On the other hand, special safeguards are imposed when the import quantity of agricultural, forest 
and livestock products, to which a tariff concession wa s made at a rate equivalent to the difference 
between domestic and foreign prices, sharply rises or their import prices fell. Special safeguard tariff 
rates in Korea are complying with  the WTO Agreement on safeguards. 
 
(viii) Contingency measures 
 
Question  
In para. 73, the Secretariat’s report indicates that, following an early 2008 amendment to the Korean 
legislation on contingent protection, the calcu lation method of the dumping margin was changed. 
Could the Korean authorities elaborate in the ch anges that took place in this respect ?  
 
Answer 
 
Please refer to the answer to China 2nd set’s question 2 (contingency measures). 
 
(xi) Standards and other technical requirements 
(a) Standards, testing and certification 
 
WTO enquiry points, notification, and disputes  
Question 
 According to JOB (08)/53 of 26th June 2008, the Re public of Korea has been challenged on 12 issues 
regarding technical regulations, standards or c onformity assessment procedures. Could you please 
elaborate on the situation  (see para. 99-100)?  
 
Answer 
 Those measure which were challenged in the WTO/TBT committee were introduced to fulfill 
legitimate objectives under article 2.2 of the WTO/TB T Agreement. And some of  them, as the case of 
"Marks of origin system and related labelling requirem ents", were modified or deregulated by taking 
into consideration of other Member's comments. 
 WT/TPR/M/204/Add.1 
Page 90  
 
  (c) Marking and labelling 
 
Question  Could the Republic of Korea please sketch out the main elements of the "Regulations concerning 
Origin: Notification of Ministry of Commerce, I ndustry and Energy 2007-157"  (see para. 107) ?  
 
Answer 
 Regulation Related to Country of Origin Labeli ng for Imported Goods posted the specifics of the 
Foreign Trade Act and its Enforcement Decree regardi ng the labeling of the origin of imports, 
criteria determining origin, etc.   Regulations Related to Country of Origin Labeli ng for Imported Goods includes general methods for 
labeling the origin of imports, exceptions, and sp ecific criteria in determining origin, etc. 
 
Guidelines on the appropriate method for labeling the or igin of each individual products is provided 
and promoted by the Korea Customs Service. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation 
(a) Indirect taxation  
Question  In para. 133, the Secretariat’s report suggest that an education tax is levied on banking and insurance 
services. Could the Korean authorities explain why th is education tax is specifically targeting banking 
and insurance services and apparently not other economic activities ? More generally, it seems that 
Korea maintain a large number of different indirect  taxes which make an overall assessment of the tax 
burden difficult. Are the Korean authorities considering a tax reform that would streamline the indirect tax structure and possibly shift the burden of taxation toward a more direct taxation-based 
system which could both broaden the tax base and contribute to reduce the increasing income 
inequality, as mentioned in para. 2 of Chapter I of the report ?  
 
Answer 
 Considering that VAT on banking and insurance services is exempt, 0.5% of profits from banking and 
insurance services has been taxed  as education tax since 1981 when the education tax law was 
enacted.   Sales tax  (1% of sales revenue) had been imposed  on banking and insurance services before VAT was 
adopted in June 1977.    
However, the education tax will be abolished in  2010 to streamline earmarked taxing system for 
improving efficiency in tax system.   Considering that Korea's VAT rate  (10%) is not high er than that of other countries, reducing indirect 
taxes such as VAT  is not being  planned 
  WT/TPR/M/204/Add.1 
 Page 91 
 
 
  (ii) Financial assistance 
(a) Loans, guarantees, and other financial measures 
 
Question  
In para. 147, the Secretariat’s report indicates th at state-owned entities su ch as the Korea Credit 
Guarantee Fund  (KODIT) and KIISO Technology Fu nd provide credit guarantees to enable emerging 
firms, especially SMEs to gain access to finan ce. The report further indicates that they are 
commercially run and that their operations are conduc ted according to market principles; however, the 
report also suggests that the Government would cover any losses. Could tze Korean authorities 
indicate through which mechanism the Government can  ensure that the operations of these schemes 
will indeed be conducted according market principl es and will avoid the occurrence of losses ? In 
other words, how can the Korean authorities en sure that moral hazard will not prevail ?  
 
Answer 
 
The credit guarantee system is operated on the market pr inciple by applying the same interest rates 
with the ordinary SME loans to all companies. There is no regulation on which the public sector 
restricts competition with the private sector or abuses monopoly power.   Only 49% of the total fund  (9 trillion KRW out of 19 trillion KRW) is from the government. In 
particular, recently government funding is reduced si gnificantly. This proves the guarantee system is 
operated on a private sector basis.  In 2005, when  the Technology Guarantee Fund suffers liquidity 
crisis, the losses were covered by the financ ial institutions, not by the government.  
 
(vi) Intellectual property rights 
(a) Industrial property  
Trade secrets 
 
Question  
In para. 183, the report by the Secretariat indicates that, confidential data submitted to authorities for 
marketing approval of pharmaceuticals and agricu ltural chemicals are prohibited from public 
disclosure unless the authorities see a public inter est need. According to Paragraph 183, unfair 
commercial use of such data is also prohibited. Please indicate which provisions of your legislation 
address this issue. Does your legislation provide for a specific term of protection for such data before 
the expiration of which test data cannot be relie d upon or referred to by a second applicant for the 
market authorisation of his own product?   
Answer 
 Pharmaceutical products 
 
Safetyefficacy data submitted to the authority, i.e. "Korea Food and Drug Administration" for 
marketing approval of pharmaceutical products are pr otected by the paragraph 8 of the article 27 of 
"the regulation of approvallistingevaluation on  pharmaceutical products  (KFDA administrative 
notification No. 2008-56, August 14, 2008)". 
 
And also, the term of protection is determined as 6 years for new drugs and 4 years for new indications by "the enforcement rules of the pharma ceutical affairs Act (Ministerial Decree No. 12, 
April 18, 2008)  WT/TPR/M/204/Add.1 
Page 92  
 
  Agricultural chemicals 
 According to article 27of the Agrochemicals Contro l Act, submitted documents on the raw material of 
agricultural chemicals should not be revealed if the registration applicant requested the information 
protection. Exceptions are allowed only when discl osure is considered nece ssary for public interest. 
The specific rationale for disclosure is judged case by case.  
 In application for agrochemical registration, subm ission documents like test report can be presented 
only by those who have the ownership over the documen ts. Still, the items which have the registrant’s 
consent over the use of test repor t are exempted from this.    
 
BRAZIL
 
 
Document WT/TPR/G/204 
 Question 
 Page 5, paragraph 3  "3. To Korea, the objective of pursuing FTAs is to  manage its bilateral trade relations in a more 
systematic manner and secure better access in trade and investment to foreign markets which may be 
unavailable under the multilateral se tting. Moreover, it is expect ed that FTAs will prompt the 
domestic restructuring of less competitive sectors and thus raise the level of efficiency within the 
economy. In this light, Korea believes that these  FTAs will complement, not replace, efforts for 
multilateral trade liberalization."  
Question 
 What kind of measures are being taken concerning the restructuring of less competitive agricultural 
sectors ? Could you please give some examples of agricultural subsectors that have high applied tariffs and at the same time are being subject to preferential liberalization under recent FTAs  (please 
specify some timeframes of the liberalization of the examples, if possible) ?  
 
Answer 
 Korea government is facilitating the restructuring of agricultural sector including throughout 
producer retirement. 
 
In most FTAs in effect that Korea concluded with foreign countires, many sensitive agricultural 
products were excluded from concessions. However, Ko rea was in a position to offer concessions on 
some other products such as seed mung beans, corn s, millet, oats and maize in the form of mid-to-
long term tariff elimination.   
maize for seed : tariff elimination in 10 years, Korea-Singapore FTA  
Seed mung beans : reduce 20% tariff until 2016, Kora-ASEAN FTA  
  WT/TPR/M/204/Add.1 
 Page 93 
 
 
  Document WT/TPR/S/204 
 
Question  Page 103, paragraphs 44 and 45 
 
"44. Korea's "Energy Vision 2030", launched in November 2006, has three basic directions  (3 Es):  energy security, energy efficiency an d environment-friendly as recommended by the 
International Energy Agency.   Nine tasks are set  for implementation, including expanded potential 
for overseas energy development, establishment of the infrastructure of a hydrogen-based economy, 
improvement in energy consumption efficiency, and a strengthened effort for investment in the energy 
industry overseas.  Korea plans to realize "universal  energy services" across the nation by 2016 so that 
no citizen will be excluded from the systematic expanded energy welfare scheme.   45. The Ministry of Knowledge Economy  (MKE, former MOCIE) sets energy policy.  A 
National Energy Committee, launched under the Ba sic Act on Energy in November 2006, envisages 
meeting a third of Korea's energy consumption from Korean investment in resources overseas , seeks to raise the ratio of renewable energy use to 9%  and reduce dependence on petroleum to 35%.   It 
plans to help the county emerge as an exporter of  energy facilities and technology, and convert it into 
a society of low energy consumption by the target year 2030.  As of 2006, Korea's energy self-sufficiency rate for petroleum and gas was 3.2%, re newable energy rate 2.24%, and dependency rate 
on petroleum 43.6% of total energy production." 
 Question  With regard to reducing dependence on petroleu m and using more environment-friendy energy 
sources, does Korea consider to adopt a policy of ha ving a percentage of ethanol mixed with gasoline 
to fuel vehicles, in light of similar policies adopted by Brazil other developing countries, like 
Thailand?   
Answer 
 
We believe it is important to expand the use of alternative energy sources such as bioethanol to 
replace oil in response to climate c hange and a possible energy crisis.  
 However, Korea has to heavily rely on imports to supp ly bioethanol because of the lack of feedstock.  
 
Therefore, we are planning to determine the use of  bioethanol after comprehensive review on the 
stable supply of feedstock, price compet itiveness, and costs for infrastructure.  
 
Question  Page 110, paragraph 70 
 
"70. Tariff protection for ships ranges from zer o to 8%.  Between 2002 and 2005, Korea was a 
respondent in a WTO dispute settlement case c oncerning certain measures affecting trade in 
commercial vessels.   A subsidy  (Local Tax Reduc tion for Building and Acqui sition of International 
Line Vessels and Deep Sea Fishing Vessels) aimed at  promoting the shipping industry by relieving 
the tax burden on international line vessels, deep-s ea fishing vessels and coastal line vessels, which 
was to be eliminated at end 2006, will now be extended to end 2009.   Korea is playing an 
increasingly active role as a rule-maker for regulatio ns in the international shipbuilding industry by 
engaging in various conferences and rule-making sessions."  WT/TPR/M/204/Add.1 
Page 94  
 
  Question 
 Could you please provide some more detailed info rmation on how the "Local Tax Reduction for 
Building and Acquisition of International Line Ve ssels and Deep Sea Fishing Vessels" works as a 
subsidy ?  
 
Answer 
 In order to prevent foreign registry of Korean flag ships and to enhance competitiveness of Korean 
flag shipping company, the Korean Government enac ted the International Ship Registration Law 
which allows ships registered as  international line ships to em ploy foreign crew and enjoy tax 
incentives.   Up to 10 members of foreign crew can be aboard in  a ship registered as international line ship. 
 
As stipulated in the related laws and regulations , international line ships can be exempted from 
acquisition tax, property tax, speci al tax for rural development, loca l education tax, common facilities 
tax and other local taxes.   BRAZIL – SECOND SET
 
 
CHAPTER III – TRADE POLICIES AND PRACTICES BY MEASURE INTRODUCTION Page 39, paragraph 6 
 
The document states that "Although tax incentives were  to terminate automatically at end 2003 in 
accordance with sunset clauses, many were extended." 
 Question: Could Korea complement information on this issue, explaining the present situation regarding such tax incentives?  
Answer 
 
Please refer to the answer to China’s question 8.  
M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
Page 40, paragraph 11 
 
Question: The document mentions that qualified importers (approved by Customs based on their 
import record) receive expedited customs clearanc e and more convenient methods for paying duties. 
Could Korea inform what criteria are used to accredit importers as well as the requirements imposed 
for the concession of the benefits?  
 
Answer 
 Those who meet all of the four qualifications will be chosen as awardees in every year-half:  Not 
violated the Customs Act and not defaulted in tax pa yment for the last two years;  Won 90 or higher 
points in the Decent Tax Payment Score;  Rated B or above in the Importer Evaluation Grade;  and Paid one billion won or more in taxes and filed 1 00 or more import declarations per year.  
  WT/TPR/M/204/Add.1 
 Page 95 
 
 
  Procedures are as follows:  
 1. application of companies →  
2. the director of a customhouse recommend after an examination of qualifications/ the director  of a customhouse recommend of his own accord → 
3. examination of committee for selecting Re putable Customs Administration Partners →  
4. committee for selecting Reputable Customs Ad ministration Partners : 5 private committee 
members and 5 customs officials(including chairperson<KCS deputy commissioner> →  
5. selection  
 
(ix) Standards and other technical requirements  
Page 64, paragraph 100 
 
The document states that "Since April 2004, three Me mbers have raised specific concerns in the SPS 
Committee about measures maintained  by Korea. (72)" and footnote 72 states that "Also in 2007,  
Brazil expressed concerns about Korea's lack of recognition of regionalization (Article 6 of the SPS 
Agreement) with respect to foot-and-mouth disease.  These concerns have apparently not yet been 
resolved."  Comment
: Last August, during a Mission of the Brazilian Ministry of Agriculture to Seul, and in the 
latest sessions of the SPS Committee, Brazil inqui red about changes now in course regarding the 
Korean legislation on imports of animal products, particularly if such legislation would include the 
possibility of recognising free foot-and-mouth disease areas, according to the principle of 
regionalization. Regionalization is a principle r ecognised by the SPS Agreement and by OIE. The 
non-recognition of this principle affects imports of  beef and pork from Brazil to the Korean market. 
During the bilateral meetings on SPS issues, in Seul, on August 8th, Korean representatives stated that 
such new legislation was at an advanced stage of implementation.   Question : Could the Korean delegation inform the exp ected date for the effective entry into force of 
the new legislation on imports of animal products, cont emplating the principle of regionalization? Is it 
possible, under the legislation today in force in Sout h Korea, to consider specific regions of a foreign 
country as free from foot-and-mouth disease?  
 
Answer  
 
The above legislation (Guidelines for import risk analysis for designated animal products) entered 
into force as of August 27, 2008.  Whether to recognize specific region as FMD(foot-and-mouth 
disease)-free nation can be determined after im port risk analysis in accordance with the above 
mentioned law.    
 
M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Competition and consumer policy  
Page 82, paragraph 167 
 
The document states that "The KFTC has investig ated alleged international cartels in marine 
transportation and DRAM chips, and currently, is i nvestigating several international cartels including 
one on air fares.  KFTC has signed memoranda  of understanding on competition policy dialogue, 
establishing the basis for a formal dialogue on comp etition law enforcement, with Australia, Canada, 
the EC, Mexico, Romania, the Russian Federation,  and Turkey;  at present Korea is negotiating 
bilateral cooperation agreements w ith the United States and the EC." 
 WT/TPR/M/204/Add.1 
Page 96  
 
  Question: Could the Korean government explain in furher detail those agreements and cooperation 
experiences? For instance, how are confidential info rmation issues approached? Is there any dispute 
settlement mechanism? Are joint i nvestigations being considered?  
 
Answer 
 
Korea (the KFTC) has signed a Memorandum of Understanding or an Arrangement with seven 
competition agencies in order to ensure trans-na tional response to international anti-competitive 
behaviors.       
Korea has signed an MOU with four jurisdicti ons (Rumania, Russia, the EU and Turkey) and a 
Bilateral Cooperation Arrangement with three juri sdictions (Australia, Mexico and Canada). At 
present, the efforts to establish a Bilateral Coop eration Agreement with the EU are under way.   
 Major content of those MOU(Arrangement, Agreeme nt) include notification on investigations that 
involve undertakings of the other party, coopera tion and coordination in law enforcement activities, 
avoidance of conflicts, holding of c onsultation meetings and cooperation in technical assistance.    
 
1. How are confidential information issues approached ?  
 According to the above arrangements, information available for public disclosure is subject to 
exchange.    
 2. Is there any dispute settlement mechanism ?  
 Pursuant to the Korea-Australia Bilateral Coopera tion Arrangement, in case a dispute arises, both 
parties shall undertake immediate bilateral consultation to settle it. (PARAGRAPH 10)  
 3. Are joint investigati ons being considered ?  
 To prevent destruction of evidence related to in ternational cartels at the early stage of an 
investigation, Korea has a system in place to pursue joint investigations with other jurisdictions like 
the US and the EU based on consultation between competition agencies.   
CHAPTER IV – TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE  
(ii) Policy developments 
Page 92, paragraph 9 
 The document states that "According to the authorities,  Korea's action for coping with the recent rise 
in world food prices will be focused on: promoting the supply of crops; relieving the agri-food industry of the burden of price surges in cereals;  and generating substitution crops for imported wheat 
by creating new demand (e.g. developing processed rice products). The authorities adopted several 
short-term measures including setting up a task fo rce consisting of public and private sector 
representatives, establishing an early warning syst em on international grain supply and price, 
quantitative export restrictions on rice (Chapter III), suspending the autonomous tariff for grains such 
as wheat, corn etc. (from 1 April to 31 December  2008), and extending the VAT exemption period for 
the sales volume of feed (which expires in 2008) fr om late 2008 to late 2011. Mid- and long-term 
measures include: increasing efficiency in land use and self-sufficiency through expanding domestic 
production by utilizing idle farmland in winter; e xpanding the cultivation area for wheat, feed crop, 
and other winter crops from 34,000 to 66,000 hectares by 2012;  plans to extend the volume of tariff-rate quota items (soybean, corn, etc.), operated by the Korean Agro-fisheries Trade Corporation 
(Chapter III);  and promoting Korean investment in agriculture overseas."  WT/TPR/M/204/Add.1 
 Page 97 
 
 
  Question 
 How is Korea working on its plan to extend the volume of tariff-rate quota for soybean and other 
agricultural items?   Answer 
 
Every year, Korea has been increa sing tariff rate quota for some of agricultural and livestock 
products whose domestic production volume is insufficient. Recently, the production has been 
expanded in preparation for the possible surge of in ternational grain price. These products include  
some agricultural and livestock commodities which ha ve vulnerable supply base as well as the basic 
farm items necessary for price stabiliz ation like sesame, soybean and corn.  
 However, it is not permanent because there might  be changes in products and volume every year, 
considering domestic conditi ons for demand and supply.  
 
(6) S
ERVICES  
(ii) Overall commitments under the GATS 
Page 110, paragraph 73 
 The document states that "To be able to provide professional services, such as legal, accounting, and 
audit and taxation services, foreign qualifications need to be approved in Korea." 
 Question: Could Korea explain in some detail how  such foreign qualifications are evaluated by 
Korean authorities? The Secretariat’s Report does not mention the qualification requirements and producers, technical standards and license require ments for Engineering Se rvices and Construction 
and Related Engineering Services. Brazil would ap preciate information on such requirements."   
 
Answer 
 
In order for a foreign technical qualification of  construction and related engineering services and 
others to be approved by Korean authorities, th ere should be a mutual recognition agreement made 
between the Korean government and the government th at issues the qualification. The qualification 
requirements, technical standards, and license requirement s vary according to what is provided in the 
agreement. 
 
UNITED STATES
 
 
WT/TPR/G/204 
 
Question  Page 12, Paragraph 29:  Korea’s Report notes that effo rts have been made to enhance transparency of 
the regulatory process.  However, exporters continue  to report that further improvements can be made 
in sectors such as pharmaceuticals, agricultural bi otechnology and white go ods.  Suggestions for 
improvements include timely disclosure of full info rmation and provision of a meaningful opportunity 
to submit comments and have tho se comments reflected in the final regulations.  How does Korea 
plan to address these suggestions?  
 WT/TPR/M/204/Add.1 
Page 98  
 
  Answer 
 Since 2005, annual survey on satisfaction by gen eral public has been conducted. In addition, 
participation of general public is ensured in the process of regulat ory reform by operating 
communication channels with private associations. 
 
Reformed regulations are published to general publ ic as regards the regulatory system through the 
website of the Prime Minister's Office. 
 
WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures (a) Registration, documentation, and clearance requirements 
 
Question  Page 40, paragraph 16:  While we appreciate Korea's desire to ensure that its imports are not under-
valued, the Secretariat’s report states that the mo tivation for the specific products subject to more 
rigorous controls were chosen to "help protect local  farmers and producers against increased imports".  
Does the ROKG concur with the Secretariat’s statement?   
 
Answer 
 The objective of more rigorous controls for the sp ecific products is not to protect local farmers and 
producers but rather to protect domestic consumers from  imported products with harmful ingredients. 
 
(ii) Customs valuation 
 
Question  
Page 43, paragraph 23:  According to the Secretar iat’s report, when the transaction value cannot be 
used to value imports, "...valua tion is determined using, in or der, identical goods, similar goods, 
domestic sales price, or computed value." Could Korea clarify the term "domestic sales price" as it appears in this paragraph of the Secretariat’s doc ument?  Does Korea’s legislation provide for the 
application of Article 5 of the Customs Valu ation Agreement as a method of valuation?  
 
Answer to the first question 
 "domestic sales price" means the unit price by which the concerned imported products, like products 
and similar products are sold domestically in the largest amount to the person with no special 
relations on the date of notified import date on the sa me status as the imported ones  (Customs Act 
Article 33).  
 Answer to the second question  Yes, Article 30 to 35 of our Customs Act which s tipulates the principle of determining dutiable value 
provides the application of Article 5 of  the Customs valuation WTO Agreement. 
  WT/TPR/M/204/Add.1 
 Page 99 
 
 
  (viii) Contingency measures 
 
Question  Page 57, paragraph 73 of the Secretariat Report st ates that in 2008, Korea amended its legislation 
whereby its "review of anti-dumping duties is to be conducted identically to the original investigation 
process; the review calculation method of the dumping margin was changed."  Please identify the aspects of Korea’s calculation method that changed as a result of the 2008 amendment, and further 
specify how each of the identified changes differs  from Korea’s prior method for calculating dumping 
margins in reviews of antidumping measures.  
 
Answer 
 Please refer to the answer to China 2nd set’s question 2 (contingency measures). 
 
(ix) Standards and other technical requirements Food and other non-industrial products 
 
Question  Page 62, paragraph 91: We appreciate that Korea is  taking steps that appear aimed at liberalizing 
regulation of functional cosmetics. Please elaborate on what Korea is planning in terms of a system of 
"self-regulation."  Please elaborate on what type of testing or certification may be involved and the 
standards or technical regulations to which functiona l cosmetics would be tested or certified.  What 
are the objectives of any such standards or technical regulations  (e.g., quality assurance, safety etc.)?  
Will all functional cosmetics be subject to this new sy stem, and if not all, what criteria will be used to 
determine which functional cosmetic s will be subject to this new system? Will domestic and imported 
functional cosmetics equally be subject or not subject to this new system?  In addition, we understand 
that functional cosmetics that have been self-tes ted and certified by the manufacturer to Korean 
requirements are nonetheless subject to "quality inspec tion" in Korea. What is the purpose of this 
quality inspection if Korea accepts the quality certification and testing performed by the 
manufacturer?  
 
Answer 
 Enforcement Rule of the Cosme tic Act was revised and would enter into force starting from 
18 October, 2008. The revised regulation provides exemption from the requirement of efficacy 
screening for the functional cosmetics whose ingred ients and their content are notified by the KFDA 
Commissioner, and for the sun-screening product of the same company which has the same type, 
specification, etc. of the functional i ngredient as already -approved products.  
 All of the products manufactured and imported should  be subject to the quality inspection by batch 
numbers in accordance with the standards set by th e KFDA Commissioner. This is to see whether the 
product is consistent in its quality  and contains any harmful subs tances in an effort to provide 
consumers with safe products. 
 
Conformity assessment 
 Question 
 Page 63, paragraph 93:  We welcome the steps Kore a is taking to promote private certification.  Will 
foreign bodies  (both bodies in the United States and US-invested bodies) also be allowed to certify products for the Korean market?  WT/TPR/M/204/Add.1 
Page 100  
 
  Answer 
 Regarding private certification, there is no legal  restriction for foreign bodies which should be 
qualified in accordance with the relevant laws an d regulation to certify products for the Korean 
market. 
 
(x) Government procurement 
 
Question  
Page 63, paragraph 96 describes a "New Excelle nt Product"  (NEP) certification system: "NEP 
certification is provided for products manufactured w ith new technologies developed first in Korea or 
with innovative technologies improved from existing technologies."   Does the certification of products "with innovative technologies improved from existing technologies" 
require that such technologies be improved in  Korea? Would innovative technologies improved 
outside Korea qualify for certification?   
Answer 
 Any private company may voluntarily apply for NEP certificate. Products for NEP certification are 
subject to those with technologies which developed first or improved from existing technologies in 
Korea. However, the existing technologies for such im provement is not necessarily of Korean origin. 
 
Question 
 
Paragraph 96 also states that: "Products certified as  NEP receive an additional point in procurement 
by government and public organizations."  If NEP certification is provided "for products 
manufactured with new technologies developed firs t in Korea," how does Korea implement this 
provision in a manner that is consistent w ith its obligations under the WTO Agreement on 
Government Procurement?   Answer   In Korea's Appendix to the Government Procuremen t Agreement (WT/Let/543, 23 May, 2006), Note 3 
to Annex 1, Note 3 to Annex 2 and Note 2 to Ann ex 3 state that "This Agreement does not apply to the 
single tendering procurement and set-asides for sma ll- and medium-sized businesses according to the 
Act Relation to Contracts to which the State is a Party and its Presidential Decree,  (omitted below)."  
 Korea was endorsed to ha ve exceptional provisions for small and  medium enterprises. An additional 
point in procurement is subject to NEP-certified pr oducts acquired by small and medium enterprise. 
Even this case is only applicable to competitive tendering between SMEs. 
 Question 
 Page 66, paragraph 109 states:  "For GPA-covered entities, contracts subject to Korea's commitments 
represented about 38.4% of tota l GPA-covered procurement in 2004."  Please explain why 
procurement by Korea’s GPA-covered entities only covers 38.4% of Korea’s GPA-covered 
procurement.  
  WT/TPR/M/204/Add.1 
 Page 101 
 
 
  Answer 
 We would like to correct the factual errors in this statement of the Secretariat Report. The statement 
should be corrected to "For GPA covered entities,  contracts subject to Korea's commitments 
represented about 38.6% of their total procurement in 2004." 
  
The relatively low portion of procurement by GPA- covered entities is mainly due to exclusion of 
military product (arms, ammunitions etc.) purcha ses. The MND (Ministry of National Defence) 
procured 7 trillion won  (Above the threshold : 5.7 trillion won) in 2004, of which the amount of 
contract uncovered by the GPA was 5.5 trillion won. 
 
The Amount of Procurement Procured by GPA Covered Entities 
 (Unit:  Trillion won) 
Above the threshold 
  Covered by the WTO 
GPA Uncovered by the WTO 
GPA Sub-total Below the 
threshold Total 
  13.2 8.1 21.3 12.9 34.2 
Central Government Entitie s 5.7 6.7 12. 4 4.9 17.3 
Local Government Entities 2.3 0.2 2. 5 2.3 4.8 
Other Entities 5.2 1.2 6.4 5.7 12.1 
 
Question  
Page 68, paragraph 115 states that: "Contracts ar e awarded through open competitive tender, unless 
there are reasons . . . for awarding by restricted tender."  What percentage of Korea’s government 
procurement is conducted using ope n tendering procedures  (in which all interested supplies may 
participate) and what  percentage of  governm ent procurement is conducted using selective tendering 
procedures  (that is, where pre-qualification require ments, as described in paragraph 114, or other 
elements of selective tendering are used)?  Pl ease provide such information for both procurement 
covered by the GPA and for procurement excluded from the GPA.   
Answer 
 Official statistics as to matters mentioned ab ove are not available from any source.  
 
Question  Please describe the differences between "private te ndering," "restrictive tendering" and "competitive 
tendering".  
 
Answer 
 The terms "private tendering", "restrictive tend ering" and "competitive tendering" are the same as 
"limited tendering", "selective tendering" and "open tendering" of the GPA provisions respectively. 
 
Question  With regard to the statement that "competitive c ontracting is generally used for such purchases from 
SMEs," in such cases is the competition limited to SMEs?   WT/TPR/M/204/Add.1 
Page 102  
 
  Answer 
 Korea has abolished the single tendering system for SME cooperatives in 2006 and adopted a system 
of competitive tendering among SMEs. As of 2007, goods  manufactured by SMEs are in principle 
procured under competitive tenderi ng where all interested suppliers ma y submit a tender. However, 
for the purpose of fostering market opportunities fo r products that are produced and supplied directly 
by SMEs, the relevant authorities may designate certain products to be procur ed through competitive 
tendering among SMEs. The competition is limited to SMEs for the proc urement of such products, and 
as of Sept. 2008, there are 221 products designated as such. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(vi) Intellectual property rights 
 
Question  
Page 83, paragraph 171 a nd page 84, paragraph 175: Please ex plain the relationship between the 
following two provisions of law and the reasoning behind the difference in penalties:   "[p]enal provisions for right infringements of pa tents, utility models, trade marks and industrial 
designs are: imprisonment of up to seven years or a fine of up to W 100 million; or up to three years or W 20 million for falsely indicating such a right or fraudulently obtaining one." 
 
"[t]hat Unfair Competition Prevention and Trade Secr et Protection Law prohibits unfairly tarnishing a 
well-known mark or causing confusion by use of si milar or identical mark, including distributing, 
importing or exporting such goods.... Penal provisions ar e up to three years imprisonment or a fine of 
up to W 30 million."  
 
Answer 
 Paragraph 171 deals with infringement of registe red rights, false indication of rights and fraudulent 
obtaining of rights.  Paragraph 175 covers unfair competition acts. They are different in that the former deals with rights registrable, while th e latter deals with unregistered rights.  
 
The difference in penalties comes fr om the rationale that registered  rights are given the highest 
protection. Hence the infringement of registered rights is given the highest protection. Unfair 
tarnishing or causing conf usion by use of similar or identical mark involves unregistered well-known 
marks which are equivalent to registered rights. Therefore, it is punishable by less penalties than 
infringement of registered rights.  
Question  Page 86, paragraph 185 indicates that sui generis pr otection is available in Korea for non-original 
databases.  Please indicate under what terms and c onditions such protection is available to non-
original databases created outside Korea by foreign nationals.  
 
Answer 
 The current Copyright Law defines the "database" as  'contents which are systematically arranged and 
which can be accessed and searched individually'.  The producers of the database have the right to 
reproduce, distribute, broadcast and transmit  (p rotection period: 5 years). Databases created by a 
foreigner are protected on the basis of reciprocity. 
  WT/TPR/M/204/Add.1 
 Page 103 
 
 
  Question 
Page 87, paragraph 191 indicates that there are concerns about the unauthorized reproduction of 
textbooks on Korean campuses. What is the Korean  Government doing to address the infringement of 
literary works on the campuses of colleges and univers ities?  In particular, please describe the actions 
taken to ensure that guidance from Korea's Mi nistry of Education has been followed and 
implemented.  
Answer 
Every year, during March and April as well as Augus t and September, Standing Inspection Team with 
a special policy power and anti-piracy staff, and the publication industry carry out enforcement 
activities. If illegally copied books are found within  the campus, it is reported to the Ministry of 
Education, Science and Technology to take pr oper measures against the concerned university.  
Question 
Please describe the Korean authorities responsible for enforcing the Copyright Act and the actions 
they undertake.  In particular, please describe an y non-government or private organizations that have 
been delegated such authority, the actions they unde rtake, and the extent to which those activities are 
taken to enforce the rights of foreign right holders.  
Answer 
Copyright Act is administered by the Mi nistry of Culture, Sports and Tourism. 
The cases of illegal copy right activities are as follows: 
2005 2006 2007 2008.8.31 
  
Cases Amount Cases Amount Cases Amount Cases Amount 
Online 39,470 13,019,559 46,003 11,004,494 77,582 12,466,051 38,324 6,987,293 
Offline 3,185 411,224 1,585 208,67 1 1,394 120,111 1,068 284,275 
SW 1,133 30,742 892 26,856 1,417 38,272 1,064 31,428 
Total 43,788 13,461,525 48,480 11,240,021 80,393 12,624,434 40,456 7,302,996 
 
The private institution which is outsourced for invest igation is the Copy Right Protection Center and 
SW Report Center.  The investigation activities of these institutions are as follows.  
 
Enforcement result by the Copy Right Protection Center  
 
- Online 
(unit : case, item) 
2005 2006 2007 2008.8.31 
    
Case Item Case Item Case Item Case Item 
P2P 1,451  8,168,246  5,179  2,316,667  985  1,763,426  129  378,735 
webhard 3,481  3,464,319  1,817  4,473,635  4,420  5,374,930  1,629  2,142,795 
portal 439  156,559  2,960  1,630,623  21,538  1,342,010  10,087  1,126,423 
others 263  9,335             Music 
total 5,634  11,798,459  9,956  8,420,925  26,943  8,480,366  11,845  3,647,953 
Table (Cont'd)WT/TPR/M/204/Add.1 
Page 104  
 
  2005 2006 2007 2008.8.31 
    
Case Item Case Item Case Item Case Item 
P2P 13,895  189,249  8,958  204,215  3,672  125,062  1,142  118,124 
webhard 16,750  120,275  26,530  295,459  44,399  610,022  24,331  646,867 
portal 1,659  30,725  162  17,076  2,114  17,379  416  2,804 
others 1  654             Video 
total 32,305  340,903  35,650  516,750  50,185  752,463  25,889  767,795 
P2P 96  275,406  77  365,742  108  721,440  66  412,126 
webhard 1,020  591,127  309  1,682,515  305  2,511,588  244  2,063,060 
portal 415  13,664  11  18,562  41  194  280  96,359 
others                Books 
total 1,531  880,197  397  2,066,819  454  3,233,222  590  2,571,545 
Total 39,470  13,019,559  46,003  11,004,494  77,582  12,466,051  38,324  6,987,293 
 
- Off-line  
(unit : case, point) 
2005 2006 2007 2008.8.31. 
 
Case Amount Case Amount Case Amount Case Amount 
Music 2,180 300,556 666 88,722 398 32,917 216 26,010 
Video (DVD, etc) 422 80,729 500 106,584 474 77,126 459 243,552 
Books 583 29,939 419 13,365 522 10,068 393 14,713 
Total 3,185  411,224 1,585 208,671 1,394 120,111 1,068 284,275 
 
Investigation cases by the SW Reporting Center  
(unit : case) 
  2004 2005 2006 2007 2008.8.31. 
Reported cases 1,921 2,110 2,172 2,090 1,439 
Illegal casees 1,205 1,133 892 1,417 1,064 
 
Question 
 Page 89, paragraph 198:  The Secretariat has provide d several statistics relative to criminal actions 
that took place in 2007.  But no statistics are provi ded to indicate how many convictions resulted from 
those cases where criminal charges were filed.  Could Korea please provide those statistics?  
 
Answer 
 Official statistics is not available. 
 
IV. TRADE POLICIES BY SECTOR 
(v) Telecommunications  
Question  Page 119, paragraph 101:  The Secretariat’s report notes that, "In 2008, the Ministry of Information 
and Communications  (MIC) and the Korea Broad casting Commission  (KBC) were merged into the  WT/TPR/M/204/Add.1 
 Page 105 
 
 
  KCC to form a completely independent single regul atory entity, under the President's Office."  In 
what way is the new regulatory entity "completely independent"?  
Answer 
 The Act on the Establishment and Operation of KCC wa s enacted and has been implemented in order 
to guarantee the independent operation of the new regul atory entity. According to the Act, supervision 
by the Prime Minister is excluded for the licen sing of broadcasting op erators and broadcasting 
programming. In addition, the status of th e standing commissioners' of the KCC is guaranteed. 
Political activities of the standing commissi oners' of the KCC are also prohibited. 
 
UNITED STATES – FOLLOW UP
 
 
The "New Excellent Product" Certification Syst em (Page 63, Paragraph 96 of the Report)  
 Question 
 
From Korea's response, is it correct to understand that the "additional point in procurement" of 
products certified as NEP (New Excellent  Product) is only given in proc urements that are set-aside for 
small- and medium-sized businesses (SMEs) and that it is never given in other procurements (that is, 
procurements not set-aside for SMEs)?    
Where an additional point will be given for NEP-cer tified products, is that criterion set out in the 
notice of intended procurement or in the tender documentation?   
Answer 
 
1. Korea would like to stress that an additional  point for NEP-certified products acquired by 
small and medium enterprise, is applicable to domes tic tendering, but not to international tendering. 
 2. The criterion is prescribed in Public Pr ocurement Service Announcement No. 2007- 12 
(24 Apri, 2007) and Small and Medium Business Administration Announcement No. 2008-36 (18 February, 2008), respectively. 
 
Question  Telecommunications, Page 119, Paragraph 101   
We thank Korea for its response.  As a follow-up question, can Korea please clarify whether or not 
the Prime Minister or another official in his Cabine t has the ultimate authority for telecom licenses, or 
does this apply to both broadcasting and telecom licenses?  
Answer 
 
The Korea Communications Commission is a central administrative organization under the presidential office. The KCC has the ultimate authority for both broadcas ting and telecom licences.  
 
MALAYSIA
 
 Question 
 1. What percentage of Korea’s total exports and imports goes to or comes from countries with 
which it has preferential or free-trade agreements?  WT/TPR/M/204/Add.1 
Page 106  
 
  Answer 
 Korea currently has FTAs with Chile, Singapore, EFTA, and ASEAN. Korea has signed  (2007) but 
not yet ratified a FTA with the United States.  
Excluding the United States, as of the end of 2 007, exports and imports going to or coming from 
countries with preferential or free-trade agreements accounted for 11.6% and 11.4%, respectively. In 
terms of trade volume, this accounts for 11.5%. 
If we include the United States, exports, im ports, and trade volume becomes 23.9%, 21.9%, and 
22.9%, respectively. 
 
Question  2. Has the trade volume been increasing since the ASEAN-Korea Trade in Goods Agreement 
went into effect?  (if not, what is the reason behind that?)  
 
Answer 
 In the case of the Korea-ASEAN FTA, it is too earl y to state its benefits as it has only been one year 
since the FTA came into effect, but according to our assessment, the FTA has contributed to 
expanding bilateral trades.  
 
During the time since the Agreement came into effect, exports and imports increased by 24.9% and 
21.0%, respectively, and trade volume increased by 23.1%, or 15.3 billion dollars.  
 
Question 
 
3. When will Korea ratify the Trade in Serv ices Agreement under the ASEAN-Korea Free Trade 
Area?   
Answer 
 
The Korean government hopes that the Trade in Services Agreement betw een Korea and ASEAN 
signed in 21 November 2007 would be ratified before the end of 2008. 
 
NEW ZEALAND
 
 
1. Trade policy strategy 
(WT/TPR/S/204, p. 20, para. 15) 
 Question  The Secretariat notes that Korea’s trade policy objec tive is to build a free and open economy based on 
market principles.  The review also notes that Korea maintains disproportionately high levels of 
border protection in the form of tariffs.  Could Korea explain how it balances an open market with 
high levels of protection?   
Answer 
 
Korea's average applied MFN tariff is 12.8%, rel atively high among the OECD countries, the trade-
weighted average tariff which is meaningful in the international tr ade is only 3.8% as of 2007.  
  WT/TPR/M/204/Add.1 
 Page 107 
 
 
  Korea looks forward to progress of the WTO/DDA negotiation pending the ne gotiation, there is no 
autonomous liberalization plan.   There is no change in the Korean government position fo r its trade policy objective to build a free and 
open economy based on market principles.  
 
2. WTO notifications 
 (WT/TPR/S/204, p. 22, Table 11.1) 
 Question 
 
The report indicates that Korea has not supplied an y notification of imports  under tariff rate quotas 
since 2002.  Could Korea advise when it proposes to notify WTO of imports under tariff rate quotas?   
Answer 
 
In March 2007, Korea notified the WTO Committee on agriculture of imports under tariff rate quotas 
until 2004. And Korea will notify WTO of im ports under tariff rate  quotas from 2005.  
 
3. Tariffs 
(WT/TPR/S/204, p. 38, para 2)  
Question  The Secretariat notes that Korea intends to reduce or remove gradually the non-ad valorem duties and 
the flexible tariffs in line with the outcomes of the DDA.  Given continuing delays to the conclusion 
of the Doha Round, how does Korea propose to undertake this process of reform?  
 
Answer 
 Korea is actively participating in the DDA negotiati ons and hopes to conclude the round as soon as 
possible. Pending the agreement, the Korea governme nt does not have any plan to amend the tariff 
structure.  
4. Tariff quota administration 
(WT/TPR/S/204, p. 53, para 59) 
 
Question 
 The Secretariat report  (p. 53, para 58) suggests that  imports may be restricted by the consistently 
large unfilled share of tariff rate quotas and that this  situation may be due to the administration and 
allocation of tariff rate quotas by some 22 organisati ons.  Could Korea explain what efforts it intends 
to take to minimise under-fill of these quotas?  
 
Answer 
 For the last 3 years, average quota fill rate has b een 67% on average, exceeding the average rate of 
the WTO member countries (60%). The reasons as to  why some of the products have low tariff rate 
quota fill rates are considered to be SPS measures,  domestic price fall due to overproduction, price 
surge of imported agricultural products, domestic surplus stock, changes in industrial structure and 
decrease in import demand caused by economic downturn.     WT/TPR/M/204/Add.1 
Page 108  
 
  To improve quota fill ratio, the government is applying following measures.  
  - In case auction of import license is failed, restart auctioning process.   - In the case of successful bidders who do not import the full amount within the 
implementation period, their deposit money goes to the relevant fund. And for the 
next 3 years, the government may prohibit them from bidding for import license 
auction of all products.  
 To make more bidders participate in auctioning, managers of auctioning agency make public notice 
about information concerned on the newspapers or on their webpages. 
 
Question  The Secretariat report (p. 53, para 59) notes that a credible import administration would require that 
directly interested parties were not directly invo lved in controlling imports.  This is not the case in 
Korea where state-trading enterprises and producer as sociations still administer tariff rate quotas. New 
Zealand notes that Korea has stated "there is no concern over the influence members might exercise 
with regard to reallocation".  Can Korea provide addi tional details to further support this statement?  
 
Answer 
 
For the last 3 years, average TRQ fill rates of st ate trading products are 84 %. Jujube  (98%), 
chestnuts  (86%), natural honey (99%), and the products administered by the producer association have significantly high TRQ fill rates. Relatively la w fill ratios of some states’ trading products are 
due to import demand decline resulting from domestic producti on surplus, quality gap between 
domestic and foreign cars, etc.  
 
5. Contingency measures 
 (WT/TPR/S/204, p. 57, para 73) 
 Question  
The Secretariat notes that Korea's legislation on cont ingent protection was amended in respect of the 
method of calculating the dumping margin.  What  was the reason for this amendment and what 
change did it make to the way in whic h the dumping margin is calculated?"  
 
Answer 
 
Please refer to the answer to China 2nd set’s question 2 (contingency measures). 
 
6. Standards 
(WT/TPR/S/204) 
 
Question 
 The Secretariat report (p. 61, para 87) identifies th e range of agencies responsible for regulating food 
safety and quality, their responsibilities sometimes overl apping.  How does Korea ensure that its SPS 
regulatory environment is consistently a pplied by the various import agencies?  
 
Answer 
 SPS regulatory responsibilities among various agencies in Korea do not overlap with one another.  
Ministry for Health, Welfare and Family Affairs (MIHWAF) and Korea Food and Drug  WT/TPR/M/204/Add.1 
 Page 109 
 
 
  Administration (KFDA) and Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) have 
cooperated in the SPS regulations. They conduct SPS related affairs according to the kind and 
intended use of food.  
 
Question 
 
The Secretariat report  (p. 65 para 104) notes that an imal and animal products are subject to laboratory 
testing and epidemiological investigations.  New Zealand understands that Korea has made 
amendments to its Livestock Infections Disease Prev ention Act which gives powers of review to the 
legislature.  How does Korea align its SPS measures to the WTO SPS agreement that requires all SPS 
measures to be scientifically justified?  
 
Answer 
 According to the Livestock Infections Disease Pr evention Act amended, only importing beef from 
countries with history of BSE are subject to revi ew at the National Assembl y. Therefore, the review 
process is not applied to all SPS measures.   The Korean government will respond to the delibera tion based on the results from scientific and 
technical reviews through the import risk analysis process  (8-staged process).  
 
7. Government procurement 
(WT/TPR/S/204, p. 67, para 112) 
 Question  
The Secretariat report notes that 70% of the procurement market involves purchases undertaken 
directly by public institutions.  However, accord ing to the Report by Korea  (para 37), government 
purchases via KONEPS accounted for 52% of total government procurement.  Could Korea explain why there is a difference in these percentages?   
Answer 
 
When public entities procure directly, they hav e options to use KONEPS. The Government 
Procurement volume via KONEPS accounted for 43.8 trillion won  (around 52 % of total government 
procurement volume) : 56% (24.5 trillion won) of which was procured by PPS and 44%  (19.3 trillion 
won) by direct purchasing of public entities. 
 
8. Taxation 
(WT/TPR/S/204, p. 72, para 130) 
 Question  
The Report notes that Korea applies a complex indirect tax structure comprising a number of taxes to 
a range of products.  What plans does Korea have to reform and simplify its complex indirect tax 
structures?   
Answer 
 
Please refer to the answer provided to Switzerland’s question  (Chap. III, para. 133). 
 WT/TPR/M/204/Add.1 
Page 110  
 
  9. Agriculture 
(WT/TPR/S/204, p. 91, para 6) 
 Question  
New Zealand notes the reference to "…self suffici ency policies aimed at addressing food security 
concerns" suggesting that Korea may hold the view that food security depends mainly on domestic 
production  (p. 91, para 7).  The report notes that domestic support  (in combination with high border 
tariffs) distorts agricultural production and trade,  and results in Korean consumers paying much 
higher prices for agricultural products  (on average well over double world levels).  Food security can 
also be seen from the perspective that people should be able to buy food at a market-driven price, 
rather than one inflated by market intervention and barriers to trade. What efforts are Korean 
authorities making to ensure that support for farm ers does not result in market distortions?  
 
Answer 
 
Korea has been faithfully well implementing the reduction commitment of agricultural subsidies and 
tariffs and the other subsidies programms are fully consisted with relevant articles of Agreement of 
Agriculture Also Korean authorities are making efforts to shift trade and market distorting policies of 
price support toward more market-oriented support po licies including the abolishing of price support 
for rice.  
 
AUSTRALIA
 
 
I. ECONOMIC ENVIRONMENT 
(7) T RENDS AND PATTERNS IN FOREIGN DIRECT INVESTMENT  
 
Question  1. The Korean Government has facilitated outward  bound foreign direct investment in order to 
enhance the competitiveness of domestic enterpri ses  (Secretariat Report I, 7, 28, page 12). 
 
Would Korea please indicate if it would promote investment in the agriculture sector of partner 
countries as a means to ensuring food security?   
Answer 
 
Currently, Korea does not have any measure in place to promote investment in the agriculture sector 
of partner countries. 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(4) T
RADE POLICY OBJECTIVES  
 Question 
 2. Australia notes that Korea’s net support for agriculture  (3.3% of GDP) exceeds agriculture’s 
contribution to GDP  (3.2% in 2006). This overall leve l of assistance for agriculture is well above the 
OECD average.  Further, tariff protection averag es 53.5% for agricultural products and eight times 
higher than for industrial tariffs. 
 In addition to any Doha outcome, does Korea intend to reduce the level of its agricultural support and 
tariffs?   WT/TPR/M/204/Add.1 
 Page 111 
 
 
  Answer 
 Korea is planning to reduce agricultural support and tariff in accordance with DDA agricultural 
negotiation agreement.  
 
(6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements  
 
Question  
3. Australia recognises Korea’s strong advocacy of the multilateral trading system as a 
fundamental means to achieve economic growth an d development. Australia also recognises Korea’s 
efforts on the bilateral front to enhance relations w ith its trading partners. Korea has actively pursued 
a number of comprehensive FTAs as part of its st ated objective to complement multilateral trade 
liberalisation. As noted in the Secretariat Report  (II, 6, iii, 34, page 28), Korea’s secondary FTA 
objective is to facilitate domestic  reform and deregulation.  
 What are Korea’s goals for reform and deregulation of its agricultural sector? 
 How will Korea seek to achieve these goals and within what timeframes? 
 Answer   Goals for reform and deregulation of agricultural sector   - to meet the challenges from market  oriented environment thereby promoting 
sustainable development of Korean agriculture.   
 
 Specific policy instruments  - restricting policies including producer ret irement and market oriented reforms.  
Strengthening fundamentals through im provement of agricultural structure 
 
(7) F
OREIGN INVESTMENT REGIME  
 
Question  4. Australia notes that while Korea welcomes inwa rd FDI, its ‘share of global inward FDI has 
reportedly been declining steadily since 2004’.  Aust ralia understands that Kore a agreed to liberalise 
elements of its foreign investment regime for United States investors upon entry into force of the 
Korea-United States  (KORUS) free trade agreement  (for example, the telecommunications sector). 
 To encourage FDI, will Korea extend the libera lisation of its foreign investment regime under 
KORUS to all investors?   Answer  In consideration of various interests of the parti es concerned, including Australia and other countries 
that are willing to pursue or are currently under ne gotiation with Korea for a Free Trade Agreement, 
Korea will discuss ways to bring about a win-win s ituation for both sides of the negotiation on a 
reciprocal basis.  WT/TPR/M/204/Add.1 
Page 112  
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures (b) Free trade zones 
 Question 
 5. Australia understands that the Free trade z ones are exclusive areas outside the national 
customs boundary, exempt from customs requirements.  Activities in the zone may be exempt from 
import procedures and customs duties, and receive tax relief  (e.g. VAT and reduced corporate tax).  
Korea states that this treatment does not constitute a subsidy specifically provided to an enterprise or 
industry or group of enterprises or industries; and is therefore not subject to notification to WTO 
pursuant to Article 25 of the WTO Agreement on Subsidies and Countervailing Measures.  Is reducing corporate tax an appropriate means of a ssisting exporters and is this treatment compliant 
with WTO Agreement on Subsidies and Countervailing Measures?  
 
Answer 
 Among foreign invested companies, manufacturing companies that invest more than 10 million dollars and logistics companies that invest more than 5 million dollars are subject to a 5 year 
corporate and income tax holiday and to an 8 to 15  year local tax holiday  (tax reduction is not 
provided to domestic companies).   A tax holiday is given according to the investme nt amount coming from foreign invested companies, 
not export volume  (whether it is for export or fo r domestic consumption). Therefore, this does not 
qualify as a prohibited subsidy.  
 A reduction in corporate tax is based on objective criteria  (FDI of foreign invested companies). Since 
the above mentioned tax incentives are not limited to  the corporation based in certain area and it 
does not constitute a subsidy specifically provided to  an enterprise or industry or group of enterprises 
or industries (nor an exporting company), and therefore,  a reduction in corporate tax is not subject to 
WTO notification.  
(ii) Customs valuation 
 
Question 
 
6. Korea's customs valuation legislation  (sub- section 2 of the Customs Act 1949) complies with 
the WTO Agreement on Customs Valuation.  Australia  notes that the Korean Customs Service  (KCS) 
has introduced a system  (SIREN) for calculating "proper import prices" and comparing them with 
declared prices in an effort to detect undervaluation.   
Could the Republic of Korea please outline how SIREN calculates "proper import prices"?  
 
Answer 
 Firstly, KCS investigates prices from various sources such as related offices  (Korea Agro-Fishery 
Trade Cooperation, Ministry for Food, Agricultu re, Forestry and Fishery etc) and related companies 
 If we put the prices into the SIREN system, which uses statistic methods, the system can produce fair 
prices by comparing the import price with the prices of like products. 
  WT/TPR/M/204/Add.1 
 Page 113 
 
 
  (iii) Tariffs 
 
Seasonal duties  
(d) Bound tariff 
 
Question  7. Australia notes that seasonal duties  (III, para graph 44, page 50) were applied in 2004 to 
Chilean grapes. 
 
What was the period of time for which the duties were applied?   
Answer 
 
Under the KCFTA, Korea levies pref erential duties on Chilean grapes from November to April when 
grapes are out of season in Korea and general duti es from May to October. Korea plans to reduce 
tariffs to zero by 2014. 
 
Question  
8. Australia notes that the Republic of Korea's tariff schedule is extremely complex with 
11,279 tariff classifications, each with a multiplicity of  rates. Access to many of those rates depends 
on the applicability of flexible tariffs, adjustment ra tes and the different rules of origin for various 
FTAs.    
Rather than waiting for the outcome of the WTO negotiations, would Korea consider unilaterally 
streamlining its tariffs in order to reduce regulator y burden, provide immediate savings to government 
and to business through reduced administration and reduced compliance costs, as well as through 
improved opportunities for the application of self-assessment, paperless trading, risk management and post-entry audit techniques?   Answer  Please refer to the answer to Switzerland’s question  (tariff). 
 
(g) Tariff preferences and rules of origin (ROOs) 
 
Question  9. Korea continues to operate both preferential and non-preferential rules of origin.  Each of Korea's FTAs has separate and non-identical rules of origin, which increase the complexity of its 
tariff.  For example, rules of origin under th e Korea-Chile FTA are based on the "goods wholly 
obtained" and the "substantial transformation" criteri on.  The value added rule is also applied to 
selected agricultural and industrial products.  A numb er of clothing items are subject to only specific-
process rules.  Divergent and complex rules of origin, which differ in concept, detail, and 
administrative process, add to the trading costs, thus complicating the trade facilitation process. 
 
Given the divergent and complex nature of its pref erential rules of origin, does Korea plan to seek 
more consistency in future preferential agreements and if so which approach to rules of origin does 
Korea favour?   WT/TPR/M/204/Add.1 
Page 114  
 
  Answer 
 Korea is seeking harmonized rules of origin in FTA ta lks. As each nation has its own interest in each 
sector, however, Korea should consider such diversity, and we are also aware of the inevitable reality 
that we currently have rather diverg ent and complex rules of origin.  
 
Korea will engage in the talks while seeking cons istency in rules of origin and abiding by 
international rules. In this regard, Korea will tr y to develop common rules of origin for future FTA 
negotiations  
 
(iv) Tariff quotas (a) Agricultural tariff quotas 
 
Question  
10. Australia notes that state trading enterpri ses impose additional mark-ups on top of the in-
quota tariff on items such as rice, garlic, onions, pine nuts, sesame, ground nuts, buckwheat, peppers, 
mung beans/red beans and soybeans  (Part III, pa ragraph 60, page 54, Secretariat’s Report).  
 How do Korean authorities determine the level of the mark-up for each product it is applied to?  
 Answer  As a result of UR negotiation, Korea's Country sche dule stipulates the authority to impose mark-up 
on some of the products.  Based on the relevant  WTO rules, Korea can levy mark-ups on those 
products within the differential between  domestic prices and import prices.  
 
Question  11. Korea applies a significant number of tariff quotas on agricultural products – approximately 179 (Part III, paragraph 58, page 53, Secretar iat’s Report).  However, information on the 
administration of these tariff quotas is difficult to ascertain due to the absence of MA:1 tariff quota 
notifications  (most recent notifi cation was for calendar year 2001).  
 a) For each agricultural product that h as a tariff quota, would Korea please provide 
details on how the tariff quota is administered  or advise how this information can be 
obtained?  
 
 b) Why have the MA:1 notifications not been provided since 2001? 
 
Answer to a) 
 The Korean government operates the recommendatio n guideline on concession tariff of market access 
volume for agricultural and livestock products. And the public notification of guidelines is made on 
the homepage of the MIFFAFF ( Ministry for Food, Africulture, Forestry and Fisheries).  ( In the 
case of forestry, notice is made on the website of the National Forestry Service )   Answer to b)  
There had been changes made with TRQ administrati on methods including introduction of auctioning 
for some of the products like sesame, potato, ging er. etc. After preparing relevant materials, the 
changes will be notified in due course.   
  WT/TPR/M/204/Add.1 
 Page 115 
 
 
  Question 
 12. The Korean Government can monitor the performance of state trading enterprises and 
producer associations entrusted with the administra tion of tariff quotas, and demand the submission of 
necessary materials and, if necessary, take punitiv e measures  (Secretariat Report, III, 2, iv, 59, 
page 53).  
  a. What mechanism does Korea employ to  monitor administration of tariff quotas? 
 b. What punitive measures does Korea use?  c. What punitive measures have been applie d by the Korean Government since Korea’s 
last trade policy review? 
 
Answer to a 
 The Korean government, if necessary, can make reco mmendation agencies or import licence auction 
authorities submit the record of TRQ recomme ndation, customs and public auction. 
 Answer to b  In the case of the successful bidders who do not import the full amount within the implementation 
period, their deposit money goes to the relevant f und. And for the next 3 years, the government may 
prohibit them from bidding for import license auction of all products.    
 Answer to c  In the case of the successful bidders who did not implement the full amount importation within the 
implementation period, their deposit money went to  the relevant fund. They were prohibited from 
participating in import license auction of a ll products for the following 3 years.  
 
Question  13. Australia notes (III, 2, iv, 60, page 54)) that Korea intends to improve the current quota 
administration system whenever necessary.  
  What measures and policies has Korea pu t in place to facilitate this process?  
 What improvements have been made since Korea’s last trade policy review?   Answer  Ginger volume for auctioning was increased  (in 2005). 
Auctioning has been applied for some parts of increased sesame TRQ volume. 
In 2007, auctioning was introduced for onion, a state trading product.  
 
(vii) State trading 
 
Question  14. Australia welcomes Korea’s intention to s ubmit their STE notification to the WTO in 2009 
(Part III, paragraph 71, page 56, Secretariat’s Repor t) and encourages Korea to submit the notification 
early in the year.   In the interests of increasing the transparency of the multilateral trading system and the usefulness of 
the WTO notification system, will Korea submit its future STE notifications every two years in WT/TPR/M/204/Add.1 
Page 116  
 
  accordance with Article XVII of GATT 1994 and th e Understanding on the Interpretation of 
Article XVII of GATT 1994?  Will the foreshadowed STE notification cover the en tire period from the last notification to the 
present  (i.e. 1998-2008)? 
 
Why have Korea’s STE notifications not yet been made?   
Answer 
 
The Korean government is planning to notify the WTO of state trading according to Article XVII of 
GATT 1994 and the Understanding on the Interpretation of Article XVII of GATT 1994.  The next notification will cover the period after 1997. But the exa ct period of Korea's next notification is still 
under consideration.     
There have been changes made in TRQ administration methods such as introduction of import license 
auction. After relevant documents have been prepa red, notification will be made in due course.  
 
Question  15. A number of products  (potatoes, ginger, ses ame, etc.) are no longer imported exclusively by 
the designated agency, but are also imported by pr ivate importers buying quotas at agency auctions  
(Secretariat Report, III, 2, vii, 71, page 56).  What proportion of each product is imported by the d esignated agency compared to private importers?  
 Answer  Approximately 70 % of total tariff quota volume fo r ginger is administered through auctioning. In the 
case of sesame, auctioning is used for increased volume. Potatoes are no longer imported by the 
designated agency. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Financial assistance 
 
Subsidies 
 Question 
 16. In 2006 Korea’s net agricultural support exceeded  the agricultural sector’s GDP contribution. 
Most assistance involves product-specific market price support, resulting in Korean consumers 
paying, on average, more than double world levels . Korea has no laws specifically limiting subsidy 
programs that may be anti-competitive  (Secretariat Report III, 4, ii, 148, page 76).  
 
 a. Which government agency is responsible for the comprehensive control of subsidies?  
  b. Has the Korea Fair Trade Commission unde rtaken any work on the impact of these 
subsidies?  
 
Answer to a 
 The Ministry for Food, Agriculture, Forest and Fi sheries is responsible for the management of 
agricultural subsidies.   WT/TPR/M/204/Add.1 
 Page 117 
 
 
  Answer to b 
 No, the Fair Trade Commission has not been related to subsidy policies. 
 
Directed lending and industrial development  
 
Question  17. The Korea Development Bank's web-site notes that "Over the past five decades, KDB has 
provided vast amounts of industrial capital th rough traditional banking services like loans, 
investments, and guarantees to help develop Korea's industries and the national economy. 
 The capital made available by KDB has facilita ted the development of  key manufacturing and 
chemical industries during the 1960s and 1970s.  Since the 1990s, KDB has focused on cultivating 
technology-based industries, such as semiconductors, in line with efforts to boost Korea's strategic 
industries. 
 Moving forward, KDB plans to cultivate Korea' s next generation growth industries, namely, 
knowledge-based industries and 6T industries, such  as information technology, biotechnology, and 
nanotechnology.  In addition, KDB will support the government's efforts to diversify the nation's 
economic growth channels throug h the expansion of national infr astructure through SOC and other 
development financing."  
 As a government-owned bank, it is not necessarily c onstrained by the same constraints as commercial 
banks and can direct lending to favoured industries, including focusing on knowledge-based and 6T 
industries as noted on the bank's web-site.  Furt her, the United States Tr ade Representative has 
written that "US industries have reported that le nding and equity investments by the KDB have 
contributed to overcapacity in certain Korean i ndustries and have allowed Korean companies to 
compete unfairly with US companies."   How does the KDB plan to cultivate th ese industries, and will it entail directed loans, equity injections 
or other financing?  
 
Answer 
 The KDB provide financing support to assists know ledge-based industry and 6T industry in a direct 
assisting method on a commercial basis from the fu nd collected with the market interest rates. 
 
In the future, after the privatization of the KDB,  the newly established Korea Development Fund is to 
adopt indirect assisting method like the case of Germ any by providing guidelines on assisted targets 
and by allowing intermediary financial ins titutions to select assisted companies. 
 
(vi) Intellectual property rights 
 
Question  18. Penal provisions for rights infringement of pa tents, utility models, trade marks and industrial 
designs are available under the present legislation fo r falsely indicating such a right or fraudulently 
obtaining one  (paragraph 171 refers). 
  - What are the criteria for fraudulently or unjustly obtaining a right?   WT/TPR/M/204/Add.1 
Page 118  
 
  Answer 
 The criteria for fraudulently or unjustly obtaining  a right is whether an applicant obtained a right 
through fraudulent or unjust actions such as s ubmitting false or faked data in fraud of the patent 
examiners. However, filing an application without notifying the patent examiner of prior arts known 
to the applicant does not constitute a fra udulent or unjust obtaining of a right. 
 
Question  19. Extension of the term of patent for pharma ceutical or agricultural chemicals undergoing 
certain market-approval procedures is available for up to five years. 
  - What are the processes for consideration of the extension of patent term for 
pharmaceutical or agricultural chemicals, a nd what are the relevant parts of Korea’s 
legislation?  
 
Answer 
 Article 89 of the Patent Act provides for the extension of patent term, where authorization or 
registration under other laws or regulations is required to work a patented invention and an extended 
period has been taken to complete the activity te st, safety tests and so on necessary to obtain the 
authorization or registration.  
 An applicant requesting for an extension must submit an application to register an extension of the patent term with proof of the necessity of paten t term extension under Article 89, the period during 
which the patented invention could not be worked  due to authorization or registration, and the 
patentee is the same person who was granted  the authorization or registration.  
 An application to register an extension for the term of a patent right must be filed within three months 
after the date on which the authorization or regis tration under Article 89 was obtained; however, the 
application may not be filed when the unexpired length of a patent right term is less than six months. Those procedures are stipulated in Articles 90 to 93 of the Patent Act and Articles 52 to 54 of the 
Patent Act Enforcement Ordinance.  
Question  20. The scope of the 2007 amended Trade Mark Ac t extended to include all types of mark that 
can be visually recognized.  
   Are there any intentions to broaden the scope of protection for non-traditional marks 
such as scent and sound?  
 
Answer 
 
The Trademark Act as amended in 2007 extended the scope of protected marks to all types of mark 
that can be visually recognized such as color ma rk, hologram and motion mark. The objective of this 
amendment is to reflect the increased need for ext ending the subject of protection as these new types 
of trademark became widely used according to adv ancement in industrial technology. In addition, we 
are in the process of amending the Trademark Ac t to protect non-traditional marks such as scent and 
sound to implement the Korea-US FTA. 
  WT/TPR/M/204/Add.1 
 Page 119 
 
 
  Question 
 21. The Trade Marks legislation prevent registra tion of trade marks consisting of "conspicuous 
geographical name"   
 - What is the criterion for "conspicuous geographical name"?  
 
Answer 
 The Trademark Act stipulates that any trademark c onsisting solely of a c onspicuous geographical 
name may not be registered.  
 "Conspicuous geographical names" refers to the na mes of countries, Seoul, metropolitan cities or 
provinces; the names of cities, counties, districts of Seoul, metropolitan cities or provinces; the names 
of famous foreign capitals, large cities, provinces or  other equivalent administrative districts; and the 
names and abbreviations of well-k nown domestic or foreign historic sites, tourist places and main 
streets. The determinations of whether a ma rk is a conspicuous geographical name requires a 
widespread perception shared by general consumers in Korea or the trading community. Even though 
a trademark consists of, inter a lia, a conspicuous geographical name, yet the mark may be deemed 
registrable if the conspicuous geographical name may not be perceived 
 Question 
 22. Paragraph 178 of the report indicates that any trade mark containing geographical indications 
for wines or spirits originating in any WTO Member cannot be registered.   
 - How does a WTO member with a trade mark consisting of registrable elements as 
well as a geographical indication where the goods originate in the geographical 
indication apply for registration in Korea?  
 
Answer 
 
A mark containing geographical indications for wines or spirits can be registered as a collective 
mark. However, the mark has to meet the following conditions: 1)  the mark shall be a geographical 
indication; 2) it should be filed by a group of people having the authority  to use the mark relevant to 
the geographical indication; 3) th ere shall be no same or similar trade marks which were filed or 
registered prior to the application. 
 
An eligible applicant is any legal entity which is jointly founded by persons  that is engaged in the 
business of producing, manufacturing, processing, c ertifying, selling goods or providing services and 
which comprises only those persons engaging in the business of producing, manufacturing or 
processing goods for which a geographic al indication can be used.  
 
To register a collective mark as a geographical indica tion, the legal entity must submit an application 
with the following:  
 
(1) a sample of the mark to be used as a geographi cal indication, (2) an abstract of the articles of 
incorporation of the legal entity, (3) documents that show a given quality, reputation or other 
characteristics of goods; proof th at the quality, reputation or other characteristics of the goods are 
essentially attributable to the characteristics of the geographical environment; the specific region 
referred to in the geographical indication and the appropriateness of the range; confirmation that the 
legal entity comprises persons who are engaged in producing, manufacturing or processing goods to 
which a geographical indication is applicable; confir mation that the legal entity consulted with the WT/TPR/M/204/Add.1 
Page 120  
 
  relevant local government entity regarding the application; and proof that the geographical 
indication is protected in the foreign country of origin. 
 
IV. TRADE POLICIES BY SECTOR 
2. A
GRICULTURE  
Domestic Support  
Question  23. Korea has certain regular notifications outst anding and such as notifications for domestic 
support commitments  (i.e. outstanding DS:1 notifi cations and any DS:2 notifications) and imports 
under tariff quotas  (MA:2) (while the last notifi cations for the above were submitted in 2007 they 
only covered calendar years 2001-2004).  When will Korea provide Members with an op portunity to review these notifications?  
 
Answer 
 In 2007, Korea made notifications on its import under tariff quota and dom estic support provided  
(2001~2004), and it plans to notify the subsequent data sets in due course 
 Question 
 24. Australia welcomes the decline in domestic  support provided by the Government of Korea 
from 68% to 63%  (PSE) in 2006. We note however , that this is still double the OECD average  
(Part IV, paragraph 12, page 93, Secretariat’s Report). 
 
What measures is Korea taking to reduce this amount further?   
Answer 
 Korea has a substantially high share of market pr ice supports in PSEs. Among them, the share of 
market price support for rice is especially high. In order to reduce it, the government has introduced 
direct income payment abolishing market price suppor t policies. Specially Korea adopted the direct 
payment mechanism for rice income and has implemen ted it up until now. As such, Korea is making 
its best efforts to decrease the level of market price support by bridging the difference between 
domestic and international prices.  
 
(ii) Policy developments 
 
Question  25. Australia notes the mid to long term measures Ko rea has adopted to cope with the recent rise 
in world food prices  (Part IV, paragr aph 9, page 92, Secretariat’s Report). 
  a. Would Korea please provide further details about the plans to extend the volume of 
tariff rate quotas for selected commoditi es?  For example, when will Korea 
implement this plan, for how long and for which products? Will these changes be 
permanent? 
  b. Will Korea consider lowering the tariff as well?   WT/TPR/M/204/Add.1 
 Page 121 
 
 
   c. Would Korea please provide more informa tion about its long term strategy regarding 
promoting Korean investment in agriculture  overseas? What actions have been taken 
to this end and what are the timeframes? 
 
Answer to a 
 
Every year, Korea voluntarily increa ses quota for low applied tariff rate of some agricultural and 
livestock products whose domestic production volume  is insufficient. Recently, this ariff rate quota 
has been expanded  to meet the challenges from hi ghinternational grain price. These products include 
some agricultural and livestock commodities. 
 
However such increase for these pr oducts will not be permanent. 
 Answer to b  
Korea does not consider lowering tariff. 
 Answer to c  In order to secure stable supply channel for food resources overseas, it is necessary to ensure 
adequate level of reserve stock, to diversify import routes and at the same time to promote private 
sector investment in overseas agricu lture from the longer perspective.  
 In this regard, Korea is basica lly now looking to stimulate priv ate-oriented investment policy in 
agriculture overseas, while the govern ment will work to facilitate the private investment by providing 
information, investor co mplaint service, etc.  
 
As part of this effort, Overseas Agricultural Development Cooperation Agency with public and 
private partnership was established. Upon the requ est of private companies, the agency provides 
relevant information.  
Long- term plan to facilitate overseas agricultu ral investment has not yet been developed.  
 
(iii) Selected activities (a) Rice 
 
Question  
26. Special treatment for Korea’s rice importa tion scheme was granted under the Uruguay Round.  
Special treatment was extended by WTO Members fr om 2005 to 2014  (Secretariat Report page 99).  
  - Will Korea seek to extend special trea tment for its rice importation scheme after 
2014?   
 Answer  The Korean government has not made any decision yet. 
 WT/TPR/M/204/Add.1 
Page 122  
 
  (c) Dairy  
 
Question  27. Australia notes Korea’s recent policies to re duce the national surplus of milk production. 
While introduction of the differen tiated pricing mechanism for surplus milk has reduced the volume 
of surplus milk purchased by the Korea Dairy Commi ttee, Korea’s current quota-based system of milk 
pricing appears to encourage overproduction of milk  and provide high levels  of support to producers 
with already high incomes  (Secretariat report V, 2, 34, pp 100-101).   
 a. Would Korea consider reducing support levels and deregulating the marketing of 
milk?  
  b. What efficiency and equity benefits  could be gained through deregulation? 
 Answer to a  The price policy based on current system is introdu ced not to support overproduction but to gradually 
reduce surplus production.   The raw milk adjustment fund is on the decrease, as the surplus of raw milk is falling. It will gradually 
be reduced so that overproduction does not arise,  with the exception of seasonally surplus milk, 
inevitable in the nature of dairy sector. And Support level for surplus milk will be reduced. As of 2008, support for surplus milk is 380 won/ ℓ ( accounting for 60 % of production cost of raw milk, 
635.44 Won/ ℓ). It is planned to be cut to less than 300 Won/ ℓ.  
 
Considering weak income base of dairy farmhouses, support is planned to be  reduced gradually.  
 Answer to b  Recently, price surge of feed is presenting dau nting challenges to dairy farm houses. Abruptly 
reducing quota may seriously erode income base of  farm households, leading to collapse of dairy 
sector and surge of unemployment. It is desirabl e that the government cushion the impact of quota 
reduction on farmhouses and encourage them to red uce overproduction gradual ly, by removing 20 % 
of quota at the time of quot a acquisition or transfer.  
 
(6) S
ERVICES  
(ii) Overall commitments under the GATS  
Question  28. Australia notes that to be able to provide professional services, such as legal, accounting, and 
audit and taxation services, foreign qualifications need to be approved in Korea.   
 
What is the foreign qualification process for professional service providers?  
Answer 
 
The procedures differ depe nding on the service areas. 
 The Ministry of Justice is currently seeking to enac t the Foreign Legal Consultant bill to systemize the 
legal services market liberalization. Now the Act will soon be submitted to the National Assembly.  WT/TPR/M/204/Add.1 
 Page 123 
 
 
  In order to regulate domestic practices of foreign- licensed lawyers, the bill stipulates the foreign 
qualification process that requires forei gn legal consultants to obtain permission from the Minister of 
Justice and register with the Korean Bar Association. 
 
Question 
 
29. Legal services form an essential pillar of business infrastructure that supports and facilitates 
international transactions cove ring both goods and services.  We note Korea has only made 
commitments on advisory services with substantial restrictions.  
Would Korea permit foreign legal professions to ente r Korea temporarily  (up to three months) to 
provide legal services of those jurisdictions in which they are qualified, without requiring that they be 
locally licensed or registered?  
Answer 
 
At present, Korea is working for the legislation of  the Foreign Legal Consultant bill to incorporate 
the results of FTA negotiations with the US.  Korea is expected to open the legal services market in 
three stages to promote the globalization and adv ancement of the domestic legal services sector and 
to protect domestic consumers.  
Korea did not consistently allow Mode 4 legal services during WTO/DDA and KOR-US and KOR-
ASEAN FTA negotiations.  Currently at the early stag e of legal service liberalization, Korea would 
not allow foreign lawyers to stay temporarily in  Korea to provide legal services, which reflects 
Korea's position in trade negotiations. Mode 4 co mmitment of allowing foreign-licensed lawyers to 
provide legal services in Korea can be reviewed wh en additional market opening is discussed after 
the legislation and implementation of  the Foreign Legal Consultant bill. 
 
(iii) Banking and finance 
Securities sector 
 
Question 
 
30. Australia notes that foreign providers of securities and securities-related businesses must be 
licensed by the Financial Services Commission.   - What is required under this licensing process?    - Is the licensing process unnecessarily burdensome or trade restrictive? 
Answer 
Requirements for establishing a securities firm  
Requirements for establishing a new securities firm in the form of a local business entity 
  Authorization requirements Relevant 
provisions 
1. Capital 
requirements An applicant shall be a stock company under the Commercial Act. 
An applicant shall maintain the necessary amount of capital to carry on securities businesses: 
- Brokerage, dealing, and underwriti ng: not less than 50 billion won; 
- Brokerage and dealing: not less than 20 billion won; 
- Brokerage: not less than 3 billion won; 
- Bond brokerage: not less than 2 billion won; 
- ECN: not less than 15 billion won. Article 28  (1) of 
the Act Article 32  (1) of 
the Act 
Article 14 of the Decree 
Table (Cont'd)WT/TPR/M/204/Add.1 
Page 124  
 
    Authorization requirements Relevant 
provisions 
2. Personnel 
requirements An applicant shall have a sufficient number of experts  in order to protect clients when carrying on 
the securities business where the application is filed. The officers and employees of an applicant shall not have any reason for disqualification 
prescribed by relevant laws and shall not have any record of being subject to suspension or 
discontinuation from office issued by supervis ory authorities, etc. for the last three years. 
The officers of an applicant shall not have any inte ntion to undermine the prudent management of 
the applicant. Article 32  (1) of 
the Act Article 17-2  (1) of 
the Act 
Appendix 2 of the Regulation 
3. Physical facility 
Requirements An applicant shall establish data-processing syst em, etc. necessary to carry on the authorized 
business in a stable and smooth manner. An applicant shall secure business space including o ffices, etc. necessary to carry on the authorized 
business. 
An applicant shall not have any legal obstacl e when supervisory authorities, etc. conduct 
inspections over major physica l facilities of the applicant. Article 32  (1) of 
the Act Article 17-2  (1) of 
the Act 
Appendix 2 of the Regulation 
4. Adequacy of 
business plan 
  
         An applicant shall be able to maintain not less t han 150% of net capital ratio and have appropriate 
and feasible estimates of revenues and expenditures. 
It is unlikely that the business plan violates re levant Acts and subordinate statutes and undermines 
sound financial practice. The relationship between the board of directors and the management, the composition and 
operation of the board of directors, and the aut hority and responsibility of an auditor shall be 
adequate to protect clients and shareholders and to  maintain the soundness of financial status and 
operation of the business. An applicant shall establish an appropriate inter nal control system in order to supervise the 
compliance with relevant laws, to manage risks and to prevent violations committed by the officers 
and employees after taking into account the scope and content of the business. Article 32  (1) of 
the Act 
Article 17-2  (2) of 
the Act Appendix 2 of the 
Regulation 
5. Requirements for major 
contributors <Where a major contributor is a financial institution> 
Securities service shall not be the main business. 
The equity capital shall be not less than four times of the contribution. 
The ratio of the financial prudence shall satisfy the minimum standard. 
The debt ratio of a conglomerate subject to th e limitations on cross shareholding or its affiliates 
under obligations shall not exceed 300%. 
A major contributor shall not make contributions from borrowings. A major contribution shall have no record of viol ating finance-related Acts and being imposed with 
fine or heavier criminal punishment for the la st five years, and shall meet other compliance 
requirements.  Article 32  (1) of 
the Act 
Article 17-2  (4) 
and 17-2  (5) of the Decree 
Appendix 1 of the 
Decree Appendix 3 of the 
Regulation 
 <Where a major contributor is a domestic corporation> 
The equity capital shall be not less than four times of the contribution. 
The debt ratio shall not exceed 200 %. 
The debt ratio of a conglomerate subject to th e limitations on cross shareholding or its affiliates 
under obligations shall not exceed 300%. 
A major contributor shall not make contributions from borrowings. A major contribution shall have no record of viol ating finance-related Acts and being imposed with 
fine or heavier criminal punishment for the la st five years, and shall meet other compliance 
requirements.  
 <Where a major contributor  is a domestic individual> 
A major contributor shall not be disqualified as officer. 
A major contributor shall have no record of viol ating finance-related Acts and being imposed with 
fine or heavier criminal punishment for the la st five years, and shall meet other compliance 
requirements.   
 <Where a major contributor is a foreign corporation> 
A major contributor shall conduct secu rities business in a foreign country. 
The equity capital shall be not less than three times of the contribution. 
The credit rating shall be above investment grade or  the standard on financial prudence prescribed 
by the foreign supervisory agency shall be satisfied. With respect to the financial business for the last  three years, a major contributor shall not be 
subject to corporate warning or heavier adminis trative measures, or fine or heavier criminal 
punishment imposed by supervisory authoritie s of Korea or a foreign country.  
A major contributor shall not be the largest shareh older, etc. of an insolvent financial institution.  
  WT/TPR/M/204/Add.1 
 Page 125 
 
 
  Requirements for establishing br anches of foreign securities firm  
  Authorization requirements Relevant 
provisions 
1. Capital 
requirements An applicant shall be a stock company under the Commercial Act. 
An applicant shall maintain the necessary amount of capital to carry on securities business.  
- Brokerage, dealing and underwriting: not less than 15 billion won - Brokerage and dealing: not less than 10 billion won 
- Brokerage: not less than 3 billion won 
- Bond brokerage: not less than 2 billion won - ECN: not less than 15 billion won Article 28-2 of the 
Act 
Article 32  (1) of the Act 
Article 15-3 of the 
Decree 
2. Personnel requirements  An applicant shall have a sufficient number of experts  in order to protect clients when carrying on 
the securities business where the application is filed. The officers and employees of an applicant shall not  have any reason for disqualification prescribed 
by relevant laws and shall not have any record of  being subject to suspension or discontinuation 
from office issued by supervisory author ities, etc. for the last three years. 
The officers of an applicant shall not have any inten tion to undermine the prudent management of the 
applicant. Article 32  (2) of 
the Act Article 17-3  (1) of 
the Decree 
Appendix 2 of the Regulation 
3. Physical facility requirements An applicant shall establish data-processing syst em, etc. necessary to carry on the authorized 
business in a stable and smooth manner. An applicant shall secure business space including o ffices, etc. necessary to carry on the authorized 
business.  
An applicant shall not have any legal obstacle when  supervisory authorities, etc. conduct inspections 
over major physical facilities of the applicant. Article 32  (2) of 
the Act Article 17-3  (1) of 
the Decree 
Appendix 2 of the Regulation 
4. Adequacy of 
business plan An applicant shall be able to maintain not less t han 150% of net capital ratio and have appropriate 
and feasible estimates of revenues and expenditures.  
It is unlikely that the business plan violates re levant Acts and subordinate statutes or undermines 
sound financial practice. 
The relationship between the board of directors and the management, the composition and operation 
of the board of directors, and the authority and responsibility of an auditor shall be adequate to 
protect clients and shareholders and to maintain  the soundness of financial status and operation of 
the business. 
An applicant shall establish an appropriate inter nal control system in order to supervise the 
compliance with relevant laws, to manage risks and to prevent violations committed by officers and 
employees after taking into account the scope and content of the business.  Article 32  (2) of 
the Act 
Article 17-3  (1) of the Decree 
Appendix 2 of the 
Regulation 
5. Requirements 
for major 
contributors The equity capital shall be not less than three times.  
The credit rating shall be above investment grade or the standard on financial prudence prescribed 
by the foreign supervisory agency shall be satisfied. With respect to the 
financial business for the last three years, a major contributor shall not be 
subject to corporate warning or heavier administr ative measures, or fine or heavier criminal 
punishment imposed by supervisory authoritie s of Korea or a foreign country.  
A major contributor shall not be the largest shareh older, etc. of an insolvent financial institution. Article 32  (2) of 
the Act 
Article 17-3  (1) and Appendix 1 of 
the Decree 
Appendix 3 of the regulation 
 
MEXICO  
 
Se solicita a la República de Corea responder a l as siguientes preguntas formuladas con base en lo 
señalado en el documento WT/TPR/G /204 del 3 de septiembre de 2008. 
 
Informe de Gobierno 
 
II. EVOLUCIÓN ECONÓMICA: 2004-2008 
2) I NVERSIÓN Y COMERCIO EXTERIOR  
 
El párrafo 17 indica que el déficit de los servicios  en Corea se ha mantenido por encima de los 
10.000 millones de dólares EE.UU desde 2005 y ha continuado creciendo hasta alcanzar los 
20.600 millones de dólares en 2007.  México desea conocer cuál es la causa principal del 
comportamiento creciente de las importaciones de servicios frente a las exportaciones de Corea.  
 
Answer 
 The service deficits of  Korea has enlarged every year, which already amounted to more than 
$10 billion in year 2005. These are mainly attributabl e to the continuous increase of  travelers’ 
demand and the enlargement of oth er business service activities.   WT/TPR/M/204/Add.1 
Page 126  
 
  The deficit in the balance of travel business has  increased from 6.3 billion dollars in 2004 to 
15.1 billion dollars in 2007.   The deficit in the other business service activitie s increased from 5.0 billion dollars in 2004 to 
8.4 billion dollars in 2007.  
 
The trend of balance of services 
(unit : $ billion) 
 2004 2005 2006 2007 
Balance  of Services -8.0 -13.7 -19.0 -20.6 
Balance  of Transportation 4.9 3.7 2.7 3.9 
Balance of  Travel -6.3 -9.6 -13.1 -15.1 
Balance of  Communications Services -0.2 -0.3 -0.4 -0.4 
Balance of  construction services 0.1 0.1 0.1 0.1 
Balance of  Insurance Sevi ces -0.3 -0.6 -0.6 -0.8 
Balance of  financial services 1.0 1.4 2.0 3.4 
Balance of  computer and information services -0.1 -0.1 -0.3 -0.2 
Balance of  Royalties and License Fees -2.6 -2.7 -2.6 -3.2 
Balance of  Other Business Services -5.0 -6.1 -7.2 -8.4 
Balance of  personal, cultural, and recreational services -0.2 -0.2 -0.3 -0.4 
Balance of  Government Services, n.i.e. 0.8 0.7 0.7 0.4 
 
OBSERVACIONES RECAPITULATIVAS 1) E
L ENTORNO ECONÓMICO  
4) E VOLUCIÓN DE LAS POLÍTICAS SECTORIALES Y  
5) Perspectivas;  y 
 
I. EL ENTORNO ECONÓMICO 2) E
VOLUCIÓN ECONÓMICA RECIENTE  
 
En el primer párrafo, se menciona que el potencial de crecimiento de Corea se ve menoscabado por la 
productividad de la mano de obra relativamente baja y por el menor crecimiento de la productividad 
total de los factores en el sector de los servicios.   El párrafo 21 indica que esto se debe a una excesiva 
reglamentación en el predominio de empresas estat ales y en la escasa presencia extranjera.  En el 
párrafo 6 del apartado 2) EVOLUCIÓN ECONÓMICA RECIENTE de la sección I. EL ENTORNO ECONÓMICO se establece que los índices de produc tividad en otros servicios también han sido 
decepcionantes, principalmente a causa de la protección que se concede al sector de los servicios en 
general.  México desea conocer si Corea tiene previstas reformas estructurales u otras reformas, 
además de las planteadas en servicios financieros, para facilitar desde el punto de vista regulatorio la 
participación de empresas extranjeras en el suministro  de servicios y en igualdad de condiciones que 
las empresas nacionales.  
En el último párrafo de las OBSERVACION ES RECAPITULATIVAS, ubicadas en el apartado 
5) PERSPECTIVAS, se menciona la continuación de las reformas de la reglamentación como 
complemento de otras, para dar una mayor flexib ilidad a la economía coreana y reaccionar de forma 
competitiva a la creciente competencia exterior.  México desea conocer a qué sectores de servicios se 
extenderán estas reformas.  
  WT/TPR/M/204/Add.1 
 Page 127 
 
 
  Answer 
 The Korean government adopted "Regulatory reform"  and "openness" as major strategies of "Service 
PROGRESS."  
Productivity, Regulatory reform, Openness, Global st andard, Rivalry, Environmental improvement, 
Specialization, Scale economy  We will consistently push forward further servi ce market reforming the anti-competitive regulations 
to raise productivity of the service sector. In br oadcasting and communications sector, market access 
barriers, related market entrance, ownership and business, will be reduced gradually.  
 The Korea government is planning to overhaul regula tions to facilitate investment and business start-
ups in the service industry. The government woul d encourage foreign educational institutions to 
establish institutions in Korea by providing va rious supports including th rough allowing remittance 
of those institutions to their countries.   
IV. POLÍTICAS COMERCIALES POR SECTORES 
6) S
ERVICIOS  
ii) Compromisos globales en el marco del AGCS  
 En el párrafo 73 se menciona que según el informe relativo al plan de acción individual de Corea para 
2006, el mayor interés de Corea en la esfera de lo s servicios es la liberalización de los servicios de 
infraestructura, como el transporte marítimo, la c onstrucción, las telecomunicaciones, los servicios de 
distribución y los servicios financieros. México desea ría saber si Corea tiene la intención de reducir o 
eliminar restricciones a la participación extranjera en esos  sectores y en que consistiría la 
liberalización. 
 
Answer 
 There is no restrictions on foreign participatio n in the construction sector. In addition, the 
liberalization of international maritime trans port except coastal transport has progressed well 
compared to that of other countries. However, Korea doesn't have any plans to further liberalize 
those sectors.  Korea’s level of liberalization in the infrastructu re services is relatively high. For example, there is 
no restrictions on foreign participation in construc tion services and most of distribution services. In 
case of maritime transport services, there is no limit to  foreign equity partici pation in international 
transport services excluding cabotage.   With regard to telecommunication services, 49% fo reign equity ceiling applies to facilities based 
services whereas indirect investment by foreigners is allowed up to 100%. Most of limitations in 
financial services have been removed, especially in Mode 3. Further market openings in these 
infrastructure services will be reviewed through c onsultations with relevant agencies and domestic 
stakeholders.       Korea's distribution service market, in large part,  has been open. Additional negotiations are 
underway on each item to further open the market.  
 WT/TPR/M/204/Add.1 
Page 128  
 
  IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
iii) Servicios bancarios y financieros 
b) Marco reglamentario y de supervisión 
En el párrafo 83 se indican los requisitos general es para que una sucursal de un banco extranjero 
pueda establecerse en Corea.  México desearía saber si los requisitos exigidos a los bancos extranjeros 
son similares para los bancos coreanos. 
Answer 
When already-established local banks want to open branches, there is no need of approval from the 
Korea Financial Services Commission  (FSC). Forei gn banks are required to seek approval for each 
branch from the FSC. This is to guarantee the effe ctive supervision of each branch which belongs to 
main offices abroad outside the jurisdic tion of national banking law of Korea. 
However, if the foreign bank establishes local subs idiaries, it can establish branches without approval 
from the FSC, just like the local banks. 
En el párrafo 90 se señala que las sociedades de valo res y actividades conexas, como el corretaje, las 
operaciones y la suscripción de valores, deben obte ner una licencia de la Comisión de Supervisión 
Financiera  (FSC).  Las sucursales u otras oficinas extranjeras deben estar aprobadas por la FSC, según el tipo de actividades. Desearíamos saber cu ales son los requisitos para que las sucursales u 
otras oficinas extranjeras puedan obtener una licencia.  
Answer 
1. Requirements for establishing a securities firm  
  Authorization requirements Relevant provisions 
1. Capital 
requirements  An applicant shall be a stock company under the Commercial Act. 
An applicant shall maintain the necessary amount of cap ital to carry on securities 
businesses: - Brokerage, dealing, and underwriti ng: not less than 50 billion won; 
- Brokerage and dealing: not less than 20 billion won; 
- Brokerage: not less than 3 billion won; - Bond brokerage: not less than 2 billion won; 
- ECN: not less than 15 billion won. Article 28  (1) of the Act 
 Article 32  (1) of the Act 
Article 14 of the Decree 
2. Personnel requirements  An applicant shall have a sufficient number of  experts in order to protect clients 
when carrying on the securities business where the application is filed. 
The officers and employees of an applicant shall not have any reason for 
disqualification prescribed by relevant laws and shall not have any record of being subject to suspension or discontinuation from office issued by supervisory 
authorities, etc. for the last three years. 
The officers of an applicant shall not have any intention to undermine the prudent 
management of the applicant. Article 32  (1) of the Act 
Article 17-2  (1) of the Act 
Appendix 2 of the Regulation 
3. Physical facility Requirements   An applicant shall establish data-processing system, etc. necessary to carry on the 
authorized business in a stable and smooth manner. 
An applicant shall secure business space in cluding offices, etc. necessary to carry 
on the authorized business. 
An applicant shall not have any legal obsta cle when supervisory authorities, etc. 
conduct inspections over major phy sical facilities of the applicant. Article 32  (1) of the Act 
Article 17-2  (1) of the Act 
Appendix 2 of the Regulation 
Table (Cont'd ) WT/TPR/M/204/Add.1 
 Page 129 
 
 
    Authorization requirements Relevant provisions 
4. Adequacy of 
business plan  An applicant shall be able to maintain not  less than 150% of net capital ratio and 
have appropriate and feasible estimates of revenues and expenditures. It is unlikely that the business plan violat es relevant Acts and subordinate statutes 
and undermines sound financial practice. 
The relationship between the board of directors and the management, the composition and operation of the board of directors, and the authority and 
responsibility of an auditor shall be adequate to protect clients and shareholders 
and to maintain the soundness of financial status and operation of the business. An applicant shall establish an appropriate internal control system in order to 
supervise the compliance with relevant  laws, to manage risks and to prevent 
violations committed by the officers and em ployees after taking into account the 
scope and content of the business. Article 32  (1) of the Act 
Article 17-2  (2) of the Act  Appendix 2 of the Regulation 
5. Requirements for 
major contributors <Where a major contributor is a financial institution> 
Securities service shall not be the main business. 
The equity capital shall be not less than four times of the contribution. 
The ratio of the financial prudence shall satisfy the minimum standard. 
The debt ratio of a conglomerate subject to the limitations on cross shareholding 
or its affiliates under obligations shall not exceed 300%. A major contributor shall not make contributions from borrowings. 
A major contribution shall have no record of violating finance-related Acts and 
being imposed with fine or heavier crimi nal punishment for the last five years, and 
shall meet other compliance requirements.  
 
<Where a major contributor is a domestic corporation> The equity capital shall be not less than four times of the contribution. 
The debt ratio shall not exceed 200 %. 
The debt ratio of a conglomerate subject to the limitations on cross shareholding or its affiliates under obligations shall not exceed 300%. A major contributor shall not make contributions from borrowings. 
A major contribution shall have no record of violating finance-related Acts and 
being imposed with fine or heavier crimi nal punishment for the last five years, and 
shall meet other compliance requirements. 
 
<Where a major contributor is a domestic individual> 
A major contributor shall not be disqualified as officer. 
A major contributor shall have no record of violating finance-related Acts and 
being imposed with fine or heavier crimi nal punishment for the last five years, and 
shall meet other compliance requirements.  Article 32  (1) of the Act 
Article 17-2  (4) and 17-2  (5) 
of the Decree Appendix 1 of the Decree 
Appendix 3 of the 
Regulation 
 <Where a major contributor is a foreign corporation> 
A major contributor shall conduct secu rities business in a foreign country. 
The equity capital shall be not less than three times of the contribution. The credit rating shall be above investment grade or the standard on financial 
prudence prescribed by the foreign supervisory agency shall be satisfied. 
With respect to the financial business for th e last three years, a major contributor 
shall not be subject to corporate warni ng or heavier administrative measures, or 
fine or heavier criminal punishment impos ed by supervisory authorities of Korea 
or a foreign country.  A major contributor shall not be the larg est shareholder, etc. of an insolvent 
financial institution.  
 
2. Requirements for establishing br anches of foreign securities firm 
  Authorization requirements Relevant provisions 
1. Capital requirements ◦ An applicant shall be a stock company under the Commercial Act. 
◦ An applicant shall maintain  the necessary amount of ca pital to carry on securities 
business.  
- Brokerage, dealing and underwriting: not less than 15 billion won 
- Brokerage and dealing: not less than 10 billion won - Brokerage: not less than 3 billion won 
- Bond brokerage: not less than 2 billion won 
- ECN: not less than 15 billion won Article 28-2 of the Act 
Article 32  (1) of the Act Article 15-3 of the Decree 
Table (Cont'd)WT/TPR/M/204/Add.1 
Page 130  
 
    Authorization requirements Relevant provisions 
2. Personnel 
requirements  ◦ An applicant shall have a sufficient number of experts in order to protect clients 
when carrying on the securities business where the application is filed. ◦ The officers and employees of an applicant shall not have any reason for 
disqualification prescribed by relevant laws and shall not have any record of being 
subject to suspension or discontinuation from office issued by supervisory authorities, etc. for the last three years. 
◦ The officers of an applicant shall not ha ve any intention to undermine the prudent 
management of the applicant. Article 32  (2) of the Act 
Article 17-3  (1) of the Decree 
Appendix 2 of the Regulation
3. Physical facility 
requirements ◦ An applicant shall establish data-processi ng system, etc. necessary to carry on the 
authorized business in a stable and smooth manner. 
◦ An applicant shall secure business space including offices, etc. necessary to carry 
on the authorized business.  ◦ An applicant shall not have any legal obsta cle when supervisory authorities, etc. 
conduct inspections over major phy sical facilities of the applicant. Article 32  (2) of the Act 
Article 17-3  (1) of the 
Decree 
Appendix 2 of the Regulation
4. Adequacy of business plan ◦An applicant shall be able to maintain not  less than 150% of net capital ratio and 
have appropriate and feasible estimates of revenues and expenditures.  ◦It is unlikely that the business plan violat es relevant Acts and subordinate statutes 
or undermines sound financial practice. 
◦ The relationship between the board of directors and the management, the 
composition and operation of the board of directors, and the authority and 
responsibility of an auditor shall be adequate to protect clients and shareholders 
and to maintain the soundness of financial status and operation of the business. ◦An applicant shall establish an appropriate internal control system in order to 
supervise the compliance with relevant  laws, to manage risks and to prevent 
violations committed by officers and emplo yees after taking into account the scope 
and content of the business. Article 32  (2) of the Act 
Article 17-3  (1) of the Decree 
Appendix 2 of the Regulation
5. Requirements for major contributors ◦ The equity capital shall be not less than three times.  
◦ The credit rating shall be above investment grade or the standard on financial 
prudence prescribed by the foreign supervisory agency shall be satisfied. ◦ With respect to the financial business for the last three years, a major contributor 
shall not be subject to corporate warni ng or heavier administrative measures, or 
fine or heavier criminal punishment imposed  by supervisory authorities of Korea or 
a foreign country.  A major contributor shall not be the larg est shareholder, etc. of an insolvent 
financial institution. Article 32  (2) of the Act 
Article 17-3  (1) and 
Appendix 1 of the Decree Appendix 3 of the regulation
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S ERVICIOS  
iv) Seguros 
c) Reglamentación 
 
En el párrafo 95 se menciona que las sucursales extranjeras deben mantener recursos de 3.000 millones de won por lo menos, para poder hacer  negocios con coreanos y extranjeros. México 
desea saber si ese requisito es el mismo para las compañías de seguros de vida coreanas.   Answer  Domestic life insurers should have more than $30 billi on capital. However, as to life insurers who 
want to have only some part of business lines, re duced capital requirements are applied. Minimum 
capital requirements for each busin ess line in the life insurance sector  are as follows: $20 billion of 
life insurance, $20 billion of pension insurance  ( retirement insurance include d), $10 billion of non-
life insurance, $10 billion of sickness insu rance, $10 billion of care insurance. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
v) Telecomunicaciones  
 
En el párrafo 103 se indica que la inversión extranje ra en este sector está su jeta a una limitación del 
49 por ciento y, con arreglo a la Ley del Co mercio de Telecomunicaciones, la Comisión de 
Comunicaciones de Corea  (KCC) puede prohibir a un  accionista extranjero adquirir una participación  WT/TPR/M/204/Add.1 
 Page 131 
 
 
  mayoritaria en KT.  De todos modos, en la actualid ad el mayor accionista de KT es extranjero, gracias 
a una excepción. Deseamos saber en que casos se hacen excepciones.  
 
Answer 
 
A foreign government or a foreigner may not be the la rgest shareholder of KT. However, it is allowed 
exceptionally when a foreign government or a foreigner holds less than 5% of the total voting shares. 
KT's current major shareholder is forei gners through a grandf athering measure. 
 
En el párrafo 111 se indica que las transmisiones te rrestres de radio y televisión están cerradas a la 
participación de inversiones extranjeras, y la pa rticipación extranjera en otras esferas de la 
radiodifusión está limitada al 49 por ciento. México desea saber si existen empresas extranjeras participando en otras esferas de la radiodifusión.   
Answer 
 
Except for terrestrial radio and television bro adcasting, there are foreign investments in system 
operators  (SO), satellite broadcast ers, and program providers  (PP). 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S
ERVICIOS  
vi) Transporte 
a) Transporte marítimo  
 
El párrafo 116 indica que aunque la navegación de cabotaje sigue estando reservada a los buques 
coreanos, los extranjeros pueden participar en el tr ansporte de mercancías y pasajeros entre Corea del 
Norte y Corea del Sur como socios minoritarios de una empresa conjunta con una compañía coreana.  
México desea conocer si existen requisitos adici onales para ser socios minoritarios y si en las 
compañías que actualmente participan en esta ru ta ya hay socios minoritarios extranjeros. 
 
Answer 
 
In order for foreigners to participate in inter-Ko rean transport of passenger or freight, they have to 
form a partnership with a Korean shipping company.  In such case, the foreigner's investment should 
not exceed more than 50% of the total investment.    Currently, a Chinese shipping company  operates the service between Busan and Najin by forming a 
joint-venture partnership with a Korean shipping company.   
En el párrafo 117 se señala que la mayoría de los serv icios marítimos auxiliares,  como los servicios de 
remolcador, consignación de cargas y servicios de  mantenimiento y repar ación, corren a cargo del 
sector privado. México desea saber si estas disposiciones incluyen al sector privado extranjero.  Answer  Most maritime auxiliary services are provided by the private sector, and there is no discrimination 
against foreigners in their provision of such services in Korea.   
En el párrafo 118 se menciona que para atraer a un mayor número de compañías navieras, el Gobierno 
anunció en 2006 planes para mode rnizar las instalaciones portuarias y agilizar las operaciones.  
México está interesado en conocer la inversión actua l estimada en estos planes,  si han participado 
empresas extranjeras y si tales empresas lo han hecho a través de licitaciones.  WT/TPR/M/204/Add.1 
Page 132  
 
  Answer 
 Total estimated amount of the plans is 21 trillion 9 hundred billion won (10 trillion 9 hundred billion 
won of national finance and 11 trillion won of pr ivate capital), from 2006 to 2011.  Current 
investment in those plans amounted to 9 trillion 5 hundred billion won (6 trillion won of national 
finance and 3 trillion 5 hundred billion won of private capital) in 2008.  
There is no case of foreign participation in nat ional finance projects through bidding but 5 foreign 
companies have invested total amount of $ 1,031 million in private sector projects. 
 En el párrafo 119 se hace referencia a que el Gobi erno recurre cada vez más al sector privado para 
desarrollar la infraestructura portuaria y proporciona servicios de conformidad con varios acuerdos de 
concesión, como los contratos de construcción,  explotación y retrocesión o de construcción, 
retrocesión y explotación. México desea saber si est a política comprende al sector privado extranjero 
y si el trato es igual para el sector privado coreano.  
 
Answer 
 The policy includes the foreign private sector and the t reatment is the same for both Korean nationals 
and foreigners. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES 6) S
ERVICIOS  
vi) Transporte b) Transporte aéreo 
 El párrafo 121 indica que los servicios aéreos in ternacionales se rigen por acuerdos bilaterales de 
servicios aéreos, que negocia principalmente el Mi nisterio de Ordenación Territorial, Transporte y 
Asuntos Marítimos.  Corea ha firma do acuerdos bilaterales de servicios aéreos con 87 países, incluso 
un acuerdo de "cielos abiertos" con los Estados Un idos.  Además, tiene el propósito de negociar 
nuevos acuerdos, al tiempo que liberalizar progresivame nte los acuerdos bilaterales en vigor. México 
desearía saber con que países Corea tiene el pr opósito de negociar nuevos acuerdos y en que 
consistiría la liberalización progresiva de  los acuerdos bilaterales en vigor.  
 
Answer 
 (Negotiation Plans) 
Korea plans to hold air services negotiations with countries, including China and Canada, in the 
second half of 2008 for increasing capacity entitleme nts or achieving air services liberalization and 
amending bilateral air services agreements to that effect .  In addition, Korea has plans to arrange air 
services negotiations with Kazakhst an, Belarus, Turkmenistan and other CIS countries as well as 
Central and South American countries such as Brazil, Venezuela, and Peru.  
(Liberalization of existing bilateral agreements) 
Korea has already liberalized cargo services with 28 countri es and passenger services with 
16 countries allowing the designated airlines of th e respective countries to operate services without 
any restrictions on destination points  and frequencies.  Korea's libera lization with other countries are 
basically for 3rd and 4th freedom tr affic rights but in some cases, such as with the US and Chile, the 
agreements include full libera lization of 3rd, 4th and 5th freedom traffic rights. 
  WT/TPR/M/204/Add.1 
 Page 133 
 
 
  IV. POLÍTICAS COMERCIALES, POR SECTORES 
6) S ERVICIOS  
vii) Servicios de distribución  
 
En el párrafo 131 se señala que la participación ex tranjera se excluye del comercio de productos 
farmacéuticos, artículos médicos y productos funciona les;  armas de fuego, explosivos y espadas;  
obras de arte y antigüedades;  y el funcionamien to de los mercados públicos al por mayor de 
productos agrícolas, pesqueros y ganaderos y los servicios de distribución en esos mercados.  
Además, los servicios al por mayor y al por menor  relacionados con los automóviles de segunda mano 
y los combustibles gaseosos están sujetos a una pr ueba de necesidades económicas. Al respecto, 
México desea saber si Corea tiene previsto liberalizar  el funcionamiento de los mercados públicos al 
por mayor de productos agrícolas, pesqueros y ganaderos y los servicios de distribución de esos mercados.  
Answer 
 
Under the Article II of the Act on Distribution an d Price Stabilization of Agricultural and Fishery 
Products, wholesale markets for agricultural, fis hery, and livestock products are categorized into 
public wholesale market or private wholesale market .  Private wholesale market can be opened with 
the permission of provincial governors or city ma yors. There is no special restrictions imposed on 
foreigners.  
 
MEXICO – SECOND SET
 
 Indicaciones geográficas 
 Question 
 1. ¿Quién es el titular de una indicación geográfica coreana?   
Answer 
 
Any legal entity which is jointly founded by persons who conduct business activities such as 
producing, manufacturing, processing, certifying or selling goods, or providing services and which 
comprises only those persons engaging in the bus iness of producing, manufacturing or processing 
goods for which a geographical indication can be used may register a geographical indication.  
 
Question  
2. ¿Cuales son las indicaciones geográficas coreanas protegidas y para que productos se aplican?  
 
Answer 
 
Agricultural and fishery products with geographical c haracteristics and their processed products are 
the protected GIs in Korea. Examples are as follows:  Bo Seong Nok Cha for green tea, Jin Do Hong J oo  for liquor, Jang Heung Pyo Go Bu Sut  for 
mushroom, Go Heung Yoo Ja  for citron, Yi Chun Han Woo for beef, Yang Yang Song Yi for 
mushroom, Soon Chang Go Choo Jang  for red pepp er paste, Han San Mo Si for ramie fabric, Go 
Chang Bok Boon Ja Joo for liquor, Kyu ng San Dae Cho for jujube, Yi Chun Do Ja Gi for porcelain,  
Suh San Ma Neul for garlic, Jung Ahn Bahm  for nuts, Nam Won Mok Gi for wooden tableware, Sang Joo Got Gahm for dry persimmon, Gang Jin Chung Ja for porcelain, Ham Ahn Soo Bak for water 
melon. WT/TPR/M/204/Add.1 
Page 134  
 
  Question 
 3. ¿Existe un registro de indicaciones geográficas extranjeras aplicable a cualquier producto?  
 
Answer 
 
There is no separate regulation for foreign GIs. Tho se who wish to register for foreign GIs have to 
follow the same procedures of application, exa mination and registration as Korean nationals do. 
Registration of foreign GIs applies to all produc ts with geographical characteristics and their 
processed products. 
 
Question  4. Si existiera interés de registrar una indi cación geográfica extranjera en Corea, ¿ante qué 
autoridad se tendría que hacer el trámite y cuál es el procedimiento?  
 
Answer 
 
The body of cooperate which owns the foreign GI sh all file the application through KIPO or Ministry 
of Food, Agriculture, Forestry & Fisheries.  
The Trademark Act provides for geographical indicati on protection as collective marks. An applicant 
may file an application under the Trademark Act to  the Korean Intellectual Property Office with 
documents required by the relevant provis ions of the law, decree and ordinance.  
 To register a collective mark as a geographical in dication under the Trademark Act, the applicant 
must submit an application with the following: (1) a sample of the mark to be used as a geographical 
indication, (2) an abstract of the ar ticles of incorporation of the legal  entity, (3) documents that show 
a given quality, reputation or other characteris tics of goods; proof that the quality, reputation or 
other characteristics of the goods are essentially  attributable to the characteristics of the 
geographical environment; the specific region ref erred to in the geographical indication and the 
appropriateness of the range; confirmation that th e legal entity comprises persons who are engaged 
in producing, manufacturing or processing goods to which a geogr aphical indication is applicable; 
confirmation that the legal entity consulted with the relevant loca l government entity regarding the 
application; and proof that the geographical indicati on is protected in the foreign country of origin. 
 As prescribed in the Enforcemen t Decree of The Agricultural Products Quality Control Act and 
Quality Control of Fishery Products Act, registr ation for geographic indication requires fulfillment of 
several-steps. Usually, it takes about 8 months to 1 yea r from submission of registration documents to 
completed registration. The Act spec ifies detailed procedure as follows.  
  - Apply for registration at the Nationa l Agriculture Products Quality Management 
Service(agricultural and livestock produc ts), National Fishery Product Inspection 
Service(fishery products) and Korea  Forest Service(forestry).  
  - Request the Geographic Indication Registration Deliberation Council to conduct 
deliberation within 15 days after receiving application.  
 
 - Make public notice of geographic indication registration, if there are no reasons to 
reject registration after deliberation.  
  WT/TPR/M/204/Add.1 
 Page 135 
 
 
  Question 
 De manera general ¿cómo funciona  el Centro Especial de Observa ncia de Derechos de Propiedad 
Intelectual en Corea?  
 
Answer 
 Its main functions are to improve control system and laws, to build public-private partnership for 
protecting IPR related companies, to prohibit illegal manufacturing and distributing for sound 
distribution order, and to develop diverse publicity activities  
 
Importaciones paralelas 
 
Question  
6. ¿En Corea las importaciones paralelas están prohibidas para todas las figuras es decir, marcas, 
patentes  y derechos de autor?  
 
Answer 
 
In principle, parallel import is not allowed. 
 
Variedades vegetales 
 
Question  
 7. ¿En qué casos aplica la patente en plantas?. Es decir, en qué casos se aplican "invenciones" 
bajo la Ley de Patentes, y cuándo el "derecho de  obtentor" conforme la Ley de Semillas. Esto 
para aplicar equivalencias y posibles reciprocidades, si fuera el caso.  
 
Answer 
 
After Article 31 of the Patent Act was deleted by  the amendment on October 1, 2006, plant varieties 
became patentable regardless of whether they a re sexually or asexually reproducible.  
 Any new plant variety may be granted patent if it satisfies the patentability requirements under the 
Patent Act. 
 
Protección a los derechos de propiedad 
 
Question  
 
8. Podría proporcionarnos más de talles sobre la naturaleza del Tribunal de Propiedad Intelectual, 
(¿es un organismo autónomo o si depende del pode r judicial?, cuáles son sus competencias)  
 
Answer 
 
The Intellectual Property Tribunal is an organi zation established under the Korean Intellectual 
Property Office, and therefore belongs to the adm inistrative branch of the Korean government.  
 The Intellectual Property Tribunal is in charge of  administrative trials on patents, utility models, 
industrial designs and trademarks and research es related to appeal examinations.  
 WT/TPR/M/204/Add.1 
Page 136  
 
  Administrative trials at the Intellectual Propert y Tribunal cover disputes on the creation, change and 
extinguishment of industrial property rights, and the scope of industrial property rights.  An administrative trial is performe d by a body of three or five admin istrative judges. Decisions from 
administrative trials can be appealed to the Patent Court of Korea.  
 Question 
 
9. Las autoridades que pueden aplicar multas ¿pueden actuar de oficio?  
 Answer  The Korean Intellectual Property does not have the authority to impose fine.  
 
Question 
 
10. ¿En qué consiste el "sistema de telara ña" implementado en la detección de productos 
infractores de derechos de propiedad intelectual?  
 
Answer  
[Spider Web System]  
 Background    - The customs needed to develop a scientif ic and systematic system to prevent the 
inflow of high-risk cargoes in order to guarantee trade security while providing 
speedy clearance for customer satisfaction and trade facilitation.  
 - KCS developed a system to screen out high-risk cargoes by adopting up-to-date 
information analysis techniques including data mining to enhance efficiency in 
enforcement activities and utilization of human resources. 
 
Development Process  
  - KCS developed a model for calculating the degree of risk of individual cargoes by 
adopting a data mining technique and connect ed the model with Visual Link(CDW).  
 
Data mining 
 Sample : Extraction of a proper amount of data Collect data suitable for analyzing high-risk car go selection models .se the number of detected 
smuggling attempts (Event, 1,485) and that of norma l import declarations (Non-Event, 13,320) in the 
proportion of 1 to 9  
 
Explore : Broad understanding through data exploration  
Countries with the record of exporting origin-viola ting products have higher possibility of exporting 
counterfeits and the products brought into the cu stoms inspection place show higher probability of 
being counterfeits than those carried into other bonded areas.  
  WT/TPR/M/204/Add.1 
 Page 137 
 
 
  Modify : Conversion of crime factors into data and theirverification  
 Select significant crime factors shown in the hypotheses as final variables through verification of correlation   
Model : Development of models  
Complete development of 5 models, using L ogistics Regression technique for analysis  
 Assess : Selection of a final model ba sed on predictability, usability, etc. 
 
 
How to catch counterfeits among 10 mil. im/export entries a year?
Looking for 
Gem[Variable]
Data Mining
A technique of formulating relations and patterns among dataNew R/M
technique search
Data Sampling
15,000 entries
- Fake  :   1,500
- Legal : 13,500Derivation of 41 
- Importer/Supplier
- Port of loading
- Storage placeModelling
Counterfeit
Risk assessmentModel
DevelopmentValidity test
- Selection of 9 variables
- Port of loading
- Payment condition, etc.
 
 
Visual Link   Outline  
 - Visual Link is a data analysis technique  that can figure out the correlation between 
high-risk importers and suppliers and the fl ow of products and foreign exchange by 
visually illustrating their relations.  
 Analysis of correlation on high-risk import declarations  
 - Analyze correlation between importe rs and suppliers of high-risk import 
declarations(about 100 cases per month) selected by the data mining model.  
 - sort out cases to be subject to a special investigation based on the correlation analysis 
of importers and supplie rs involved in high-risk import declarations.  
 Analysis of Smuggling Pedigree  
 - Draw up a smuggling pedigree based on the correlation analysis of importers, 
overseas suppliers and domestic relevant  parties punished for importation of 
counterfeits.  
 - By investigating relevant importers, supp liers, sellers and distributors simultaneously, 
the customs rounds up organized smugglers of counterfeits.  
 WT/TPR/M/204/Add.1 
Page 138  
 
  Smuggler organization keeps smuggling counterfeits in spite of being charged 
with fake goods intercepted at the clearance stage
Document in 
trash can
Link Analysis
Support system helping understand the analysis output by 
drawing pictures of correlations among informationMulti-dimensional analysis 
technique development
Importers-Suppliers Importers-Suppliers-Warehouse
 
 
System Building  
 
System Overview  - Spider-Web System consists of Data Mining technique to select high-risk import declarations 
by finding patterns from existing seizure records and Link Analysis to single out cases to be 
investigated based on the correlation analys is of the selected import declarations.  
 
Overview of Spider-Web System  
Spider-Web System
Smuggler Organization
investigationSelection of 
individual risky cargo
(Cargo surveillance)Correlation 
AnalysisRisk
GradingPattern
Analysis
Derivation of Risk 
Assessment formula
Data Mining 
SEMMA 
TechniqueSelection of Risky
importer/supplier(Personnel surveillance)
Link Analysis
Technique
Risk cargo
examination
 
 
Question 
 
11. En caso de que tras la solicitud de suspensi ón de despacho de las mercancías sospechosas de 
falsificación, el titular del de recho no inicie ninguna acción le gal en contra del importador, 
¿quién cubre los daños y perjuicio ocasionados al importador por la suspensión del despacho 
(tales como pagos de almacenaje, transporte, seguros, etc.)?  
  WT/TPR/M/204/Add.1 
 Page 139 
 
 
  Answer 
 
Importers might be compensated for the damages done  by calling a civil case against the right holder. 
 
Question 
 
12. ¿A qué se refieren o quién hace el depósito de una garantía del 120%  del valor imponible de 
las mercancías y cuál es el procedimiento en esos casos?  
 
Answer 
 
It is called "a security."(Customs Act Article 235)  Any person who desires to have a trademark right 
protected, may offer a security of 120% of the taxabl e value of the merchandise to the collector of the 
customs, and request him to withhold the customs cl earance of the goods. It is used for recompense 
for the damage done according to court's decision.  
 
Question  13. El proporcionar a los consum idores una página para poder iden tificar con mayor facilidad los 
productos auténticos de los falsif icados, ¿no se convierte en una herramienta para los piratas o 
falsificadores puedan mejorar sus productos o aprender los medios implementados por los 
titulares de los derechos para la protección de sus derechos?  
 
Answer 
 
Providing the consumers with the authentic products online, they can be misused by the pirate. As 
most of the infringing works in Korea are made a nd circulated online, Korean government has been 
strengthening its efforts to enforce the related act.  
Patentes 
 
Question 
 
14. Podría explicarse ¿en qué circ unstancias y qué requisitos deben reunirse para que la vigencia 
de una patentes puede ser prorrogada?  
 
Answer 
 
The patent right holder has not worked the patented invention during a term to prepare the data for 
the safety test result, or others for the requirements of other la ws to commercialize the patented 
invention, usually in the case of pharmaceutical  chemicals or agricultural chemicals.  
 
Question 
 
Existe alguna vinculación para el tema de patentes y medicamentos entre la Oficina Coreana de 
Propiedad intelectual y el Ministerio de Salud?   
Answer 
 
Currently, there is no link between KIPO and the Mini stry for Health, Welfare and Family Affairs.  
 However, Korea will introduce th e patent linkage system as a result of the KORUS FTA, and is now 
revising relevant laws and regulations accordingly.  WT/TPR/M/204/Add.1 
Page 140  
 
  Derechos de autor 
 
Question  16. ¿Podría proporcionarnos mayor información acerca  de los derechos de transmisión digital de 
sonidos?. Por ejemplo, nos gustaría saber cómo se lleva a cabo esta protección, qué tipos de 
obras protege y si prevé también la protección de los derechos conexos.  
 
Answer 
 
Digital audio transmission indicates that Comme rcial phonograms are trans mitted as digital data 
from the web sites that features streaming media. As the payment for the digital audio transmission is 
paid for the remuneration, the trans mitter's responsibility is termi nated, being paid a portion of 
money after use. The right of performer and pho nogram producer is protec ted by being paid the 
remuneration which is charged after use of their right. 
 
Marcas 
 
Question  17. ¿En qué consiste o cómo funciona el sist ema informatizado de marcas de fábrica o de 
comercio?  
 
Answer 
 
General principles of trademark under the Tradema rk Act apply to the information technology and 
there is no separate trademark system for information technology. 
 TURKEY
 
 
WT/TPR/S/204  II. TRADE POLICY REGIME  (7) F
OREIGN INVESTMENT REGIME  
 
Question  
It is mentioned in the Secretariat Report that Ko rea’s share of global inward FDI  (Foreign Direct 
Investment) has been declining steadily since 2004.   We understand, that the decline trend of inward FDI flow has happened despite some measures had 
been taken to help to improve the business environment in the country.    
What kind of reasons are Korean authorities thinki ng, as the reason for the low level and decline of 
inward FDI in recent years?  What kind of policy measures are planned to address that problem?   Answer  The Korean government recognizes that  the decrease in foreign direct in vestment is the result of fewer 
mergers and acquisitions, high oil pr ices, and slower economic growth.  
  WT/TPR/M/204/Add.1 
 Page 141 
 
 
  This view is shared by UNCTAD, as expressed in  its ‘World Investment Report 2008’ published in 
September this year.  Korea will enhance its efforts to improve the invest ment environment, both in terms of business and 
living conditions for foreigners. 
 
WT/TPR/S/204  
III. TRADE  POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures  (Para. 16) 
 
Question 
 Para 16 mentions that  more rigorous customs in spections on some agricultural products such as 
peppers, garlic, onions, carrots, ha ve  been applied since 2005 against increased imports due to 
undervalued import declarations.    a. Could Korean Delegation explain what specific  inspections are carried out at 
customs in the imports of the mentioned products? 
 
 b. Have these inspections bro ught about  intended results ?  
 
Answer to a 
 Followings are to be carried out at customs. 
 - reinforced X-ray search 
 - pre-inspection and content inspection on concerned products   - reinforced information analysis and investigation   Answer to b  
Evaluation is currently in progress.  
WT/TPR/S/204  
III. TRADE  POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs 
 
Question  We understand that the tariffs are importa nt trade policy measures for Korea.   
 
On the basis of the Secretariat Report it is noted that  there are plenty of tariff measures with different  
rationales  and policy objectives as well as multiplicity of levels.  According to the Secretariat Report, the 2008  customs tariff remains relatively complex. 
 
Could Delegation of Korea give explanation if ther e is a  plan to simplify customs tariff  regime 
which seems too complex  and  unpredictable at pr esent due to wide range of tariff  measures?  
 WT/TPR/M/204/Add.1 
Page 142  
 
  Answer 
 Please refer to the answer to Switzerland’s question  (tariffs) and New Zealand’s question 3 (tariffs). 
WT/TPR/S/204 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS (PARA. 36-37) 
 
Question  
So called  "flexible tariffs" which enable Korea to apply higher MFN duties on a temporary basis   
seem to be in line with Korea’s tariff commitmen ts as WTO bindings are respected in any case.  
 However, Secretariat report mentions that the syst em allows  Korean authorities  to increase or 
decrease  certain tariffs up to 40%above or below a fixed tariff rate   which in turn may have 
implications on the imports. 
 We would like to learn  if and  at what stage,   importers are informed about the level of tariff they will have to pay.   
Answer 
 
The coverage and tariff rates of flexible tariffs are defined in Presiden tial decrees and the decree is 
made public to the media one month before the decree takes into effect. Therefore, importers can learn the level of tariff they will have to pay.  
 WT/TPR/S/204 
 
III. TRADE  POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS (PARA 55) 
 
Question 
 
It is stated in the Secretariat Report that divergent and complex rules of origin  add to the trading costs 
and complicates the trade facilitation process.  It is further noted that the expanding network of preferential arrangements makes customs clearance 
more complicated. 
 Could the Korean authorities  elaborate on how they  are dealing with difficulties divergent rules of 
origin creating at customs?  What kind steps are being taken to facilitate trade in that regard?  
 
Answer 
 
Please refer to the answer to Australia’s question 9. 
 
WT/TPR/S/204   WT/TPR/M/204/Add.1 
 Page 143 
 
 
  III. TRADE  POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS (Para  58, 59) 
(iv) Tariff quotas 
 
Question 
 
Secretariat Report notes that  there is a large unfille d share of tariff quotas  on some items even with 
relatively low in-quota tariffs  and  that suggests that their administration  and allocation may  be 
restricting imports.  
It is further noted that   state trading enterprises  most of which, according to the Report are engaged 
directly in marketing imports  and allocating quot as impose additional mark-ups  on top of the in-
quota tariff  on some items such as rice, garlic, onions, pine nuts etc.   Please indicate the role of   state  trading enterprises  in quota allocations?   
On what basis do state trading enterprises make mark -ups in –quota tariff leve ls? Could Delegation of 
Korea assure us that this activities of stat e trading enterprises  do not impede imports? 
 
Answer 
 In terms of quota allocation, state trading enterp rise has exclusive right over the whole TRQ volume 
for certain products.  
 Mark-up is imposed on the products in Note 4 and Note 5 of UR Country Schedule.  
The average TRQ fill rate of state trading produc ts are as high as 84 %. Contrary to general 
perception, state trading enterprise has hi gher import fill rate than the average.  
 
 WT/TPR/S/204  
III. TRADE  POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ix) Standards and other technical requirements (Para. 86)  
Question  According to the Secretariat Report there are  a few  "Korea specific" standards  and that the 
opportunity for interested parties are given  in the development or review process of these standards. 
 Please indicate how interested parties are informed in the development of "Korea-specific" standards. 
Is there  a list of products where only "Korea-specific"  standards are considered?   
Answer 
 
The development procedures of "Korea-specific" standar ds are identical to those of other national 
standards. KATS accepted the Code of Good Practice for the Preparation, Adoption and Application 
of Standards. To ensure transparency and impartia lity of the standard development process, we 
publish a notice in Official Gazette, "Gwanbo", at an  early appropriate stage and at the website of 
KATS in accordance with the relevant provisions of the Industrial Standardization Act. More than 60 
days are allowed for interested parties to  make comments on the proposed standards. 
 "Korea-Specific" standards on applicable products c an be found on the websit e of Korean Standards 
information Center, www.standard.go.kr. WT/TPR/M/204/Add.1 
Page 144  
 
  WT/TPR/S/204 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iv) State-owned enterprises and privatization (Para. 156) 
 
Question  The Secretariat Report states that state  i nvolvement persist in the Korean economy. 
 
Could Delegation of Korea explain if there is a pr ojection to continue to privatization program?  
 
Answer 
 We are working on the plans for rest ructuring of state-owned agenci es to vitalize the domestic market 
and raising overall efficiency in the public sector. We will implement restructions of several agencies 
as we take into account circumstances of each agency.  
 
WT/TPR/G/204  
III. TRADE POLICY DEVELOPMENTS 
(1) K
OREA AND THE WTO 
(a) Implementation of WTO Commitments   
 
Question  
Para 32  reads that " A total of 90.8% of all tariff lines   are bound and the simple average  bound 
tariff  rate fell slightly  from 17.2% in 2004 to 17% in 2007. A further decrease should take place in 
2009 when all  Uruguay Round  commitments are to be fully implemented."  Could Delegation of Korea kindly explain  which UR co mmitments are referred to in that paragraph?  
 Answer  The Commitment is reagrding the lowering of b ound rates which Korea promised in the UR 
negotiations. 
 WT/TPR/S/204 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(viii) Contingency measures (Para. 73) 
 Question 
 It is indicated in the Secretariat Report, that the calculation method  of the dumping margin was 
changed.  
Could the government of Korea  give more info rmation  on the new method of dumping margin 
calculation?    WT/TPR/M/204/Add.1 
 Page 145 
 
 
  Answer  
 Please refer to the answer to China 2nd set’s question 2.  
WT/TPR/S/204  
IV. TRADE POLICIES BY SECTOR 
(6) S
ERVICES  
(v) Telecommunications (Para. 103) 
 Question 
 It is noted that in the Secretariat Report that the foreign investment in the telecommunications  sector 
is subject to a 49% ceiling.  
We would like to learn whether there is a timetable  for removing the foreign equity   limitation in 
basic  telecommunication services.  
Answer 
 Korean telecommunication market including KT  (J une 2002) is completely privatized and the 
government does not possess any shares of telecommunication operators. 
 Since April 2001, the foreign equity ceiling of ba sic telecommunication operators has been raised 
from 33% to 49%. Since the level of market opening  is relatively high compared with that of other 
major countries, there is no plan for further opening.  
 
ARGENTINA
 
 WT/TPR/S/204, INFORME DE LA SECRETARÍA 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
ii) Valoración en aduana  b) Normas de origen  
 
Párrafo 25, página 50 
 
En este párrafo, el informe menciona que Corea ha  puesto en marcha un "proceso de normalización de 
nombres de los artículos", en materia de valo ración en aduana para determinados productos 
importados. ¿Podría Corea brindar más detalles sobre en  qué consiste este proceso y de qué manera se 
implementa?   Answer  Agricultural and fisheries products which have a high price differential according to size and 
components are selected and detailed contents on si ze, components, colours, status, usage are 
investigated, and then standard item names are estab lished by the investigated detailed contents. 
 WT/TPR/M/204/Add.1 
Page 146  
 
  iii) Aranceles 
c) Aranceles flexibles Derechos de ajustes 
 
Párrafo 38, página 55 
 
En este párrafo, el informe indica que Corea aplica "der echos de ajuste", con el  objetivo de proteger a 
las ramas de producción nacionales de los aumentos súbitos de las importaciones y atenuar el impacto 
de la liberalización del comercio, y que estos son apli cados por el Ministerio de Hacienda anualmente, 
pudiéndose ajustar por Decreto Presidencial. ¿Podría Corea explicar cuáles son las bases sobre las 
cuales se aplican estos derechos?  
 
Answer 
 Please refer to the answer to Switzerland’s question (Flexible tariffs). 
 
(iv) Contingentes arancelarios 
 
Párrafo 60, página 62  En este párrafo, el informe menciona que Corea emplea diversos mecanismos para la asignación de 
los contingentes y su administración, según los productos;  como la subasta, la asignación a un 
organismo designado, la distribución sobre la base  de la demanda real o combinaciones de estos 
métodos. ¿Podría Corea brindar más detalles sobre dichos métodos de asignación y sobre cuáles son 
los productos comprendidos?   Answer  The followings are Korea's TRQ admin istration methods by items .  
 - State trading (allocation by designated agencies): rice, garlic, red pepper, mung 
bean/red bean etc  
 - Auctioning: powder milk, condensed milk, chestnut etc.  
 - Allocation on real demand : bird's eggs, powder of bones, fruit trees, seed potatoes, 
milch cows, swine, etc.  
 - Combination: soybean, ginger, sesame, onion etc.   Please refer to the relevant WTO document  (G/AG/N/KOR 1). 
 
CANADA
 
 
Report by the Government of Korea  (WT/TPR/G/204)  
 Part II. Economic Developments: 2004-2008; paragraph 19, page 9 
 
Question  The Government Report notes that deregulation re mains at the top of the Korean government’s 
agenda. In 2008, the Presidential Council on Na tional Competitiveness  (PCNC) was launched. Its 
main objective is to create a business-friendly e nvironment by eliminating unnecessary obstacles that 
hinder investment.    a) Could Korea please elaborate on the functions of the PCNC?   WT/TPR/M/204/Add.1 
 Page 147 
 
 
   b) Is the PCNC an advisory body only, or w ill it be integrated into the Korean regulatory 
policymaking apparatus?   
 c) What is the relationship between the PC NC and the Regulatory Reform Task Force  
(RRTF) and the Regulatory Reform Committee  (RRC)? 
 Answer to a)  The objective of PCNC is to assist the President  on establishing policies for enhancing national 
competitiveness and undertake polic ies involved several central government agencies efficiently  
 
Main function of PNCN is to advises to the President on the following: 
  - collecting opinions on policies for e nhancing national competitiveness and reflecting 
them in policies 
 - national undertakings for enhancing national competitiveness  
 - regulatory reform and management  innovation in public sector 
 - strategic investment promotion and revitalization of provincial economies  - major national policies that the President requests, etc. 
 Answer to b)  
It is an advisory body. It plays a substantial role in the regulatory reform process by selecting main 
policies for regulatory reform which have a signifi cant impact on public life, and reviewing their 
progress.   Answer to c) 
 
In 1998, the regulatory reform system was unifie d into the RRC, and each central government 
agencies establish regulatory reform bodies.   Besides this, RRTF comprised of representatives from public and pr ivate sectors was established in 
August 2004 in order to reform bundled regulatio ns involved with several ministries. This RRTF 
provided comprehensive reform proposal on total of 68 tasks until December 2007.  
 In the early 2008, RRTF was abolished and regulatory ref orm is continously undertaken by the RRC.  
 - The President reviews the progress of regulatory reforms of bundled regulations and 
those which have a significant impact on general public through the PCNC.  
 
Report by the Secretariat (WT/TPR/S/204) 
 Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (5) T
RADE LAWS 
AND REGULATIONS : paragraph 16, page 20 
 Question 
 The Secretariat Report notes that the authorities pl an, inter alia, to re-examine and reorganize 
40 percent of the existing regulations, to upgrade th e regulatory system, and to transform regulations 
with the largest impact on society and the economy.  
 
 a) Could Korea provide additional inform ation on these regulatory review processes? 
 b) On what basis was the 40 percent ta rget established for the re-examination and 
reorganization of the existing regulations?  
 c) How will the regulatory system be upgraded? WT/TPR/M/204/Add.1 
Page 148  
 
   d) Has the government established parame ters and measures for determining which 
regulations have the largest impact on society and the economy?  What are these parameters and measures? 
 
Answer to a) 
 
(Process of selecting regulations)  Major regulations are selected based on registered  regulations through the recommendations from 
the economic associations, reports by each mini stries, and meetings with stakeholders, etc.  
 
Answer to b)  Among the registered 5,000 regulations registered in 2007, 2,000 regulations were selected as 
immediate reforms are needed through the recomm endations from the economic associations and 
meetings with the relevant ministries.  
 Answer to c)  Since the early 2008, regulatory reform has been set as a top policy agenda and all areas are reviewed without any exceptions.  
 
 - The progress of regulatory reforms has been  speeded up since the President reviews 
their progress through the PCNC.  
 The weight of regulatory reform has also been shifted from quantity-oriented to quality-oriented. Such 
regulations which have less reasons of presence compared with international standards are 
eliminated and those regulations which are necessa ry are upgraded in order to reduce the burden of 
the general public.   Answer to d)  
Major criteria for regulations which have a signific ant impact on general public are as follows:  
  - regulations with annual cost of impact is over KRW 10 billion, regulations by which 
more than 10 million people annually are affected, anti-competitive regulations, 
overly burdensome or unreasonable regula tions compared with international 
standards, regulations with different opinions from relevant Ministries or 
stakeholders, regulations which the RRC acknowledges the necessity of review since they have significant social and economic spillover effects.  
 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (6) T
RADE 
AGREEMENTS AND ARRANGEMENTS ;  (i) Korea and the WTO; paragraph 20, page 23 
 
Question  The Secretariat reported that Korea regards trad e with North Korea as in tra-Korean commerce and 
that such trade is exempt from tariffs. 
 a) What mechanisms are in place to m onitor and measure intra-Korean trade?  
 b) For goods jointly produced in North an d South Korea, does Korea maintain separate 
export data  (including the destination c ountry), if these goods are ultimately exported 
from South Korea?  
 c) Could Korea provide trade data on such intra-Korean trade on a tariff line basis?    WT/TPR/M/204/Add.1 
 Page 149 
 
 
   d) Are such data available for exporte d goods produced in the Gaeseong Industrial 
Complex  (GIC)? 
 e) How are GIC-produced goods r ecorded in Korean statistics? 
 
Answer to a) 
 
The Ministry of Unification accepts notificatio n from importers and exporters with regard to 
contacting North Korean people and they are proc essed according to the Foreign Trade Act. 
 However, some products are designated as products for which approval is needed, and for entry and 
exit of these designated products approval of the Minister of Unification is required. 
 The designated products for which approval is needed  are those which are rest ricted in the relevant 
laws such as Foreign Trade Act, published boo ks, pictures and paintings of North Korea, and 
computers as products for exit. 
 
Answer to b)  Goods jointly produced in North and South Korea are not maintained with separate export data.  Answer to c), d) 
 
Trade data on intra-Korean trade including tho se for exported goods produced in the Gaeseong 
Industrial Complex are available on the hom epage of the Ministry of Unification  
(www.unikorea.go.kr/eng)   
Answer to e) 
 GIC-produced goods are dealt with entry report and are not maintained with separate export data. 
 
Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (7) 
FOREIGN 
INVESTMENT REGIME : paragraph 49, page 32 
 
Question  Paragraph 49 states that: "The Foreign Investment  Promotion Act  (FIPA) permits all FDI types, 
which include: establishment of new businesses, purchase of shares in existing businesses, mergers 
and acquisitions, with at least 10% foreign ownership; and loans of five years or longer from foreign 
parent or affiliated companies. Korea abides by OECD Codes of Liberalization of Capital Movements and of Current Invisible Operations, and the National Treatment Instrument."    a) Could Korea provide information on the proposed amendments to the FIPA, which 
will provide criteria for limiting foreign inv estments that may have a negative impact 
on national security?  
 b) Has this amendment taken effect?  c) Do foreign firms have recourse to app eal the decision should their investments be 
denied based on national security reasons?  
 d) What steps have been taken to ensure transparency of the process? 
 
Answer to a 
 The criteria for limiting foreign investments that ma y have a negative impact on  national security are 
stipulated in Article 5.1.2 of the Enforcement Or dinance of the Foreign Investment Promotion Act  WT/TPR/M/204/Add.1 
Page 150  
 
  (FIPA). The foreign investments may be restricted in  case that they are related to defence products 
and technologies, national security-related contra cts, international security concerns, etc. 
 Answer to b  
The amendment was publicly announced on February 22, 2008 and in accordance with the related 
provision, it took effect three months after the date of the public announcement on May 23, 2008.  
 Answer to c  
Unlike the Exon-Florio provision of the United States, the Korean legal system does not exclude 
judicial judgments when conducting a review to satis fy national security concerns. Therefore, it is 
possible to appeal the decision in administrative court if an investment is denied based on national 
security reasons.  
 
Also, in this case, the procedu res for conflict resolution under the international conventions apply; 
therefore, the party concerned can appeal the deci sion based on the application of such procedures 
and receive compensation.   Answer to d  
Korea provides specific criteria that determine wh ich foreign investments are subject to a review for 
restriction.  Prior or making an investment, a foreign investor c an request the appropriate Minister to review such 
investment to determine if it might face rest rictions for reasons of national security. 
 
If such Minister requests a review from the Fo reign Investment Committee  (based on the four 
principles for a review) within 30 days of the inv estment notification, the Committee must decide 
whether the investment poses a risk to national security within 90 days of such request.  
 Under a clearly stated provision, when the Co mmittee conducts a deliberation of a foreign investment 
based on national security reasons, the Committee must  immediately notify its decision to the foreign 
investor as well as the public.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (1) I
NTRODUCTION : 
paragraph 6, page 39 
 
Question  Paragraph 6 states: "A range of measures involving  grants, tax concessions and low-interest loans 
continue to support production and tr ade in a range of agricultural, forestry, fishing, and manufactured 
products although tax incentives were to terminate automatically at the end of 2003 in accordance 
with sunset clauses."  
 Does Korea plan to reduce and eliminate these market distorting practices?  
 
Answer 
 
The Korean government inserts the sunset clau se in the tax exemption and reduction polices: 
  (i) To prevent the case that tax exemption and reduction policies tend to be abused and 
be irreversible in favor of interest groups.  WT/TPR/M/204/Add.1 
 Page 151 
 
 
   (ii) To eliminate and abolish unnecessary tax exemption and reduction policies after 
periodically analyzing the effectiveness of the policies 
 (iii) And to carry out tax exemption and reduc tion polices flexibly in line with the ever 
changing economic landscape. 
 
However, there are seve ral cases where the Korean government thinks tax exemption and reduction 
policies should not expire and be preserved, though amended.   (i) The government thinks that tax exempti on and reduction policies aren’t’t able to meet 
policy objectives after the sunset clause exp ires and, therefore, extra measures are 
necessary. 
 (ii) The government thinks that, under the international as well as OECD standards, tax 
exemption and reduction polices are necessary  to support R&D, capital investment 
and restructuring which will enhance our econom y’s growth potential and to provide 
social care for low-income families. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iii) Tariffs;  (a) Applied MF N Rate; paragraph 31, page 46  
  
Question  
The Secretariat reports that there remains scope for Korea to rationalize its tariff.  
Does Korea have plans to undertake any tariff simplif ication exercises, or is  such work currently 
underway?  If so, please provide details.  
Answer 
 
Please refer to the answer to Switzerland’s question  (tariffs) and New Zealand’s question 3 (tariffs). 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iii) Tariffs;  (c) "Flexible" tariffs; Adjustment duties; paragraph 38, 
page 49   
 Question 
 The report explains that adjustment duties are set an nually by the Ministry of Strategy and Finance  
(MOSF), whose proposals are considered by th e Customs and Tariff Deliberation Committee.  
 
Can Korea elaborate upon the factors taken into account by these two bodies when making decisions 
regarding adjustment duties, including how a ffected products are selected and how the higher 
adjustment duty rate is determined?   
Answer 
 
If the requirements defined in related laws are met, relevant government organizations request the 
MOSF to review goods whether they are subject to  adjustment duties and set duty rates. After 
reviewing the request, the MOSF proposes the list of goods subject to the duties and duty rates. The 
Customs and Tariff Deliberation Committee which c onsists of experts deliberates and the MOSF 
finalize the list, and if approved by the St ate Council, announce it in a presidential decree. 
 The factors that the MOSF and the Customs and Ta riff Deliberation Committee consider are domestic 
and international market conditions including prices of products and import surges "whether surge of WT/TPR/M/204/Add.1 
Page 152  
 
  imports of the goods can disrupt the domestic mark et or collapse the domestic industrial foundation 
and how much injury the importation can cause."  Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iv) Tariff quotas,  (a) Agricultural  tariff quotas: paragraph 58, page 53 
 
Question  The Secretariat Report notes the latest data provide d by the authorities in 2006 shows the average fill 
rate of tariff quotas was around 68.3. It goes on to say,  "the consistently large unfilled share of tariff 
quotas on some items, even with relatively low in-quot a tariffs, suggests that their administration and 
allocation may, inter alia, be restricting imports ". Conversely, the Reports notes, "the authorities 
indicate that low TRQ fill rates resulted, inter alia, from lack of sufficient domestic demand or 
sanitary measures related to the outbreak of diseases in  exporting countries, such as the BSE, foot and 
mouth disease, and avian influenza."  
 
Based on Korea’s most recent MA notifications for 2003 and 2004, 19 of Korea’s 63 WTO tariff quotas had fill rates below 65% for both of these years; can Korea explain why these 19 tariff quotas have been consistently underfilled?   
Answer 
 
The reasons why some of the products have the low TRQ quota fill rates are attributed to SPS 
measures due to break out of BSE, AI and so on, domestic market conditions, price surge of imported 
agricultural products,  changes in industrial st ructure and decrease in import demand caused by 
economic downturn.   
 
Part III. TRADE POLICIES PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (iv) Tariff quotas,  (a) Agricultur al tariff quotas: paragraph 59, pages 53 
and 54 
 
Question 
 
The Secretariat Report notes that, "tariff quotas, and the import quota on rice, are allocated or 
operated by some 22 different organizations including ministries, state-trading entities, such as the Ministry of Food, Agriculture, Forestry and Fish eries  (MIFAFF) for rice and barley, and various 
producer associations, including the National Ag ricultural Cooperatives Federation and the Korea 
Feed Ingredients Association. In some cases, the administering authority is owned or controlled by 
domestic producers competing with the imported item."   How does Korea regularly monitor the numerous entities entrusted with tariff quota administration to make sure that they all comply with GATT Ar ticle XIII and the Agreement on Import Licensing 
Procedures?  
 
Answer 
 The Korean government, if necessary, can make TRQ recommendation agencies or auctioning 
authorities submit the record of TRQ recomme ndation, customs and public auction. 
  WT/TPR/M/204/Add.1 
 Page 153 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measu res: paragraph 73, page 57 
 
Question  
Paragraph 73 refers to a 2008 amendment to the Korean legislation governing the application of 
contingency protection measures has been changed to  ensure that the reviews of anti-dumping duties 
are to be conducted in an identical fashion to the pr ocess of original investigations. However, it is also 
stated that the calculation method of the anti-dumping duty margin was changed.    
Please describe the change in calculation methodol ogy in reviews of anti-dumping duties as opposed 
to the methodology employed in original investigations.   
Answer 
 
Please refer to the answer to China 2nd set’s question 2 (contingency measure). 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2)
 MEASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures  (a) antidumping: paragraph 74, page 57, 
and Chart III.4  (a), page 58 
 Question 
 It is noted that there was a marked decline in th e initiation of anti-dumping duty investigations in the 
years 2004-2006 inclusion.   
Can Korean authorities comment as to th e possible basis for this decline?  
 
Answer 
 If we look at the number of anti-dumping investiga tions that Korea initiated by items, not by nation, 
three were initiated in 2004, two in 200 5, three in 2006, and six in 2007.  
 
Regarding the anti-dumping investigation into Kraf t paper, Korea initiated an investigation against 
five countries. Because a number of countries were involved in the anti-dumping investigations 
initiated in 2007 concerning one single item, this worked to exaggerate statistics.  
 
There was actually no marked declin e in the initiation of anti-dumping duty investigations in the years 
2004-2006 inclusion. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2)
 MEASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures  (a) antidumping: paragraph 74, page 57, 
and Chart III.4  (b), page 58 
 
Question  It is noted that for the period under review, imports  of chemicals made up almost 25 percent of the 
total investigations initiated.  
 
 a) Is this trend a change from previous years?  b) Can Korean authorities comment on any change in trends?  WT/TPR/M/204/Add.1 
Page 154  
 
  Answer to a) 
 The high ratio of investigations into chemicals has  been a continuous trend since Korea adopted the 
anti-dumping investigation system.   
Answer to b) 
 The chemicals industry is capital-intensive requiri ng huge initial investments. In order to generate 
profit after making this initial investment, there is a need to maintain a certain operational level. 
Because there is no great differen ce in the quality among chemical products, the price itself is the 
major determinant for customers. 
 As a result, excessive quantities of chemicals produ ced abroad are dumped into domestic markets, 
thereby injuring the domestic industry.  
This is a global trend, and according to WTO statistics, among 3,210 investigations that were 
initiated between 1995.1.1. and 2007.12.31, a total of 651 investi gations concerned products of the 
chemical or allied industries, harmonized system section heading 
Ⅵ. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures  (a) antidumping: paragraph 74, page 57, 
and Table III.3, page 59 
 
Question 
 
It is noted that of the 30 final anti-dumping duty measures in place as of December 31, 2007, six are price undertakings. Canadian authorities have not ed a decline in the number of its own price 
undertakings over the past several years.   
Can Korean authorities provide any explanation as to continued use and the relatively higher number 
of price undertakings in Korea?   
Answer 
 Korea generally accepts the price undertaking, if the authority are satisfied that the injurious effect of 
the dumping is eliminated by the undertaki ng from the exporter to revise its prices. 
 Though price undertakings can reduce customs rev enue, Korea uses price undertakings because it 
can reduce negative effects by the imposition of anti-dumping duty measu res  (such as possible 
injuries caused by imbalanced supply and dem and and damage to consumer welfare) and lower the 
possibility of trade conflicts with exporters.   
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (viii) Contingency measures;  (b) Safeguards; General; paragraph 77, 
page 57 
 
Question  The Secretariat reports that Korea has not used safeguards to protect domestic industries since 2004.  Can Korea provide a list of all safeguard investigati ons, including expedited i nvestigations related to 
the application of provisional measures that ha ve taken place between 2004 and 2008, including those 
that did not result in the application of safeguard or provisional safeguard measures?   WT/TPR/M/204/Add.1 
 Page 155 
 
 
  Answer 
 Between 2004 and 2008, there were no applications of  safeguard or provisi onal safeguard measures. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 93, page 63 
 
Question  The Secretariat Report notes that the Korea Agency  for Technology Standards  (KATS) plans to 
promote private certification to create environments  for self-regulatory growth and development with 
the goal of minimizing market intervention.  Canada notes that Korea has implemented a number of standards regarding the preservative treatment of lumber to ensure the quality of treated lumber  available in Korea. Available market intelligence 
suggests that both certified and non-certified preserva tive treated lumber are commonly available in 
Korea.   Could Korea explain whether it intends to promote private certification for preservative treated lumber and conduct market surveillance and inspecti ons with view to ensure that all domestically 
preservative treated lumber meets minimum recognized preservative treatment standards to the benefit 
of all Korean consumers?  
 
Answer 
 The current number of certification for preserva tive treated lumber is 28 and the number of 
surveillance for preservative treated lumber is 22.  
 The use of preservative treated lu mber is increasing as the City government of Seoul and other 
provincial governments require certified preserva tive treated lumber for facility uses.  
Korea is making efforts to establish certification syst em for preservative trea ted lumber in order to 
protect consumers from harmful imported lumber and promote well-being culture.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; STANDARDS AND OTHER TECHNICAL REQUIREMENTS : paragraph 101, 
page 64 
 Question 
 The report states that "Korea is a member of the .... World Organisation for Animal Health  (OIE) ... ; 
it applies animal .... quarantine requirements based on these international standards. Its main laws on 
quarantine requirements for imports  (and exports ) are ... the Act for Prevention of Livestock 
Epidemics...." 
 
In September 2008, Korea enacted amendments to the Livestock Epidemic Prevention Act  (LEPA).  
 The amendments include the following provisions: In  order to import beef or beef products from a 
country where BSE has broken out for the first time, or to lift an import ban which had been placed on 
beef or beef products from such a country, the National Assembly must deliberate on the hygiene 
conditions of the beef or beef pr oducts imported from the said country; the Korean Minister of Food, 
Agriculture, Forestry and Fisheries may put a tempor ary ban on importing beef or  beef products in the 
case that BSE broke out in a beef-exporting countr y where hygiene conditions were already notified 
and thus urgent measures are required; beef and beef products of cows aged 30 months or more, WT/TPR/M/204/Add.1 
Page 156  
 
  which are from countries where BSE has broken out less than 5 years ago are subject to an import 
prohibition; and, in order to import beef or beef pr oducts of cows aged 30 months or more, based on a 
judgment that consumer confidence has improved, de liberation by the National Assembly is required. 
 Canada notes that the OIE BSE Chapter provisions of  the Terrestrial Animal Health Code establishes 
a process to evaluate and categorize BSE risk. For example, for countries designated as "controlled 
risk" the Code  (Article 2.3.13.11 in conjunction with  Article 2.3.13.1) provides for trade in all beef 
from cattle of all ages and in accordance with de fined inspection and certification procedures. 
Canada's view is that the new LEPA legislative amendments establish requirements which are considerably more trade restrictive than the relevant OIE provisions.  
 
How will Korea, as a member of the OIE, ensure that they will appl y these legislative amendments in 
a manner consistent with the relevant OIE provisions?   
Answer 
 
Amendment of the Prevention of Livestock Epidemic Prevention Act is a domestic measure reflecting social concern over the US beef import requiremen ts. The measure is considered not to have big 
influence on procedure for interna tional trade such as import risk analysis. In the implementation 
process, Korea will work in close coll aboration with the WTO members.   
 
Even if it is the beef from the cows aged 30 months or more in countries where BSE occurred less 
than 5 years ago, its import can be resumed when it is  proved safe by the import risk analysis.    
There was a social demand that risk analysis should be conducted.   
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; STANDARDS AND OTHER TECHNICAL REQUIREMENTS ; page 65, 
Paragraph 104  
 
Question  The Secretariat report notes "...Korea bans imports, for example, of live cattle, sheep and goats, and 
certain products from countries where BSE and foot and mouth diseases are known to occur."  
 Canada again notes that the OIE BSE Chapter provi sions of the Terrestrial Animal Health Code 
establishes a process to evaluate and categorize BSE risk. For countries designated as "controlled 
risk" the Code  (Article 2.3.13.11 in conjunction with  Article 2.3.13.1) provides for trade in all beef 
from cattle of all ages and in accordance with de fined inspection and certification procedures.  
 Again noting that Korea is an OIE member, how is the current ban on imports of beef imports from countries where BSE is known to occur, particularly for those countries designated by the OIE as "controlled risk", consistent with  the relevant OIE guidelines?  
 Answer  The Korean government basically respects OIE guilde lines with regard to BSE, but will exercise its 
rights to independently conduct import risk analysis at the same time.  If BSE risk controlled nations classified by the OIE make request for beef import, subsequently, 
authorities will determine whether to permit import through import risk analysis.   WT/TPR/M/204/Add.1 
 Page 157 
 
 
  Part III. TRADE POLICY AND PRACTICES BY MEASURE;  (2)  MEASURES AFFECTING 
IMPORTS ,  (x) Government procurement: paragraph 109, page 66 
 
Question  
The Secretariat notes that for GPA covered entiti es, contracts subject to Korea's commitments 
represented about 38.4% of total GP A-covered procurement in 2004.  
 Could Korea please clarify this statement?  Answer  That is incorrect. It should be corrected to "For GPA covered entities, contra cts subject to Korea's 
commitments represented about 38.6% of their total procurement in 2004."  
 
And it is mainly because of exclusion of military product (arms, ammunitions etc.) purchases. The 
MND (Ministry of National Defence) procured 7 tr illion won  (Above the threshold : 5.7 trillion won) 
in 2004. But The Amount of contract uncovered by the GPA was 5.5 trillion won. 
 
The Amount of Procurement Procured by GPA Covered Entities 
 (Unit:  Trillion won) 
Above the threshold 
  Covered by the WTO 
GPA Uncovered by the WTO 
GPA Sub-total Below the 
threshold Total 
  13.2 8.1 21.3 12.9 34.2 
Central Government Entitie s 5.7 6.7 12. 4 4.9 17.3 
Local Government Entities 2.3 0.2 2. 5 2.3 4.8 
Other Entities 5.2 1.2 6.4 5.7 12.1 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (a) Industrial property: 
paragraph 172, page 84  
 Question 
 The Secretariat report states, "The Patent Act of 1947  was totally revised in 2001 and last amended in 
2008."   
Could Korea please outline the key elements of the latest amendment (s) in 2008?  
 
Answer  
 The Patent Act was amended to reflect the ch anges in the names of ministries of the Korean 
government after the current  president took office. 
 WT/TPR/M/204/Add.1 
Page 158  
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 185, page 86 
 
Question 
 
The Secretariat report states that, "The production or provision of devices or services for circumventing copy control technology is prohibited."  20. a) Canada would appreciate knowing whethe r the act of circumventing copy control 
technology is included under this prohibition, and whether there are any exemptions 
for educational, personal use, research, or other specific purposes.  
  b) Also, is there a mechanism  (such as a regulation-making power) to recognize other 
exemptions in the future if a need arises? 
 
Answer to a 
 The current Copyright Act prohibits circumvention of  copy-control technological measures. However, 
upon amendment of the current Copyright Act to fulfill Korea’s obligation under the Korea-US FTA, 
direct and indirect circumvention of access-control technological measures will also be prohibited. 
 
Answer to b  Due to technological advancement, when it is nece ssary to introduce new exceptions and limitations 
on protection of technological measures, it can be do ne so after consultations with parties concerned.  
 
Question  The reports also states "...and a 'notice and take down system' provides legal incentives to promptly 
take down infringing materials at the rights holders’ request."   
21. a) Canada would be most grateful for a description of, or elaboration on, the "legal 
incentives" for internet service provide rs under Korea's "notice and takedown 
system".  
  b) In addition, does the right holder have to provide any information along with the 
request for takedown? 
 
Answer to a 
 According to the current Copyright Act, in case of  a infringing work is posted online, the relevant 
OSP can be exempted from liability only if the OSP, upon request of the right holder of the work, 
notices the right holder of the infringing use and immediately takes down the infringing work.  
 Answer to b  In case of copyright infringement, the right holder shall submit a request of suspension of 
reproduction and transmission of his work to the online service provider. 
 The rightholder should specify the title of the work and information on the location of the work such 
as URL at submission of his request.  
  WT/TPR/M/204/Add.1 
 Page 159 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 186, page 86 
 
Question 
 
The Secretariat report states that, "Compulsory li cences may be granted under strict procedural 
conditions: eight  (one on foreign works) were granted until 2007."  
 22. a) Could Korea please clarify whether co mpulsory licences, in this instance, would 
apply solely to "orphan works" or rather to works where the rights holders cannot be 
identified or located?  
  b) In what other circumstances or situations are compulsory licences granted?  Answer to a  Besides orphan works, when the whereabouts of the c opyright holder is unknown despite significant 
efforts made, the concerned work can be  used with deposit to the court.  
 Answer to b 
 
The compulsory licenses can be granted in the fo llowing cases. Specific compensation to the right 
holder or a deposit to the court should be m ade in order to obtain approval for use. 
  - when the whereabouts of the copyright hol der is unknown despite significant efforts 
made, the concerned work can be u sed after deposit to the court.  
  - broadcast of published works : Despite discu ssions with the right holder of published 
works by a broadcaster for the public pu rpose, when there is no agreement. 
  - production of records for sale : Despite di scussions with the right holder of records 
which spanned 3 years after first sale by  a person who wishes to produce another 
record using the concerned record , when there is no agreement.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (b) Copyright and related rights: 
paragraph 189, page 87  
Question  The Secretariat report states that, "Civil remedies  against copyright infringements  (including 
computer programs) include injunctions, dest ruction of counterfeit products, and damages." 
 
23. a) Canada would appreciate knowing who bears the cost for the destruction of goods 
deemed counterfeit in civil proceedings: is it the State or the rights holder? 
  b) In addition, are there any instances wher e destruction costs were included in damages 
awarded to the rights holder? 
 
Answer to a 
 Destruction of illegal works is undertaken by the government. WT/TPR/M/204/Add.1 
Page 160  
 
  Answer to b 
 It is understood that the cost of destructi on is not included in the amount of damage. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2)
 MEASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights;  (c) Enforcement: paragraph 194, 
page 88 
 
Question  
The Report mentions that the Public-Private Counc il for the Protection of the Intellectual Property 
Rights was established in 2006.   24. Could Korea please provide more information on the objectives and activities of this council?  
 Answer  The Public-Private Council for the Protection of the Intellectual Property Rights was established in 
February 1, 2006 comprising 31 government agencies and private companies, including Korea Customs Service, The Korean Intell ectual Property Office, and Nike.  
 
The Council is composed of legislation part and information part. The legislation part discusses 
strengthening protection of intellectual propert y rights and efficient management. The information 
part discusses exchange of information between public  and private sector in order to prevent entry 
and distribution of IPR infringing products.  
The Council holds regular meetings and opinions ra ised in those meetings are reflected in the 
Roadmap and Action Plans for the Advancement of Protection of IPR.  Officials in the front customs offices also partic ipate so that recommendations and suggestions from 
the private sector are delivered to  the front customs offices and difficulties in the management of the 
front offices are explained in ord er to improve mutual understanding.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE:  (2) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (vi) Intellectual property rights: paragraph 196, page 88 
 
Question 
 
The report states that a Copyright Protection Centre was created in 2005.   25. a) Could Korea please provide more detail on the size, scope, and specific activities of 
this centre? 
 
 b) Is there any data available on the eff ectiveness of its anti-piracy activities so far? 
 
Answer to a 
 It is established in April 26, 2005 to consolidat e the investigation activities which had been previously 
done by individual rightholder associations.  
  - personnel: 42 / 3 team  (Online team: 16, Offline team: 17, Planning: 8) 
 - activities   promotion activities for protection of copy  right and enhancement of public attention  WT/TPR/M/204/Add.1 
 Page 161 
 
 
    investigation of illegal works  
  collection and destruction of illegal works on offline   monitoring and requesting for deleting for illegal works on online  Answer to b 
 
The ratio of illegal works was redu ced as follows  (Source: BSA). 
 
  2003 2004 2005 2006 2007
Korea 48 46 46 45 43
Asia/Pacific 53 (61.8) 53 (61.1) 54 (61.2) 57 (62.1 ) 59 (60.2 )
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 145, page 75 
 
Question  It is reported that while the Government has no direct control over the lending programmes of the 
Industrial Bank of Korea  (IBK) and the Korea Devel opment Bank  (KDB), it tends to use them as an 
arm of industry and regional development policy.  
 
26. Under what circumstances does the Korean G overnment fund loans made by the IBK and at 
what interest rates?  
 
Answer 
 
There is no financial fund which the Industrial Bank of Korea  (IBK) deals with monopoly.  
 The reason why policy loan ration of IBK is 14.2% while that of other banks is lower than 4% is that the margin ration of the policy loan is lower than th eF margin ration of ordinary loan so that policy 
loan of the other banks is not facilitated. 
 
In general, the annual interest rate is 2%
～5.9%.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 145, page 75 
 
Question 
 
It is also stated that IBK does not maximize profits due to its public policy role.   27. Can Korean authorities expand upon that explanation?   Answer  The IBK focuses on assisting SMEs  
 WT/TPR/M/204/Add.1 
Page 162  
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M
EASURES  AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 146, page 75 
 
Question 
 
The report states that while the KDB does not extend loans at preferential rates to firms in specific 
industries, it is reported that lower interest ra tes are "seemingly available" for SMEs willing to 
relocate or for regional development purposes.   
28. Can Korean authorities provide further details?  
 
Answer 
 The Provincial Transfer Fund is established from the government funds and KDB funds to facilitate 
transfering companies located in the Seoul Metropolitan area to provincial area.  
 In 2008, the Fund is 200 billion KRW which came  from 30 billion KRW of government fund and 
170 billion KRW of KDB fund.   
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 146, page 75 
 
Question  
It is reported that KDB extends loans unde r the same conditions as commercial banks.  
 29. If so, then what is its purpose?   
Answer 
 
The KDB provides fund on the same condition as other commercial banks. 
 The purpose of KDB is to develop industry and suppl y and control industrial fund to facilitate the 
growth of the national economy.   
The KDB is owned by the government but it is not providing financial services with monopoly. It 
operates on a fair competition with other local and  foreign banks according to the market principle. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 147, pages 75 and 76 
 
Question  It is reported that the Government covers losses by the Korea Credit Guarantee Fund  (KODIT) and 
KIBO Technology Fund.  
 
30. Can Korean authorities provide details as to any losses by these funds that were covered by 
the Government in the period of review?    WT/TPR/M/204/Add.1 
 Page 163 
 
 
  Answer 
 During the period under review, there is no cases that the government co mpensated the losses. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (4) M
EASURES AFFECTING 
PRODUCTION AND TRADE ;  (viii) Financial assistance;  (a) Loans, guarantees, and other 
financial measures: paragraph 147, pages 75 and 76 
 
Question  
Reference is also made to the Act on Trade Adjustment Assistance. 
 31. Can Korean authorities provide details as to its recent use?   
Answer 
 
The Trade Adjustment Assistance Act took effect in April 2007, but no such assistance has yet been 
administrated.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 80, page 60 
 
The Secretariat Report notes that one of the objectiv es of the National Standards Plan is to remove 
technical barriers to trade by improving the national conformity assessment system.   32 a) Could Korea provide specific examples of how the national conformity assessment 
system has been improved and how such improvements have contributed to the 
removal of technical barriers to trade? 
  b) Could Korea explain how it plans to further improve the national conformity 
assessment system and how such plans would contribute to the removal of technical barriers to trade? 
 
Answer to a 
 20 kinds of conformity assessment procedures operated in accordance with the compulsory 
certification system were simplified and systemized into 9 kinds of those. It will be carried into effect 
in phases from January, 2009 to January, 2011. 
 Answer to b  The conformity assessment procedures of the co mpulsory certification system were harmonized with 
International Standards ISO/IEC Guide 67 for the sake of transparency. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 80, page 60 
 
Question 
 
The Secretariat Report notes that regulatory authori ties are to adopt, where possible, international 
standards when setting up or modifying technical or voluntary standards.  WT/TPR/M/204/Add.1 
Page 164  
 
  33. a) Could Korea elaborate precisely how th is requirement has been incorporated in 
regulatory policy?  
  b) How does Korea’s Regulatory Impact Assessment system provide for the evaluation 
of the impact of the adoption of natio nal versus international standards? 
 
 c) How does Korea monitor the extent to which regulatory authorities apply the policy 
on the use of international standards? 
 
Answer to a 
 
Article 20 of the National Standardization Act s tipulates that regulatory authorities are to adopt, 
where possible, international standards when setting up or modifying technical regulations related to 
environment, health and safety, or voluntary standards.  
Answer to b 
 Korea’s Regulatory Impact Assessment systems have not  provided for the evaluation of the impact of 
the adoption of national versus international standards till now.  Answer to c 
 
Article 6.2 of the Industrial St andardization Act stipulates that regulatory authorities shall consult 
with the Minister of Knowledge Economy, if necessa ry. This system would helpfully supplement 
monitoring. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 81, page 60 
 
Question  The Secretariat Report notes Korea’s important achievements in harmonizing Korean standards with 
international standards. Canada congratulates Kor ea on its high degree of success; 61.4% of Korean 
standards had been subject to international ISO/ IEC harmonization and 30% to other international 
standards.   34. a) It is reported that 2,945 standards are referenced in 65 regulations. Could Korea 
clarify whether this number refers to the sp ecific standards which are referenced in all 
regulations or to the number of times that standards have been cited in all regulations? 
  b Could Korea provide a comprehensive list of all standardization bodies, in addition to 
ISO and IEC, whose standards have been a dopted as the basis of Korean standards? 
 
Answer to a 
 2,945 standards mean the number of times that st andards have been cited in all regulations. 
 
Answer to b 
 The comprehensive list of all standardization bodies is unable to provide. Most of KSs which have 
been adopted from foreign standardization bo dies except ISO/IEC are referred to JIS (Japanese 
Standards). Since 1961, Korean Standards had been developed on basis of JIS. To harmonize Korean  WT/TPR/M/204/Add.1 
 Page 165 
 
 
  Standards with ISO/IEC standards, large amounts of  them were revised and are to be revised, but 
there are still 30% of Korean Standards. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 86, page 61  
 
Question  The Secretariat Report notes that tran sparency and the opportunity for interested parties to participate 
in the development or review process of Korean standards are ensured.  
 
35. a) Could Korea explain how transparency a nd the opportunity for in terested parties to 
participate in the development or review process of Korean technical regulations and 
conformity assessment procedures are ensured? 
 
 b) Could Korea explain to what extent and how transparency procedures also apply to 
the benefit of foreign interested parties?  
  c) Could Korea explain to what extent and on what terms foreign interested parties can 
participate in consultations regarding the development of technical regulations and 
conformity assessment procedures?  
 
Answer to a 
 The development procedures of "technical regulati ons and conformity assessment procedures is 
stipulated in the Administrative Procedures Act. To ensure transparency and opportunity for 
interested parties, we publish a notice in Official Gazette, "Gwanbo", at an early appropriate stage 
and on website of regulatory authorities.  Answer to b & c  In the development or review process of Korean t echnical regulations and conformity assessment 
procedures, Korea notifies the propo sed technical regulations and c onformity assessment procedures 
in pursuit of article 2.9 of the WTO/TBT Agreement. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 89, page 62 
 
Question  The Secretariat Report notes that environmental risk assessments for biotechnology crops are now 
mandatory, pursuant to recently enacted legislation implementing the Cartagena Protocol on Biosafety.  
 
36. a) Could Korea indicate which ministry or agency is responsible for conducting 
environmental risk assessments?  
  b) Could Korea elaborate on how it impl ements the Advanced Informed Agreement 
Procedure and Labelling? 
  c) Could Korea provide additional informa tion on the documentation and administrative 
requirements contained in its implementing legislation of the Cartagena Protocol on 
Biosafety? WT/TPR/M/204/Add.1 
Page 166  
 
   d) Could Korea provide information on ho w products for propagation, and those for 
food, feed and processing, are distinguished under this legislation? 
  e) Could Korea confirm whether one application could be submitted for the 
authorization of a genetically modified organism  (GMO) for propagation, and for 
food, feed and processing, or must a separate application be submitted for both?  
Could Korea indicate to which agency or agencies the application (s) must be directed? 
 
Answer to a 
 
The Ministry of Environment has authorized the National Institute of Environmental Research to 
conduct "environmental risk assessments", while the Ministry for Food, Agriculture, Forestry and 
Fisheries has authorized the Rural Development Ad ministration to conduct "crops cultivation 
environment risk assessments," and the Ministry  of Land, Transport and Maritime Affairs has 
authorized the National Fisheries Research and Devel opment Institute to conduct "marine ecosystem 
risk assessments".  Answer to b  Upon the initial introduction to Korea of any LMOs for propagation  (LMOs for environmental 
release), exporters must first receive approval fr om the central government. The Ministry of 
Knowledge Economy is responsib le for this procedure. 
 Any person who develops, produces or imports LMOs  must provide certain information about the 
product, either on the product itself or on the package  or container. This information is specified in a 
Presidential Decree. 
 Answer to c  Please make your question more specific.  
Answer to d 
 In Korea, LMOs for propagation are classified as  "LMOs for environmental release," and exporters 
are required to follow the Advanced  Informed Agreement procedure prior to their initial introduction 
to Korea. 
 
Documents related to domestic environmental release trials and other relevant risk assessment 
procedures need to be submitted for LMOs for pr opagation as part of the import review process.  
 However, in the case of LMOs for food, feed and processing, documents on domestic environmental 
release trials are required only upon request by the committee responsible for risk reviews.  
 
Answer to e  Separate procedures are in place because LMOs for propagation and LMOs for food, feed and 
processing serve different purposes.   
 
Prior to the initial introduction to Korea of an y LMOs for propagation  (classified as "LMOs for 
environmental release" in Korea),  exporters must receive authorization from the Ministry for Food, 
Agriculture, Forestry and Fisheries through the Ministry of Knowledge Economy. 
  WT/TPR/M/204/Add.1 
 Page 167 
 
 
  Exporters of LMOs for food must receive author ization from the Korea Food and Drug 
Administration, while LMOs for feed require approv al from the Rural Development Administration.  
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 89, page 62 
 
Question  The Secretariat Report also notes that KDFA ha s the authority to conduct mandatory safety 
assessments to evaluate genetically modified or ganisms  (GMOs) in products used for human 
consumption. Canada unders tands that, in addition to the KFDA, four other Korean agencies are also 
responsible for the implementation, monitoring and enforcement of the Act on the Transboundary 
Movement of LMOs.   37. a) Could Korea elaborate on the roles of each of these four other agencies, and provide 
information on whether there is a central coordinating agency responsible for 
oversight of the process?   
  b) Could Korea explain which of these agencies are involved in approving genetically 
modified organisms for use in Korea, for both propagation and use for food, feed and processing  (for domestically produced GMOs and imports)? 
 
Answer to a 
 The Korea Food and Drug Administration is responsibl e for LMOs for food; the National Institute of 
Environmental Research oversees environmenta l risk assessments, the Rural Development 
Administration oversees "crops cultivation environm ent risk assessments" and the National Fisheries 
Research and Development Institute is responsible for marine ecosystem risk assessments.  
 Answer to b  The same approval process applies to both  domestically produced  and imported LMOs. 
 
LMOs for propagation  (classified as "LMOs fo r environmental release " in Korea) require 
authorization from the Ministry for Food, Agricultu re, Forestry and Fisheries through the Ministry of 
Knowledge Economy upon the introduction of a new product to Korea. Reviews are necessary from 
the Korea Centers for Disease Control and Prevention,  the National Institute of Environmental 
Research and the National Fisheries Re search and Development Institute. 
 The Korea Food and Drug Administration must approve the introduction of new LMOs for food. Reviews are necessary by the National Institute of  Environmental Research, the Rural Development 
Administration and the National Fisheries Research and Development Institute.  
The introduction of new LMOs for feed must be appr oved by the Rural Development Administration. 
Reviews by the National Institute of Environm ental Research, the National Fisheries Research and 
Development Institute and the Ko rea Centers for Disease Contro l and Prevention are necessary. 
 WT/TPR/M/204/Add.1 
Page 168  
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements: paragraph 92, page 62 
 
Question  
The Secretariat Report notes that the relevant regul atory authority processes certification for technical 
regulations using test reports from government-designated laboratories.  
 38. a) What are the technical requirements for the designation of a laboratory by the 
government?  
 
 b) Are foreign-based laboratories eligible  for designation? Which regulatory authorities 
in Korea, if any, require that a laboratory be physically located in Korea in order to be designated and what is the justification for any such requirement?  
 Answer to a  The technical requirements for the designation of a laboratory by the government are stipulated in the 
relevant laws of regulatory authorities. Those la ws refer to management system and the technical 
requirement of the International Standard, ISO/IEC 17025.   
Answer to b 
 There are no laws or no provisions of relevant la ws to restrict the designation of foreign-based 
laboratories.  
 Question 
 39. What are the technical requirements for the designation of a laboratory by the government? 
Are foreign-based laboratories eligible for designation?  
 
Answer 
 
Please refer to answers to Question 38. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 94, page 63 
 
Question  The Secretariat Report notes th at Korea’s accreditation bodies,  the KOLAS and the KAS, are 
signatories to a number of mutual recognition arrange ments  (MLAs), including ILAC, IAF and PAC.  
 
40. To what extent do regulatory authorities in Korea recognize test results and certificates 
traceable to foreign accreditation bodies who are also signatories to these MLAs?   
Answer 
 
KOLAS has notified the regulatory authorities of the signatories to the ILAC-MRA, and it has 
recommended the relevant regulators to accept the testing reports issued by the KOLAS-accredited 
organizations. Currently, the 26 laws of 6 governme nt ministries are accepting the KOLAS scheme. 
  WT/TPR/M/204/Add.1 
 Page 169 
 
 
  Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 94, page 63 
 
Question  
The Secretariat Report notes that Korea is a member of the APEC MRA on Conformity Assessment 
of Telecommunications Equipment  (Phase I) and of Part I of the APEC Electrical MRA and that Korea is considering whether to participate in Parts II and III.  41. Could Korea indicate what are its current pl ans regarding participation on Phase II of the 
APEC TEL MRA?  
 
Answer 
 
Implementation of Phase 
Ⅱof APEC-TEL MRA was agreed in the KORUS FTA, the date of 
implementation will be one year after the date of the entry into force of the KORUS FTA. Currently, 
implementation of Phase Ⅱ of APEC-TEL MRA is being prepared.  
 
It is also discussed in the Korea-Canada FTA to est ablish a clause to cooperate for implementation of 
Phase II of APEC-TEL MRA.   Phase III
 can be discussed after approval by APEC-TEL si nce the draft of common agreement to be 
applied to APEC is prepared in the MRA division of APEC-TEL.  
 Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technica l requirements; page 63, paragraph 95 
 
Question  
The Secretariat Report notes that Korea established a self-certification system for automobiles in 2003 
and that all new standards on safety were based on in ternational standards  (i.e. ISO/IEC, UN ECE, 
EU EEC and FMVSS).   42. a) Could Korea confirm whether all new Ko rean automobile safety standards developed 
since the implementation of the self-certification system in 2003 correspond to an 
equivalent ISO/IEC, UNECE, EU EEC or FMVSS international standard?  
  b) Could Korea provide a list of each Korean standard and, if available, its equivalent 
international standard? 
 
 c) Could Korea explain what procedures and requirements must be met by foreign 
vehicle manufacturers in order to certify vehicles under the self-certification system?  
  d) Is self-certification by foreign vehicle manufacturers to an equivalent international 
standard accepted by Korea?  
 
 e) Canada understands that Korea adopted the self-certification system in 2003 as part 
of its commitments under the Memorandum  of Understanding Regarding Foreign 
Motor Vehicles with the U.S., pending the adoption of Korea's new draft Regulation of Motor Vehicle Self-Certification and Ma nufacturing Defect Investigation.  Could 
Korea confirm when this new draft regulation is expected to be finalized? 
 WT/TPR/M/204/Add.1 
Page 170  
 
  Answer to a 
 Since 2004, the Korean Government has conducted studies on 4 to 5 Korean automobile safety 
standards a year to find whether the international standards such as UN/ECE or GTR can be harmonized with the domestic safety standards . Based on the study results, it has made final 
determination concerning whether to accept such international standards. 
  In other words, Korea has set the harmonizatio n with international standards upon the developing or 
revising domestic standards as a basic principle.  In addition, it reviews the correspondence of 
international standards to domestic road and traffic conditions, then making a final determination for 
the applicability of such standards.   
 Answer to b  Korea's safety standards consist of  125 provisions as of September 2008. We would like to ask for 
understanding that it is impossible to judge and indica te which international standards are equivalent 
to those provisions.  Answer to c  Under the self-certification system, a vehicle m anufacturer or importer is obliged to certify 
compliance with the safety standards on his own responsibility. We understand that Canada has same 
system. There is no prior certification pro cess by government under this system. But a 
manufacturer/importer should notify the Ministry of Land, Transport and Maritime Affairs of the 
vehicle specifications for efficient management of vehicles.  
Answer to d 
 Korea accepts the manufacturing based on some of the UN/ECE and FMVSS standards. However, 
that doesn't mean foreign manufacturers are exempted from recall responsibility. 
 Answer to e 
 
We are working on the new draft regulation. However, it is difficult to forecast when the draft will be 
finalized at this moment. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE;  (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ;  (ix) Standards and other technical requirements; paragraph 108, 
page 66  
Question 
 The Secretariat Report notes that mandatory biotechnology labeling requirements apply for 
genetically modified corn and soybeans as well as  for processed foods containing these products.  
 43. a) Could Korea confirm that corn and soybeans are the only genetically modified 
products that require labeli ng under these requirements? 
 
 b) Could Korea provide more information on the nature of the labeling requirements? 
  c) In addition to the labeling requirement s, could Korea provide information on its 
import requirements and procedures for pr ocessed foods derived from genetically 
modified products?  WT/TPR/M/204/Add.1 
 Page 171 
 
 
  Answer to a 
 As of May, 2008, sugar beet, cotton, and canol a are included as GM products that require GMO 
labeling.  
Answer to b 
 GMO labeling is required for the top 5 ingredie nts listed in descending order of proportion in 
processed foods where GM products are used.  However, soybean sauce, oil, and corn sugar are excluded from GMO labeling since these products 
are free of GMO ingredients after manufacturing.  
 Answer to c  When processed foods derived from genetically  modified products, except corn sugar etc., are 
imported to Korea, it should be indicated on the an import certificate that these products are GMO 
foods. 
 
Part IV TRADE POLICIES BY SECTOR;  (2) A
GRICULTURE ;  (ii) Policy developments; 
domestic support: paragraph 22, page 98  
 Question 
 Paragraph 22 references the estab lishment of a W2.1 trillion fund and disbursement of these funds to 
compensate some fruit producers affected by the Korea-Chile FTA.   
44. a) Could Korea please provide the amount of  payment in each year from 2004 to 2007?  
  b) In order to receive payments, were the producers required to retire permanently from 
marketable agricultural production? 
 
Answer to a 
 
The FTA fund provided to support retiring farmhouses are as following. 
(unit : KRW hundred million)  
  ‘04 ‘05 ‘06 ‘07 Total 
Compensation (support retiring) 247 530 668 565 2,010 
 
Answer to b  In an exchange for subsidies, the farmers are asked to retire from commercial production of 
concerned products, not the w hole agricultural products. 
 
Part IV. TRADE POLICIES BY SECTOR;  (4) E
NERGY ;  (i) Petroleum and petroleum 
products: paragraph 47, page 104 
 
Question 
 
Korea has benefited from the liberalization of trade,  and as an original member of the WTO plays an 
overall positive role in the advancement of interna tional trade objectives. However, Korea continues 
to have trade barriers in the forms of tariffs to cer tain products that include refine oil products and 
crude oil.  WT/TPR/M/204/Add.1 
Page 172  
 
  45. Does Korea intend to take the necessary step s to reduce these trade distorting practices?  
 
Answer 
 Korea imposes import taxes on crude oil and oil pr oducts. As Korea imports its whole crude oil 
requirements from abroad, the import taxes are levied  on all oil products consumed in the nation. 
Therefore, the import taxes are working more like in ternal taxes. Also, the political purpose of 
imposing the taxes is not to limit imports.  
 
Part IV. TRADE POLICIES BY SECTOR;  (4) E
NERGY ;  (i) Petroleum and petroleum 
products: paragraphs 49 and 50, page 104  
Question  Paragraph 49 states that Korea is the world’s second and fourth largest importer of LNG and LPG 
respectively. The Secretariat also reports that there is an absence of a market-based system in the gas 
sector.   46. Does Korea plan to promote a market a pproach for wholesale trade, including imports, 
storage, transmission and wholesale di stribution of LNG by pipelines?  
 Answer  Korea has proceeded with natural gas market  reform in a steady and progressive manner by 
modification of the Natural Gas Indus try Restructuring Plan in 2003. 
 
Some companies (POSCO, K-POWER) are allowed to im port LNG directly from overseas, if it is for 
the company’s "own use"   The Open Access System was ado pted with the revision of the City Gas Act on December 2007. 
Wholesale businesses that operate gas transmissi on and LNG receiving terminals have to allow the 
use of their pipelines by businesses that import natural gas directly.  
 
Also, the accounting process of gas supply facilities has been separated from that of gas sales.  
 With this step, Korea has laid a foundation for the introduction of competition to the market. 
 
Korea will progressively promote Natural Gas Indus try Restructuring Plans in order to protect 
consumer interests and to keep the balance of demand and supply.  Part IV. TRADE POLICIES BY SECTOR;  (4) E
NERGY ;  (i) Petroleum and petroleum 
products: paragraph 60, page 105 
 Question 
 The report indicates that domestic coal production continues to be supported by direct production 
subsidies.  
47. Does Korea have any plans for KEPCO to adopt  a market-based approach and eliminate any 
form of production and consumption subsidies?    WT/TPR/M/204/Add.1 
 Page 173 
 
 
  Answer 
 The government, in order to alleviate its financial burden and to enable the domestic anthracite coal 
market to recover, is phasing in an increase in the price of coal and briquette.  
Coal prices were raised by 10% in 2007 and 15.5% in 2008. Briquette prices were raised by 20% in 
2007 and 30% in 2008.   The government plans to reduce subsidies by gr adually raising the price of coal and briquette. 
 
Part IV. TRADE POLICIES BY SECTOR;  (5) M
ANUFACTURING ;  (i) Automobiles; 
paragraph 65, page 109 
 
Question  
The Secretariat reports that imported vehicles a ccount for about 5% of the domestic automobile 
market in Korea, an increase of 111.7%.  48. a) Can Korea elaborate on the factors that could have led to the recent increase in the 
import penetration of vehicles into Korea? 
 
 b) Can Korea elaborate on the reasons why the import penetration of vehicles in Korea 
remains very low compared to the other major vehicle producing OECD countries  
(which tends to exceed 40%), and on th e measures Korea plans to undertake to 
eliminate import barriers in its vehicle market?  
 Answer to a  Memorandums of understanding concluded in 1995 and 1998 between Korea and the United States 
removed all barriers to the import of foreign vehicl es to Korea. The subsequent increase in imports 
changed consumers’ perception of foreign cars.  
After the financial crisis in 1997, Korean society became far more polari zed in terms of income level. 
As a result, high-income earners began purchasi ng more foreign vehicles. At the same time, 
consumers with moderate incomes gained more choi ces as Korea began importing smaller vehicles 
and vehicles within the 30 million won range.  
Importers established more showrooms and launched mo re aggressive marketing strategies, such as 
enhanced warranties and more flexible payment pl ans. Additionally, more companies began to take 
part in parallel importing.   Answer to b  
The market share of imported ca rs increased from 1 percent in 2001 to 6 percent in 2007 and is 
expected to increase to 7 p ercent in 2008. In the mid- to long term, the figure is expected to reach 
15 percent.  While the annual growth rate for domestically produced cars has dec lined 4.8 percent since 2002 as a 
result of the economic slowdown, that for importe d cars has reached 32.5 percent. Furthermore, 
Japanese cars have experienced 58 percent annual growth.  
 The market share for imported cars remained at th e low level of 6.2 percent in 2007 because the 
market centered on expensive luxury  vehicles such as the Mercedes -Benz, BMW and Lexus. However, WT/TPR/M/204/Add.1 
Page 174  
 
  if one looks at the market for full-size cars w ith more than 3,000-cc capacity –  a market which 
accounts for 12 percent of all passenger cars –  th e figure was as high as 33 percent as of 
August 2008.  The figures should be considered in light of spec ific markets rather than the general car market.  
 
Part IV. TRADE POLICIES BY SECTOR;  (5) M
ANUFACTURING ;  (i) Automobiles; 
paragraph 66, page 109 
 
Question 
 
The Secretariat reports that local automobile ta xes and the special excise tax are levied based upon 
engine capacity, with the highest rate applie d to cars with engines exceeding 2,000cc.  
 49. Can Korea provide any information on its e fforts to reform/change its vehicle engine 
displacement taxes?  
 
Answer 
 According to the KORUS FTA, when it enters into fo rce, the special excise tax will be reduced to 5% 
irrespective of engine capacity. The automobile tax for vehicles with engines not exceeding 1,000cc 
will be taxed at a single rate of 80 KRW per cc, 140 KRW for vehicles with engines between 1,001cc 
and 1,600, and 200 KRW for vehicles with  engines exceeding 1,600cc respectively. 
 This will apply to all vehicles irrespective of its origin.   
There is no plan for other changes.   
Part IV. TRADE POLICIES BY SECTOR,  (6) S
ERVICES ,  (v) Telecommunications: 
paragraph 112, Page 121 
 
Question 
 
Paragraph 112 indicates that broadband access provi ders and CATV provide rs are designated as 
facilities-based operators with the convergence between telecommunicati ons and broadcasting 
services.   
Could Korea provide information on its regulatory regime with respect to access to these networks by 
competitive telecommunications service providers?   
Answer 
 Paragraph 112 means that internet access service s were designated as facilities-based telecom 
services in 2004 and high-speed internet service  providers and CATV providers were approved as 
facilities-based operators in 2004 and 2007 respectively. Before July 2004, internet access services 
providers were classified as value-added service providers.   WT/TPR/M/204/Add.1 
 Page 175 
 
 
  CANADA – FOLLOW UP  
 Report by the Secretariat (WT/TPR/S/204)
 
 Part II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES; (6)
 TRADE 
AGREEMENTS AND ARRANGEMENTS ; (i) Korea and the WTO; paragraph 20, page 23 
 
Canada thanks Korea for its response to question 3. 
 Canada notes that certain FTAs to which South Ko rea is a Party contain provisions that allow 
specified amounts of outward processing to occur out side the territory of South Korea (i.e., South 
Korea - Singapore FTA Article 4.4).   Question  
1. Given these provisions, what mechanisms are in place to track the value of production or 
operations that take place in North Korea, incl uding in the Gaesong Industria l Complex, on goods that 
are subsequently re-imported to South Korea for furt her production, to ensure that a good meets the 
applicable rule of origin when e xported to South Korea's FTA partners? 
 
Answer 
 
1. Legal Backgrounds of the customs procedures for the GIC  The customs procedures for the GIC are governed by an agreement between South and North Korea 
on customs procedures for GIC.  Based on this agreement, both sides have enacted domestic laws and 
regulations that put into practice the agreed ru les of the customs procedures. South Korea, on its 
part, promulgated on May 10, 2005,  a Public Notice on the Customs Procedures for the Goods and 
Vehicles Carried In and Out to/from the GIC ("Public Notice").   Given the special status of the GIC as well as the uniqueness of the nature of the overall economic 
relations between the two Koreas, the terms "carryi ng-in" and "carrying-out" are used instead of the 
terms "importing" and "exporting" which are normally used in trade between countries.  
 As of today, the compound of the GIC is completely sealed from the rest of the North Korean territory
 
in terms of both in-flow and out-flow of material s or goods, except for labor force provided by North 
Korean workers. Therefore, if goods produced in the GIC are to be exported to third countries, they 
can be exported only through Sout h Korean ports/airports. In other words, they will not be exported 
to foreign countries directly from the GIC nor from the other ports of the North Korean territory.  
 2. Mechanism of the customs procedures  South Korea’s regulations stipulate that, when a company carries out any material to the GIC, the 
company shall fill in the carry-out applicatio n form and submit it to a South Korean customs 
authority by using EDI (Electronic Data Interc hange) system, along with other required documents 
such as an invoice, a rate-of-yield calculation form  and a product list.  This process is the same as 
typical customs procedures, excep t for the requirement to add the special note to the application 
document, which reads "the materials carried out to the GIC." 
 WT/TPR/M/204/Add.1 
Page 176  
 
  North 
Korea
Subsidiary
company of(1) Carry out materials from South Korea to the GIC
(2) Carry in manufactured goods back to South Korea
(3) Export final products to overseas countries (rarely the case)GIC
CustomsCIQ
CIQ
South
Korea
Company A(1) (2)
EXPORT(3)
 
 
All materials are transported to the GIC by land.  At the CIQ (Customs, Immigration and Quarantine) 
branch office at Dorasan of Korea Customs Service, which is "the" exit point from South Korea to the 
GIC, customs officers inspect the declared materials and verify relevant documents before allowing 
them to be carried out to the GIC.   
 Company A’s subsidiary in the GIC would receive those materials from Company A and perform 
manufacturing or assembling process, using labor sourced from North Korea.  No material 
originating in North Korea is added.   Once the manufacturing process is completed, the subsidiary 
sends the goods back to Com pany A through the same customs offices of two Koreas.   
 
In order to carry in the manufactured goods, Comp any A should present the carry-in application and 
relevant documents to a South Korean customs author ity.  In particular, Company A shall submit the 
form of "Origin Declaration for the GIC Goods" set ou t in Article 3.3.3(1) of the Public Notice.  The 
origin declarations specify the value of materials or iginating in South Korea out of the total value of 
materials and the quantity and FOB value of carry-in goods  as well as previously carry-out materials.  
Based on those documents, a South Korean customs author ity determines the origin of the goods from 
the GIC. In order to determine whether the goo ds meet the criteria for South Korean originating 
status, the Dorasan CIQ branch office of Korea Cu stoms Service performs verification by comparing 
the carry-in application with the carry-out  application submitted earlier.   
 
Question  2. Are the goods that are produced, in part, pur suant to the outward processing provisions found 
in some of South Korea's FTAs, including pertai ning to the GIC, deemed "South Korean Goods" 
under each respective FTA?  Are they, in any way, differentiated from South Korean goods that are 
not produced pursuant to outward processing provisions?   
 3. Are outward processed goods considered "South Korean Goods" if they are exported to a non-
FTA (i.e. MFN) trading partner?   WT/TPR/M/204/Add.1 
 Page 177 
 
 
  Answer to 2 & 3 
 In general, almost all the goods manufactured in the GIC have so far been sold in the domestic 
market of South Korea. Only a negligible amount was exported to Korea’s FTA partners as well as a 
non-FTA partner of Korea.  In order to acquire the South Korean originating status regarding the 
goods produced in the GIC, two strict conditions should be  met as follows; 
 (i)  no less than 60% of the equity of the subsid iaries in the GIC should be held by South Korean 
nationals; and  
(ii)  the value of materials originating in South Korea is no less than 60% of the total value of 
materials put into the final goods produced in the GIC. 
 Even if the GIC goods were conferred the South Kore an originating status by a South Korean customs 
authority when carried-in from the GIC, it does not  imply that those goods would be regarded as 
originating goods under Korea’s respective FTAs automa tically.   It should be noted that, only those 
goods from the GIC which meet the c onditions set out in the each Rules of Origin Chapter of FTA text 
will be considered as originating goods.  The Ko rean customs authority w ill conduct verification in 
order to establish whether the goo ds concerned meet the conditions as set out in the FTA text and 
issue a Certificate of Origin (C/O) accordingly.  In addition, the goods that are fa vored the preferential treatment of rules of origin are limited to a 
confined list (i.e., 267 Items (HS 6 digit) on th e Korea-EFTA, 100 items(HS 6 digit) on the Korea-
ASEAN FTA).  When the goods produced in the GIC are exporte d to a non-FTA Countries, the exports customs 
procedures toward the goods that have been conferred to the South Ko rean originating status will be 
the same as the general customs procedures applied to exportations of any other goods. 
 Part III. TRADE POLICIES PRACTICES BY MEASURE; (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; (iv) Tariff Quotas, (a) agricultural tariff quotas: paragraph 59, pages 53 
and 54  
Canada thanks Korea for its response.  
 Question  4. Could Korea please clarify whether it has a structure in place to regularly monitor the 
numerous TRQ administration entities (so they comply with GATT XIII and the Agreement on 
Import Licensing) and if so, to please describe in detail the method by which it does that.  
Answer 
 
The Korean government makes TRQ administration entities submit record of TRQ recommendation 
and customs every quarter. As a result of monitoring,  the government may exclude the entities with 
poor result in TRQ implementation and replace them with other agencies. 
 
Question 
 
5. In that context, has Korea investigated  the auctioning requirements of these TRQ 
administration agencies; what documentation has b een requested from the ag encies to support these 
investigations?    WT/TPR/M/204/Add.1 
Page 178  
 
  Answer 
 
Government approval is a precondition, if these TR Q administration agencies are to make public 
notification on auctioning requirements or to change it. If the government find the contents of notice 
inappropriate, it may order agencies to revise them.  
 
Question 
 
6. What, if any, changes have the agencies impl emented in their auctioning practices as a result 
of these investigations since 2004? 
 
Answer 
 
There were no changes. 
 
Part III. TRADE POLICIES PRACTICES BY MEASURE; (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; (viii) Contingency measures; (b) Sa feguards; General; paragraph 77, 
page 57  
Canada thanks Korea for its response to ques tion 14 concerning the application of safeguard 
measures.  
 
Question 
 
7. Can Korea provide a list of all agricultural a nd industrial products that were identified in 
submissions made by industry or government ministries/agencies requesting the instituting of a 
safeguard or provisional safeguard measure between 2004 and 2008?  
 
Answer 
 
Between 2004 and 2008, there were no submissi ons made by industry or government 
ministries/agencies requesting the instituting of  a safeguard or provisional safeguard measure. 
 
Question 
 8. Can Korea indicate the total number of safeguard (including provisional measures) 
investigations carried out by the KTC in the period from 2004-08, including from these submissions? 
 
Answer 
 
Because there were no submissions for safeguar d measures, the KTC carried out no safeguard 
investigations between 2004 and 2008,  including provisional measures. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE; (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; (ix) Standards and other technica l requirements: paragraph 89, page 62 
 
Korea requested that Canada provide a more specific question. 
  WT/TPR/M/204/Add.1 
 Page 179 
 
 
  Question 
 Could Korea provide information on what administra tive steps exporters must take to be able to 
export GMOs to Korea? More specifically , could Korea provide information on:  
 
a. Precisely what documents are required at the border;  
b. Whether there is a requirement for a borde r inspection/test and if so, information on 
how Korea plans to carry out these inspections/tests.  
c. Could Korea also provide information on whether there will be a set time limit for the 
length of time any inspection/test at the border? 
Answer to a 
 
Imports are allowed only for GMOs which have co mpleted a risk assessment. Documents to be 
submitted for import approval of such biotech products are as follows:  
 
 - Documents related to data on risk assessment 
 - Risk assessment certificate issu ed by the Korean government  
 - Information described in Biosafety Protocol Annex II  - Contract dossiers for import and conveying  - Plans for LMO safety management  - Information on the status of  specialized workforce and facilities  
 
However, LMOs previously comple ted the risk assessment or appro ved for imports to Korea are 
required to be accompanied by contract dossiers for import and conveying, plans for LMO safety 
management, and information on the status of specialized workforce and facilities only. Answer to b 
 
A border inspection/test is carried out for GMOs bas ed on testing methods provided from developers, 
etc. in order to determine the presence of GM Os which have not been approved. Non-GMOs are 
tested to determine the presence of GMOs whic h have not been approved, as well as to evaluate 
appropriateness of non-GMOs according to 10. Gen eral Testing Method, and 23. Testing Method for 
GM Foods under Food Sanitation Act, Article 12 (Food Code). 
 
Answer to c 
 
Import approval takes 270 days for LMOs which ha ve not gone through a risk assessment, and 
10 days for LMOs previously completed a risk assessment or approved for imports.  
 
Question  10. Could Korea also provide information on whether there is a central coordinating agency 
responsible for oversight/coordination of th e departments listed in Korea’s response? 
 Answer  
 
Ministry of Knowledge Economy coordinates the government ministries involved. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE; (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; (ix) Standards and other technica l requirements; paragraph 94, page 63 
 
Canada would like to thank Korea for its response and has two follow up questions:  
 WT/TPR/M/204/Add.1 
Page 180  
 
  Question 
 11. Could Korea clarify whether the reference to  "KOLAS-accredited orga nizations" is actually 
meant to refer to "organizations accredited by foreign accreditation bodies who are also signatories to 
the ILAC MLA"? If so, does Korea's response imply th at the 26 laws of 6 government ministries are 
accepting test reports issued by organizations accredited by foreign accreditation bodies who are also 
signatories of the ILAC MLA? 
Answer 
 "KOLAS-accredited organizations" in Korea's respon se does not mean to refer to "organizations 
accredited by foreign accreditation bodies who a re also signatories to the ILAC MLA.  
 
Question 
 
12. Could Korea also indicate whether KAS has notified Korean regulatory authorities of the signatories of the IAF and PAC MLAs and to what extent regulatory authorities in Korea accept the 
certificates issued by organizations accredited by foreign accreditation bodies who are also signatories of the IAF and PAC MLA?  
Answer 
 
The KAS has notified the regulatory authorities of th e signatories of the IAF and PAC MLAs. There is 
no case for regulatory authorities to accept the certi ficates issued by organizations accredited by the 
KAS.  Part III. TRADE POLICIES AND PRACTICES BY MEASURE; (2) M
EASURES DIRECTLY 
AFFECTING IMPORTS ; (ix) Standards and other technical requirements; page 63, paragraph 95 
 
Canada would like to thank Korea for its response for the questions 42 a) and d) and has two follow 
up questions.   Question  
13. Of all the domestic safety standards develope d or modified since 2004, could Korea please 
indicate which standards have been harmonized,  which ones are currently being considered 
for harmonization, and which ones have not b een harmonized with international standards 
such as ISO/IEC, UN ECE, EU EEC and FMVSS? 
 
Answer 
 
For example, passenger car brake(UN/ECE R13H),  front fog lamp(UN/ECE R19), rear underrun 
protection(UN/ECE R58) and door locks & door ret ention components(GTR 1) have been harmonized 
with international standards. 
 
Korea participates UN/ECE/WP.29 actively and gives mo st preferential consideration to UN/ECE or 
GTR when developing and modifying domestic standards. 
 
Question 
 
14. Could Korea please provide a list of all the UNECE and FMVSS standards to which 
manufacturers can self-certify under Korea's self-certification regime as well as the Korean standards to which they are considered equivalent? 
  WT/TPR/M/204/Add.1 
 Page 181 
 
 
  Answer 
 
Korea certifies 28 US and 26 UN/ECE standards such as those for passenger crash protection. We 
are planning to increase the harmonization of Korean automobile safety standards with the 
international standards continuously. 
 
Part III. TRADE POLICIES AND PRACTICES BY MEASURE; (2) M EASURES DIRECTLY 
AFFECTING IMPORTS ; (ix) Standards and other technical requirements; paragraph 108, page 66 
 
Canada would like to thank Korea for its response to question 43 b), and has one follow up question. Korea notes that soybean sauce, oil and corn s ugar are excluded from GMO labelling since these 
products are free of GMO ingredients after manufacturing.   Question 
 
15. Could Korea confirm that all processed oils derived from GM oilseeds, which have no GMO 
ingredients after manufacturing, are also exempt  from labelling?  More specifically, would Korea 
confirm that Canola oil is exempt from the GM la belling requirements, given that canola oil derived 
from GM canola/oilseed rape has no GM ingredients?  
Answer 
 
Canola oil is exempt from the requirement of GMO labeling. 
 
Question 
 
16. Regarding question 43 c), could Korea clarify that imported canola oil would also be exempt 
from the requirement for the term "GMO" to be placed on the import certificate?   
 
Answer 
 
Canola oil is not subject to GMO labeling, and wa ived from the requirement for the term "GMO" to 
be placed on the import certificate. 
 Part IV - TRADE POLICIES BY SECTOR; (2) A
GRICULTURE ; (ii) Policy Developments; 
Domestic Support; paragraph 22, page 98 
 Korea states that 247 hundred million KRW was provided in 2004 as support through the 
W2.1 trillion FTA fund to compensate some fruit producers affected by the Korea-Chile FTA. 
 Question  Could Korea please indicate where this 247 KRW hundred million is notified in G/AG/N/KOR/37 for 
the 2004 year?  
 
Answer 
 Korea notified it as the structural adjustment assist ance provided through investment aids, of green 
box.  WT/TPR/M/204/Add.1 
Page 182  
 
  HONG KONG, CHINA
 
 
Contingency measures 
 (WT/TPR/S/204, page 56, para.73) 
 
Question 
 1. According to the Secretariat Report, Korea amended its anti-dumping legislation in early 
2008 concerning its review process of anti-dum ping duties and calculation method of dumping 
margins. Would Korea provide more details of these amendments?  
 
Answer 
 Please refer to the answer to China 2nd set’s question 2 (contingency measures). 
 
Anti-dumping 
(WT/TPR/S/204, page 58, Chart III.4) 
 Question  2. Note that Korea did not impose any new anti-dumping duty in 2007; yet, 15 new anti-
dumping investigations were initiated in the y ear, which were more than the number of new 
investigations in the preceding three years combin ed.  We would like to know why there was such a 
sharp increase.  Are there any special reasons or f actors, such as changes of government policies, rules 
or practices, that may have led to the significant increase?  Answer  If we look at the number of anti-dumping investigat ions initiated by item, not  by nation, three were 
initiated in 2004, two in 2005, three in 2006, and six in 2007.  
 In the case of anti-dumping investigations into Kr aft paper, the investigation was initiated against five 
countries. Since a number of countries were invo lved in the 2007 anti-dumping investigations 
concerning one item, statistics were artificially exaggerated. Thus, there was actually no sharp 
increase in investigations.  Usually, anti-dumping investigations are initiated following complaints from domestic companies. 
There were no changes in government policies, rules or practices that influenced the application by 
domestic companies.  
 
Banking and finance 
(WT/TPR/S/204, page 115, pa ra. 83; page 117, para. 90) 
 
Question 
 3. According to Korea’s services offers tabled to the WTO, a person may own up to 10% of the stocks of a bank  (up to 4% in case of non-financia l service business entity) and 15% of the stocks of a 
provincial bank without the special authorisation of the relevant authorities, whereas a person can own 
up to 100% of a bank and a provincial bank with the sp ecial authorisation of the relevant authorities.  
Would Korea confirm whether the aforesaid measur es are reflection of Korea’s de facto banking 
regime?  Regarding the special authorisation that needs to be sought from the relevant authorities for 
up to 100% ownership of a bank and a provinc ial bank, would Korea provide details on the  WT/TPR/M/204/Add.1 
 Page 183 
 
 
  authorisation criteria involved, particularly as to  whether they constitute any market access and 
national treatment restrictions?  
Answer 
 
Only the conditions set out in the relevant law are reviewed and there is no consideration on market 
access or national treatment restrictions. 
 
Insurance 
(WT/TPR/S/204, page 118, para. 95)  
Question  4. As stated in the Secretariat’s Report, there are no barriers on foreign entry in respect of the 
insurance sector.  Yet some limitations are found to have been inscribed in Korea’s GATS schedule 
for the sector restricting the establishment of joint ventures as well as recruitment and employment of 
insurance professionals for life and non-life insura nce, reinsurance and retrocession.  Residency 
requirements for top executive personnel are also imposed for the whole sector.  We would be grateful to know whether the afore-mentioned restrictions are actually in place in Korea’s de facto insurance 
regime.  Answer  There are specific qualifications for insurance planner and insurance experts. By obtaining a 
certificate after passing a required exam and completing a designated training course, one can work 
as an insurance expert or do business independently. 
 
Telecommunications 
(WT/TPR/S/204, pages x & xi, para. 21) 
 Question  
5. We note from the Secretariat’s report that  Korea has unilaterally liberalized foreign 
ownership in the telecommunications sector beyond its GATS commitments. We would be grateful if 
Korea could provide more details about th e relevant liberalization measure (s).  
 
Answer 
 
Korea has unilaterally liberalized foreign ownership  in the telecommunications sector beyond its 
GATS commitments. In 2004, the aggregate ceiling of 80% on indirect foreign investment in facilities-based telecommunication services was eliminated. 
 
Transport services and logistics-related services 
(WT/TPR/S/204, page 122, paras. 116 – 118) 
 Question  6. According to the Secretariat Report, the Ko rean Government provides various financing and 
tax schemes to assist shipping companies.  It also plans to introduce a tonnage tax system and a ship 
investment company system to provide tax incen tives to private investor s in ships for lease to 
shipping companies. Would Korea enlighten us on whether these schemes are provided to both local 
and foreign private investors on a non-discriminatory basis?   WT/TPR/M/204/Add.1 
Page 184  
 
  Answer 
 The tonnage tax system and the ship investment co mpany system are provided to both local and 
foreign private investors on a non-discriminatory basis. However, such tax in centives are designed to 
provide the exemption from corporation tax and in come tax, which are in ternal taxes in Korea. 
Therefore, anyone who is to benefit from such ta x incentives should meet the necessary requirement.  
 As for the tonnage tax system, among ocean-going f reight transport operators of Korean registry 
which pay corporation tax, businesses satisfying certa in requirements can voluntarily apply for the 
tax incentive.  
 
As for the ship investment company system, tax exemption  (up to 300 million KRW of investment 
money) is provided for the private investors' inco me from dividends who pay income tax in Korea.  
 
ECUADOR
 
 
Informe de la Secretaría WT/TPR/S/204 
 
I. EL ENTORNO ECONÓMICO 
1) I NTRODUCCIÓN  
 
En el párrafo 2 se mencionan algunos factores que podr ían poner en peligro el crecimiento potencial 
de Corea a largo plazo, como son la contracción de  la base manufacturera coreana, la productividad 
relativamente baja en el sector de servicios, la disp aridad en los ingresos, el envejecimiento de la 
población y la carga fiscal.  
 
¿Qué medidas se están tomando para neutralizar los efectos de estos factores?   
Answer 
 We are working on strategies to boost our economic gr owth potential with the vision of the "Advanced 
First Class Nation" since the new administration took office. 
 We will strengthen the role of fiscal policies, fo cus on job creation, and put in place mechanism to 
help stabilization of consumer price and people's livelihood. For example, we established a new tax 
regime for economic revitalization to create jobs that  include a tax cut plan worth 25 trillion won on 
September 1. 
 In addition, we are endeavoring to set up th e base for sustainable economic development through 
deregulation. We will reform regulations on bu siness management with the first and second phase 
business environment enhancement measures. In servi ces, we are also pursuin g deregulation process 
mainly through the first and second phase service industry promotion strategies announced in 2008 to 
develop the service industry into a new growth engine.   
4) P
RINCIPALES ACONTECIMIENTOS EN RELACIÓN CON LA POLÍTICA ESTRUCTURAL  
i) Reforma fiscal 
 2. De acuerdo al párrafo 14,  uno de los objetivos de la reforma fiscal de Corea es aumentar los 
ingresos fiscales ampliando la base imponible.   ¿Cuáles son los mecanismos se están utilizando para aumentar la base imponible?   WT/TPR/M/204/Add.1 
 Page 185 
 
 
  Answer 
 Enhancement of the transparency of the tax sources is  for the fair taxation and advanced tax system. 
It is undertaken in parallel with the red uction of tax burden of small businesses. 
 
It is done through raising the identification of  business incomes, normalization of value-added tax 
transactions, ensuring transparency of tax policy   Raising the identification of business incom es through expanding the transparency of cash 
transactions, expanding the access to financial info rmation, introducing accounts for businesses, 
reinforcing evidence-based taxation  
 Ensuring the transparency of transactions by normalizing transactions of value-added tax  
Enhancing the transparency of tax policy by selecting the target companies for tax investigation on an 
objective basis 
 
7) T
ENDENCIAS Y ESTRUCTURA DE LA INVERSIÓN EXTRANJERA DIRECTA  
 
3. El párrafo 27 destaca la disminución de i nversión extranjera directa de 12.800 millones de 
dólares EE.UU. en 2004 a 11.200 millones de dólares EE.UU. en 2006.  
¿Para el Gobierno de la República de Corea, cuáles serían las causas para esta disminución de la 
inversión extranjera y qué medid as se están tomando para revertirlo? 
 
Answer 
 
The Korean government recognizes that  the decrease in foreign direct in vestment is the result of fewer 
mergers and acquisitions, high oil pr ices, and slower economic growth.  
 This view is shared by UNCTAD, as expressed in  its ‘World Investment Report 2008’ published in 
September this year.  
Korea will enhance its efforts to improve the invest ment environment, both in terms of business and 
living conditions. 
 
8) P
ERSPECTIVAS  
 
4. Según el párrafo 29, el nuevo Gobierno se había propuesto alcanzar el 7 por ciento de crecimiento real anual del PIB, unos ingresos por  habitante de 40.000 dólares EE.UU. y transformar a 
Corea en la séptima economía más gr ande del mundo a más tardar en 2013. 
 ¿A la luz del actual contexto internacional, man tiene el Gobierno estas perspectivas de crecimiento 
económico?  
 
Answer 
 Similarly to other country, Korea is also confronted  by the higher international oil prices, the slower 
global economy and the international financial market  turbulence. The Korean government predicted 
on July 2 that 2008 real annual GDP growth would be nearly 5% (4.7~4.9%).  However, ‘7% real annual GDP growth’ is a medium-to-long term target and vision of the Korean economy.  The Korean economy has been  stagnant in a low growth due to the low level of investment  WT/TPR/M/204/Add.1 
Page 186  
 
  for the past 10 years.  Unlike major advanced countri es, the growth rate of fixed capital has been 
lower than the growth rate of real GDP. 
 
Growth rates of key variables in some major countries and Kore a during the period that per cap ita GDP increased from US$10 thou sand 
to US$20 thousand  (%) 
  US 
 (78~87) UK 
 (87~95) JAPAN 
 (84~97) SINGAPORE 
 (89~93) KOREA 
 (95~07) 
GDP 3.2 2.3 3.8 8.9 4.9 
Fixed capital 3.8 3.1 5.7 12.3 2.6 
Dometic consumption 3.3 2.8 3.5 8.0 3.6 
Years taken to reach US$ 20 thousand per capita GDP from US$ 10 thousand 10 9 14 5 13 
 
The Korean government continues to enhance th e growth potential of our economy through 
continuous investment facilitation and effort s to improve productivities including tax cuts, 
deregulation, improving business envir onment and expanding R&D investment.   
 
II. RÉGIMEN DE POLÍTICA COMERCIAL: MARCO Y OBJETIVOS 
 5. El párrafo 58 se refiere a la  Oficina del Me diador en materia de Inversiones Extranjeras. 
 ¿Podría proporcionar mayores detalles respecto de la estructura, funciones y competencias de esta oficina?   Answer  The Foreign Investment Ombudsman, a non-profit organization within Invest Korea, has been 
improving the investment climate and assisting forei gn-invested firms to ensu re success by resolving 
difficulties foreign investors face in regard to their business and living conditions. 
 
The Ombudsman collects information relating to difficulties of foreign-invested firms, provides 
measures to improve the system for foreign invest ment and encourages the related administrative 
agencies to implement such measures, all of wh ich is in accordance with Article 24-4 of the 
Enforcement Decree of the Foreign Investment Promotion Act.   
To this end, the Investment Aftercare Team, which cons ists of seven private sector specialists in areas 
such as construction, finance, tax, labor, IT , accounting, law and logistics; and four KOTRA 
employees, is now in operation within the Korea Trade Promotion Agency under direct supervision of 
the Ombudsman.  It sends so-called "Home Doctors" to foreign-invest ed firms to give counseling on management and to 
listen to their difficulties and suggestions. It provides general counseling on overall corporate 
management and holds consultation meetings and presentations for each industrial area. And it 
makes requests to government agencies to impr ove cooperation in administrative affairs. 
 Every quarter, the situation regarding the resolution of complaints and difficulties of foreign-invested 
firms is reported to the Mini ster of Knowledge Economy.  
 In order to resolve difficulties of foreign-invest ed firms, the Ombudsman makes a request for 
cooperation among related government agencies. 
  WT/TPR/M/204/Add.1 
 Page 187 
 
 
  III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
1) I NTRODUCCIÓN  
 
6. El párrafo 5 indica que se mantienen subvenc iones directas a la exportación para reducir 
costos de comercialización de ciertos productos agrícolas. 
 
¿Cuáles son esos productos agrícolas?  
Answer 
 
In Korea, export subsidies are provided to fru its, flowers, Kimchi, vegetables, livestock and Ginseng 
in consistent with Article 9.4 of AoA. Please go to G/AG/N/KOR/36 for detailed information.   
 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
i) Procedimientos aduaneros 
 
7. El párrafo 18 se refiere al Centro de De nuncia de Irregularidades Aduaneras y el Centro 
Electrónico de Denuncias de Corrupción y al Mediador de Aduanas.  ¿Podría proporcionar mayores detalles respecto de la estructura, funciones y competencias de estas dos oficinas? 
 
Answer 
 1) Customs Irregularities Reporting Centre  and the Cyber Corruption Report Centre  
 
(1) Operation 
The Cyber Corruption Report Center is operated on  the website of the Korea Customs Service.  
 The Customs Irregularities Reporting Centre is est ablished at the Korea Customs Service and its 
main customs office.  
(2) Types of Reports 
  - corruption report: report when asked for bribery   - prevention of corruption: self-report when received bribery  - internal report: report internal corruption 
 
(3) Methods of Reporting   - Cyber (Internet) reporting, on-site, mail, telephone, fax reporting  (4) Process 
 
 - Auditing officials at the Korea Custom s Service and its main customs office accept 
the reports and proceed. 
 - Processed cases at the main customs office are reported to the Korea Customs 
Service on a monthly basis. 
 
(5) Remuneration   - less than five times of the bribed amount, less than 10% of the fined amount  - less than 10 million KRW at the most WT/TPR/M/204/Add.1 
Page 188  
 
  2) KCS Ombudsman 
 (1) Purpose  KCS Ombudsman was introduced to provide one-st op service for natural person, domestic and 
foreign investment companies to swiftly solve their difficulties. It is located in Seoul Customs, which 
is in Seoul, where many head-offices of foreign co mpanies or foreign investment companies are at. 
 (2) Organization and Qualification  
KCS Ombudsman’s member is appointed by the Commissioner of KCS among the third-class and 
above government officers, lawyers, and the recommended candidates from major citizens group. 
 The appointment term is two years, and this can be extended if necessary.  
(3) Role and Authority of KCS Ombudsman 
  - Investigate, manage civil petitions through customs ombudsman and deliver the 
results to the commissioner of KCS 
 - Recommend the director of customs to take corrective measures, to improve systems  - If necessary, attend executives’meeting or meetings related to major policies 
 - If necessary to conduct civil affairs administration, directly propose to the 
commissioner of KCS 
 (4) Scope of Service  
 - Contact point for civil application related to custom duties such as clearance 
 - Collect public opinions related to KCS’ management of civil applications and 
recommend solutions 
 - Consult various legal questions, difficulti es, worries related to civil application and 
companies related to customs clearance 
 - Consult or visit companies related to customs clearance to accept difficulties 
 - domestic and international case study, r ecommend amendments of relevant laws and 
systems  
 - Attend and publicize forums on improving companies (including foreign companies)’ 
business/life environment 
 
(5) New establishment of Customs Ombudsman 
 Exclusively responsible to investigate, ma nage civil petitions submitted to KCS ombudsman 
  - appoint 1 ombudsman in each customs all over the nation (30 customs)   - Role 
 
 1) field investigation, data collection, r ecommend appropriate direction for investigation 
 2) Home Doctor of civil and competent companies on difficulties and recommendations  3) Assist KCS Ombudsman by visiting sites of companies, and conducting actual survey 
 iii) Aranceles c) Aranceles "flexibles" 
 
8. El párrafo 36 hace referencia a los aranceles "flexibles".  WT/TPR/M/204/Add.1 
 Page 189 
 
 
  ¿Podría profundizar en cuanto a los  mecanismos  y fundamentos mediante  los cuales este sistema 
opera?   
Answer 
 
Please refer to the answer to Switzerland’s question (Flexible tariffs).  
i) Contingentes arancelarios 
a) Contingentes arancelarios agrícolas 
 9. En el párrafo 58 se afirma que el importante porcentaje de contingentes arancelarios no 
utilizados para algunos productos, a un siendo los derechos dentro del contingente relativamente bajos, 
indica que su administración y asignación, entre otros factores, pueden estar restringiendo las importaciones.   
¿Para el Gobierno de la República de Corea, cuál es serían las medidas prácticas que permitirían una 
mejor utilización de los c ontingentes arancelarios? 
 
Answer 
 Tariff quota fill rate is independe nt from which tariff quota admin istration methods a government 
takes. Improving transparency and faithful complia nce with Agreement of Agriculture will enhance 
quota administration. 
 
ii) Normas y otras prescripciones técnicas 
c) Marcado y etiquetado 
 
10. En el párrafo 106 se mencionan las nor mas sobre etiquetado de los alimentos. 
 ¿Existe una página web en la que esté publicada la  normativa vigente en cuanto al etiquetado de 
alimentos?   Answer  Full text for the notified revision relating to "Labelling Standards for Foods, etc." in Article 10 of the Food Sanitation Act is accessible at the KFDA website  (www.kfda.go.kr).   
Notification of the draft revision with respect to "L abelling Standards for Foods, etc." can be found at 
the "administrative notice" in the "notice board" of the Korean version of KFDA website. For the revised regulations, go to "information board," enter in to "legislation" section, and click "full text of 
notice." Type "Labelling Standards for Foods, etc." in the search box.    Specific explanations on food labelling and nutrition information are available at 
www.foodnara.go.kr. Go to "informatio n board" and details can be found in the "food labelling" 
section  (which provides information on food l abelling system, standards, and labelling illustration) 
and in the "food nutrition" section  (which provid es introductory informatio n, and information on 
nutrition and its labelling).   
The information accessed through electronic means as stated above is provided only in Korean. For 
further information, please contact the KFDA. 
 WT/TPR/M/204/Add.1 
Page 190  
 
  2) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
i) Régimen fiscal b) Impuestos directos 
 
11. De acuerdo al párrafo 138, ciertas categorías de trabajadores extranjeros empleados en Corea 
que están exentos del impuesto sobre la renta. 
 ¿Cuáles son esas categorías de trabajadores extranjeros? 
 
Answer 
 
The following foreign workers are exe mpt from income tax for the five years since the first day  
(before December 31, 2009) of employment.    1) Contract to introduce engineering t echnologies  (more than US$ 300 thousands) 
 2) Person who works as a researcher in a specific research institute 
 3) Person who works as a researcher in a government funded research institute such as 
Science and Technology Policy Institute 
 4) Person who has experiences of more than  five years or has a diploma higher than the 
B.A. and experience of more than three yea rs. Those persons work in the following 
area with an employment contract. 
 - technology intensive industry  
 - mining industry  - construction industry  - engineering industry  - logistics industry 
 - market research and opinion research, management consulting, technical inspection 
and analysis, other scientific and technological services, and specialty design 
 5) Person who works as a researcher in a non- profit scientific institute as following.  
 - Must have more than 10 permanent researchers with a degree of higher than B.A. in 
natural science  
 - Must have independent research facilities  
 6) Person who provides labor on an contract of introducing technology according to 
'Foreign Investment Promotion Act'  
 
IV POLÍTICAS COMERCIALES POR SECTORES 
2) A
GRICULTURA  
ii) Evolución normativa 
Ayuda interna 
 
12. Según el párrafo 24, se adoptaron varias medidas para aumentar los ingresos no agrícolas fomentando el agroturismo.   
¿Cuáles son las medidas específicas que se tomaron pa ra fomentar el agroturismo y qué resultados se 
han obtenido con su implementación?   
Answer 
 
The government has provided various supports such as followings. 
  - Offer assistance for building experience and convenient facilities, improve village 
landscape, and provide consulting services  
 - Provide administrative support for vitalizing agri-tourism   WT/TPR/M/204/Add.1 
 Page 191 
 
 
    - Institutional support (Enacting the Act on Facilitating Exchange between 
Urban and Rural Areas), Support for Expert consultation, Support for buying insurance, Education/Training for capacity-building, etc.  
 - Encourage urban residents to visit ru ral communities through promotion and 
marketing methods.  
 
Main results from agri-tourism are as followings  - Greater vitality of rural communities due to the participation of elderly people in 
agri-tourism experience activities and job creation for residents  
 - Growing number of visitors is growing,  so exchange activities of urban and rural 
residents  
 - Enhanced life quality for residents through the improvement of village environment 
such as landscape and parking lots.  
 
EUROPEAN COMMUNITIES 
 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
 
WTO Secretariat's report, page 30, para. 42  
The Report outlines that Korea is pursuing FTAs with some major trading partners on a 'multi-track 
basis to establish and FTA network with large eco nomic blocs and newly emerging countries. It is 
currently negotiating with ASEAN, th e EC, Canada, Mexico, and India.' 
 Question 
 
1. Could Korea further elaborate on how it intends to encourage sustainable development and core labour standards in the context negotiations with third countries?   
Answer 
 
Korea agrees that expansion of free trade must be realized in harmonization with sustainable 
development. In this regard, Korea would like to in clude labour issues as an integral part of its FTAs 
in order to contribute to the promotion of sust ainable development in trade.  In the Korea-U.S. FTA, 
Korea addressed the trade-related labour i ssues in its FTAs for the first time.  
 
Korea seeks to cover trade-related labour matters only and guarantee that breach of the agreement 
will not provoke trade retaliation in its FTA negot iations.  Regarding core labour standards in 
Korea's FTAs, Korea reaffirms its obligations as a member of ILO, including its commitments under 
the 1998 ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up.  
 
WTO Secretariat's report, page 26, para. 29 
 
The report indicates that an ASEAN-Korea FTA on goods was signed in August 2006 and 'entered into force on 1 June 2007 for Korea, Singapore, and Malaysia'. The EC notes that Korea has made an 
early announcement of the ongoing negotiations  of this Agreement, as established by the 
Transparency Mechanism.  
 
Question  2. Could Korea indicate when it intends to notif y to WTO the bilateral agreements which are 
already in force?  WT/TPR/M/204/Add.1 
Page 192  
 
  Answer 
 Except for the Korea-ASEAN FTA  (Trade in Goods),  all FTAs in force to which Korea is a Party 
have already been  notified to the WTO.  
With respect to the Korea-ASEAN FTA  (Trade in G oods), Korea wishes to notify it after the Protocol 
on the Accession of Thailand to the Korean-ASEAN FTA is signed.  The specific time of the planned 
notification will be discussed at the upcoming Korea -ASEAN Trade Negotiating Committee to be held 
this October.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ix) Standards and other requirements 
 
WTO Secretariat's Report, page 63, para. 96 
 
The New Excellent Product  (NEP) certification system provides government support and preferential treatment in Government procurement for produc ts manufactured with new technologies developed 
first in Korea or with innovative technologies improved from existing technologies.  Question 
 
3. Could Korea confirm whether the NEP certifica tion can be granted to a product incorporating 
technologies first developed outside Korea?   
Answer 
 
Please refer to the answer to the question of the United States  (government procurement). 
 
Question  4. Does government support affect only the research  phase or also to the commercialization of a 
product?  
 
Answer 
 KATS (Korean Agency for Technology & Standards ) certifies NEP in the initial commercializing 
phase by providing information or consulting.  
Question  5. In what way does Korea grant preferential treatment in government procurement to NEP-
certified products? 
 
Answer 
 NEP-certified products acquired by small and medium enterprises are granted an additional point in 
competitive tendering between SMEs  for government procurement. 
  WT/TPR/M/204/Add.1 
 Page 193 
 
 
  WTO Secretariat's Report, page 64, para. 101 
 The report notes that Korea is a member of FAO/WHO Codex Alimentarius Commission  (Codex), 
World Organisation for Animal Health  (OIE) a nd FAO International Plant Convention  (IPPC) and 
that it applies animal and plant quarantine requi rements based on these international standards.  
 
Question  6. Could Korea confirm whether the level of accepta ble risk to Korea is in this context defined 
according to scientific evidence and protocols in ternationally accepted taking into account the 
objective of minimizing negative trade effects?  
 
Answer 
 WTO members comply with recognized international pr otocols in order to protect their public health 
and veterinary and phytosanitary health. However, th ey can establish proper standards by conducting 
risk analysis based on protection levels deemed appropriate for their countries.   Korea places the first priority on public hea lth protection and carries out import risk analysis on 
whether to prevent inflows of contagious animal di seases in compliance with  scientific evidence and 
internationally recognized protocols.  
 
Question  7. Are scientific criteria internationally accepted used to regionalise measures to protect animal 
health?  
 
Answer 
 Korea considers international standards and scientific  evidences in conducting import risk analysis to 
determine whether to recognize regionalization with regard to contagious animal diseases.  
 Question 
 8. Are scientific criteria internationally accepted used  to consider a country free of a plague or a 
plant disease, after having been declared a risk area?   Answer  While respecting internationally accepted crit eria, Korea conducts import risk analysis in an 
independent manner.  
 
WTO Secretariat's Report, page 65, para. 104 
 
The report indicates that Korea bans imports of liv e cattle, sheep and goats and certain products from 
countries where BSE is known to occur, including products from the EC. The World Organization for 
Animal Health  (OIE) Code provides for conditions under which beef and beef products can be safely 
traded from all countries. Most EC countries have now been classified by OIE as countries with 
"negligible risk" or "controlled risk". However, Ko rea allows beef imports from a country with the 
OIE status "controlled risk".   WT/TPR/M/204/Add.1 
Page 194  
 
  Question 
 9. When would Korea allow the imports of beef  and other products from the EC and thus apply 
the same treatment as to other WTO members?   Answer  The Korean government basically respects OIE guilde lines with regard to BSE, but will exercise its 
rights to independently conduct import risk analysis at the same time.   
As for beef import from EU, Korea will proceed import risk analysis for countries in order of 
requests.  However, Korean consumers have concerns over the case s of BSE in EU. Therefore, it will take time 
and efforts to address their concerns.  
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iii) Price controls and monitoring 
 
WTO Secretariat's Report, page 77, para. 155  
The EC notes that the Korean Customs Services ha s in May introduced a new policy of monitoring 
import prices. The EC understands that  this policy is stated to be pa rt of measures directed against 
inflationary pressures, and only targets imported products. The  Question 
 
10. Does Korea believe that imported retail produc ts contribute disproportionately to inflationary 
pressures, when compared to domestic products?   
Answer 
 
Korea is not of the view that imported produc ts contribute disproportionately to inflationary 
pressures, compared to domestic products.  However, Korea views that over-valuation of raw prices of imported products is one of the factors 
causing inflation.  
 
IV. TRADE POLICIES BY SECTOR 
(5) M
ANUFACTURING  
(i) Automobiles 
 
WTO Secretariat's Report, pages 109, para. 66 
 
The EC notes that in the framework of the revision of corporate and income tax law, it is planned to 
limit the expenses for automobiles to 30 million won.   Question 
 
11. Could Korea explain its intentions with regard  to a revision of the corporate and income tax 
law, and specifically with regard to the de ductibility of expenses for the purchases of cars?  
  WT/TPR/M/204/Add.1 
 Page 195 
 
 
  Answer 
 Current corporate and income tax law does not re gulate the limit on the deductible expenses for 
buying automobiles up to 30 million won. Tax reform plan 2008 does not cover such a limit, either.   
 
EUROPEAN COMMUNITIES (SECOND SET
) 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(6) T RADE AGREEMENTS AND ARRANGEMENTS .  
 Question 
 WTO Secretariat's report, page 31, para.45 
 
The report indicates that Korea "expanded preferential duty-free access on selected imports of 3,790 (six-digit HS2007) tariff items from 50 UN-defined least developed countries". 
 Could Korea indicate the percentage of imports currently covered under this duty-free scheme for 
LDCs?   What is the proportion of covered imports in relation to total imports from LDCs?  
 
Which are the main beneficiary countries, in terms of largest volume and utilization rate?  
 Could the Parties confirm whether there are any TRQ in place?   
Does Korea intend to take further steps to comply with Annex F of Hong Kong Declaration, requiring 
all developed and developing countries in a position to do so to provide DFQF of at least 97% of tariff 
lines? If not, why?   
Answer 
 
In Korea, 3,790 tariff items are covered under the duty-free scheme fo r LDCs from January 1, 2008.  
 Of the total imports of 2.07 billion US dollar based  on imports of 2007, the items covered by the 
scheme account for 830 million US dollar on import  basis and (or about 40% of the total) and 
690 million US dollar on the basis of import volume  to which actually LDC preferences are applied 
(or about 34% of the total). 
 In terms of volume, Zambia is the greatest be neficiary of LDC preferences (73%) and, in terms of 
utilization rate, Zambia is also  the greatest beneficiary (98 
 Korea doesn’t use TRQ in the LDC preferential duty scheme. 
Korea intends to gradually expand DFQF for LDCs. 
Ministerial Declaration is requiring only those developing countries declaring themselves in a position to do so to provide DFQF.  WT/TPR/M/204/Add.1 
Page 196  
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs procedures  Question 
 WTO Secretariat's Report, page 41, para. 14 
 
The report indicates that most imports (about 80%) are cleared after being taken into a bonded area; 
the average clearance times from port entry to release from a bonded warehouse was 3.45 days in 
2007.  
 Could Korea confirm whether the same number of  warehouses is available for both importers and 
domestic manufacturers, and that equal treat ment is ensured between these operators?  
 Answer 
 
This is not related to Customs but it is the matter between warehousemen and importers. 
 EUROPEAN COMMUNITIES – FOLLOW UP
 
 The EC would like to thank the Delegation of Ko rea for written replies received on Wednesday and 
for today's presentation, which has addressed many i ssues raised by Members.  In the light of the 
written replies, we would like to raise some follo w up questions, concerning government procurement 
and price controls.  1) Government procurement 
 
Follow up to question 3 
 
Could Korea confirm that there is no other use of  the NEP certificates in government procurement 
except for the procurement set aside for the SMEs ? For example, could Korea confirm whether a 
procuring entity can require the NEP certificate as a proof of an innovative product/service?  
 
Answer 
 
Korea would like to stress that an additional point  for NEP-certified products acquired by small and 
medium enterprise, is applicable to domestic te ndering, but not to international tendering. A 
procuring entity does not require the NEP certific ates as a proof of an innovative product/service. 
 
2) Prices controls and monitoring  
 
Follow up to question 10 
 
Could Korea elaborate more about the source of da ta of import prices it is monitoring and disclosing 
to public?   Could Korea also explain the methodology of the exercise, and the criteria for the choice of products? 
 
Answer 
 
 - 90 imported goods that aff ect domestic consumer price  WT/TPR/M/204/Add.1 
 Page 197 
 
 
   - The Korean Customs Services make public quarterly the lowest, highest and average 
import price of 90 imported goods t hat affect domestic consumer price. 
 Those are selected from goods which compose cons umer price index(489 items) or import price index 
(234 items), that were actually imported in the fi rst quarter of 2008 and can be statistically selected 
as consumer products in the HS system.  
JAPAN
 
 
The Secretariat Report (WT/TPR/S/204) 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreement 
 Question 1 : page 30, paragraph 42 
 (The Government Report  (WT/TRP/G/204) III.  TRADE POLICY DEVELOPMENTS: 2004-2008  
(3) FREE TRADE AGREEMENTS  (page 18-21))  According to the Secretariat report, Korea is pursu ing negotiations with other major trading partners 
on a "multi-track" basis to establish an FTA networ k with large economic blocs and newly emerging 
markets.  (1) Please indicate Korea’s view on whether Korea will continue FTA negotiations on 
aforementioned "multi-track" basis. 
 
(2) Please explain how the Korean Government d eals with FTA negotiations with other trading 
partners such as Canada, ASEAN, EC, Mexico , India, Japan, China, Mercosur, Russia, 
Turkey and Peru. What priority does Korea give the above-mentioned countries? 
 
Answer to (1) 
 
Korea is trying to build a 'global FTA Network' t hat connects Korea with her major trading partners. 
To achieve that goal, Korea needs to continue FT A negotiations on a "multi -track" basis for some 
time.  
Answer to (2) 
 Korea has been engaged in FTA negotiations with  Canada, ASEAN (investment), EC, Mexico and 
India. Korea is also discussing with Japan o ver the possibility of resuming the bilateral FTA 
negotiations that were suspe nded at the end of 2004. 
 
In the meantime, in-depth examinations over the possibility of FTA negotiations are underway with 
those countries such as China, Mercosur, Russia, Turkey and Peru. 
 WT/TPR/M/204/Add.1 
Page 198  
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs 
 
Question 2: pages 49-50, paragraphs 36-42 
 
The Secretariat report explains that Korea applies temporary higher MFN duties  (termed as flexible 
tariffs) than those set at the customs tariff schedule.  Please indicate the applied period of flexible tariffs , as well as, if any, the restriction on the longest 
applied period of flexible tariffs. 
 
Answer 
 Flexible tariffs such as autonomous tariff quotas and adjustment tariffs are levied on a yearly basis  
(or six months if necessary).  
 Though there is no limit on the period when flexible tariffs are levied, Korea has converted flexible 
tariffs into general tariffs if the flexible tar iffs have been imposed on goods for a long time. 
 
Question 3: pages 49-50, paragraphs 36-42 
 
According to the Secretariat report, adjustment duti es are set annually by the Ministry of Strategy and 
Finances  (MOSF). The Customs and Tariff Delib eration Committee considers MOSF’s proposals, 
and if approved by the State Council, adjustment duties are implemented by Presidential decree.   
(1) In the aforementioned procedure, please e xplain the process for the Government to ask 
opinions from the third parties on the application of the adjustment duties to specific products. 
 (2) How does the Government of Korea publish its final decision on the adjustment duties? 
 
Answer to (1) 
 
During the decision making process, the Korean go vernment receives opinions from importers of 
products subject to adjustment duties, domestic producers in competition with the importers and 
government organizations in charge  of supervising the products.  
 
Answer to  (2) 
 The final decision is published in an official gaze tte and is announced and takes into effect through a 
presidential decree. 
 
IV. TRADE POLICIES BY SECTOR 
(1) I
NTRODUCTION  
 
Question 4: page 91, paragraph 5  The Secretariat report explains, ‘despite some d ecline, state-ownership persists in financial, 
telecommunications, and transport services’. 
 Although the Japanese Government understands that  the Korean Government does not have any 
obligation to possess the shares of KT and does not  have any actual possession of them, please 
elaborate on the aforementioned description in the Secretariat report.   WT/TPR/M/204/Add.1 
 Page 199 
 
 
  Answer 
 Korean telecommunication market including KT  (J une 2002) is completely privatized and the 
government does not possess any shares of telecommunication operators. 
 
(2) A
GRICULTURE  
(iii) Selected activities 
 
Question 5: page 99, paragraph 28  
The Secretariat report explains that a new dire ct income support mechan ism for rice producers 
consisting of a fixed and a vari able payments system has applied since the 2005/06 crop year.  
 (1) Please indicate the requirements for producers and farmlands to which this direct income 
support is applied. 
 
(2) Please provide a specific understanding of Korea on how this mechanism is dealt with in the 
notification of Aggregate Measurement of S upport  (AMS) based on the WTO Agreement on 
Agriculture. In case that this m echanism is notified as green box po licies, what sort of criteria 
in Annex 2 of the Agreement on Agricult ure is applied to this mechanism? 
 
(3) Regarding products other than rice, please i ndicate whether Korea has implemented or has 
plans to implement any direct payment mechanis ms or similar mechanisms. Japan would also 
like to know whether or not Korea implements any similar mechanism to  the direct income 
support mechanism, which does not specify products to be supported. 
 Answer to (1)  The farmland had been used fo r rice cultivation (rice, lotus root, dropwort and sedge) from 
Jan 1 1998 to Dec 31 2000. And the farmland is re quired to maintain the function and shape of 
current farmland for direct income payment.  To be eligible for variable direct payment, the farmland 
should satisfy the criteria requirements of  agro-chemical and fertilizer usage.    
 
Answer to (2)  Korea plans to notify the fixed direct payment for rice income as Green Bo x as it falls into the 
category of decoupled income support set out in Annex 2.6 of the Agricu lture Agreement while 
reporting the variable direct payment for rice income as AMS.  
 Answer to (3)  Regardless of whether the products to be supporte d are specified or not, direct income payment 
system consisting of direct /variable direct payme nts are not being implem ented now except one for 
rice. There is no plan to introduce similar systems either.  
(6) S
ERVICES  
(v) Telecommunications 
 Question 6: page 119, paragraph 101 
 In 2008, the Ministry of Information and Communications (MIC) and the Korea Broadcasting Commission  (KBC) were merged into the KCC to form a completely independent single regulatory 
entity, under the President's Office. WT/TPR/M/204/Add.1 
Page 200  
 
  Could Korea explain in what way the function of  dispute settlement has been taken over from the 
former KCC to the newly established KCC  (for in stance, has a certain kind of committee been 
established inside the new KCC)?   
Answer  
 
The function of dispute settlement has been taken  over to Consumer and Network Bureau inside the 
newly established KCC. 
 
Question 7: page 119, paragraph 103 
 
According to the Secretariat report, foreign investme nt in the sector is subject to a 49% ceiling, and 
under the Telecommunications Business Act, the KCC can prohibit a foreign shareholder from becoming the largest shareholder in KT. However, ow ing to an exception, the largest shareholder in 
KT is presently foreign. 
 
Please provide a specific case to which the exception is applied.   
Answer  
 A foreign government or a foreigner may not be the la rgest shareholder of KT. However, it is allowed 
exceptionally when a foreign government or a foreigner holds less than 5% of the total voting shares. 
KT's current major sharehol ders are foreigns through a grandfathering measure. 
 
Question 8: page 119, paragraph 103  
Japan understands that as a result of the agreemen t of Korea-U.S. FTA negotiations, the foreign 
indirect investment to basic telecommunication carriers is to be allowed up to 100%.  Please explain the current situation regarding the amendment of Telecommunications Business Law.  
 
Answer  
 
Telecommunications Business Law is planned to be  amended after completing the process of the 
ratification of KORUS FTA. 
 
Question 9: page 119, paragraph 103 
 
As for the restriction of foreign cap ital participation, Japan is of the view that such a restriction should 
only apply to specific carrier s such as dominant carriers. 
 Japan would like to be informed of the reas on why such restriction is applied to all 
telecommunications carriers equally in Korea.  
 
Answer  
 Although there are differences in the restriction of foreign capital participation across countries 
depending on their charateristics, most countries do not apply the restrictions only to specific carriers 
such as dominant carriers.  
 The types of market access restric tions may vary according to thei r specialities  (e.g. the government 
shares of telecommunications carriers, nationality requirement of board members). 
  WT/TPR/M/204/Add.1 
 Page 201 
 
 
  Question 10: page 120, paragraph 104 
 Please provide information on the scheme of handset  subsidies, together with the details of 
terminating the subsidies regulation in March 2008.  
Answer  
 
The prohibition of handset subsidies was terminat ed in March 2008. Provision of subsidies on 
handsets are up to each service providers. 
 
Question 11: page 120, paragraph 106 
 
The Secretariat report explains ‘since July 2007, price discounts are permissible on sales of bundled products, such as local telephone, high-speed internet, and mobile services’. Japan  is of the view that 
such price discounts on sales of bundled products con cerns us to result in decreased competition, in 
case that specific carriers including dominant carriers make use of this system in order to shut other 
carriers out of the market.  
 (1) Please explain the outline of this system, al so explain whether or not dominant carriers can 
make use of this system. 
 (2) Please explain the details of the fact that price discounts became permissible on sales of 
bundled products. 
 
Answer to (1) 
 Price discounts on sales of bundled products have been permissible except for dominant carriers. 
Since July 2007, price discounts on sales of bundled products has also been permissible to dominant 
carriers.   Answer to (2)  Price discounts became permissible on sales of bundl ed products to dominant carriers in order to 
create new profit models in the telecommunicati on market and reduce the telecommunication costs to 
the consumers.  However, a safety scheme for fair competition is established to review the reasonableness of the 
discount rates by the dominant carriers and to ensure equal access to the essential facilities in order 
to prevent any negative effects such as the transf er of the dominant power of the dominant carriers.  
 
Question 12: page 120, paragraph 107  The Secretariat report states, ‘facilities-based prov iders are required to contribute 0.5% of the 
previous year's total revenues for the R&D expend iture fund, while dominant providers are required 
to contribute 0.75%’, and also explains that th e R&D contribution  (R&D expenditure fund) is 
managed by the Ministry of Knowledge Economy.   (1) Please provide information on how this fund h as been spent, including fields of research, 
achievement and outcome. 
 
(2) Japan would like to know whether the Ministry  of Knowledge Economy is solely entrusted to 
use this fund, or whether there is any mech anism by which opinions from telecommunications 
carriers are reflected to the usage of the fund. WT/TPR/M/204/Add.1 
Page 202  
 
  Answer to (1) 
 IT Promotion Fund (R&D expenditure fund) supports  IT fundamental technology or wide variety of 
technological sectors which will contribute to build  or strengthen socioeconomic infrastructures. 
Answer to (2) 
 
Ministry of Knowledge Economy is using a large po rtion of the fund; however, the fund is available 
for other ministries, including the Korea Communications Commission. 
 
Question 13: page 120, paragraph 108 
 
Please provide the latest version of the interconnecti on agreements, highlighting four points such as  
(a) process and procedure for requesting and providi ng services related to interconnection,  (b) cost-
oriented rates,  (c) standard period for providing services, and  (d) terms of validity of interconnection 
agreement.  
 
Answer 
 1) process and procedure for requesting and pr oviding services related to interconnection, 
  - Service providers who wants to request in terconnections request 3 months before the 
wanted date of interconnection and the actual  date of interconnection is determined 
in principle by the wanted date of interconnection of the service providers who requests interconnection.  
  - Operators who receives interconnection re quest from other operators shall make 
agreements within 90 days and notify it to the KCC.  
 2) cost-oriented rates  
Status of rates by operators as of 2007 
(unit : KRW/minute) 
KT SKT KTF LGT 
18.98 32.77 39.60 45.13 
 
3) standard period for providing services, and t erms of validity of interconnection agreement 
  - standard period for providing services, and terms of validity of interconnection 
agreement is until the amendment of the agreement between  operators since 
interconnection agreement is an agreement between operators.  
 
Question 14: page 120, paragraph 108  The Secretariat report says, ‘the KCC changed the interconnection pricing methodology in 2004 by 
implementing interconnection charges based on a long -run incremental cost methodology  (LRIC), the 
new methodology is applicable to interconnecti on of local, long-distance, and mobile services’. 
 (1) Japan would like Korea to explain the details of introducing interconnection charges of 
mobile phone based on a long-run incr emental cost methodology  (LRIC). 
 
(2) Could Korea clarify whether the LRIC is al so applied to interconnection charges of other 
mobile carriers than dominant carrier SKT?  WT/TPR/M/204/Add.1 
 Page 203 
 
 
  Answer to (1) 
 Both the top-down LRIC model and bottom-up LRIC m odel are used to calculate interconnection 
charges.  
The top-down LRIC model is based on the current co st of interconnection-related assets evaluated in 
consideration of the inflation rate  or the current value of the e quivalents and add costs incurred 
thereafter due to increase or decrease of call volume, number of subscribers and time.  
 The bottom-up LRIC model is based on the cost exp ected to be incurred when an operator re-designs 
the most efficient communications networks c onsidering call volume, topographic data and number of 
subscribers.  
 Answer to (2)  LRIC is also applied other mobile carriers such as KTF and LGT. 
 
Question 15: page 121, paragraph 110  According to the Secretariat report, universal se rvice includes provision of subsidized services for 
low-income and disabled customers.  
Please explain the outline of this service.  
 
Answer 
 The accession fees and rates of local calls, long- distance calls, internet services and telephone 
directory services are reduced  to low income groups, the disabled and veterans. 
  - There are some differences in rate discounts according to services and groups who 
are benefited. 
 
Question 16: page 121, paragraph 111-112 
 
In relation to the convergence between telecommuni cations services and broadcasting services, Act of 
internet and multimedia broadcasting business  (IPTV Ac t) was approved at the end of the last year in 
Korea.   
 (1) Please provide a specific explanation on the current situation and future direction of 
implementing measures to promote this industry, including fair competition among contents, as well as measures to develop contents business. These measures are stipulated in article 19 of IPTV Act. 
  (2) Please explain the trend and current situ ation regarding the standardization of the 
IPTV related technologies in Korea. 
 
Answer to (1) 
 The IPTV Act requires an obligation to provide majo r programs of an IPTV operator to other IPTV 
operators on a fair and reasonable price without discrimi nation in order to protect consumer benefits 
and fair competition.  WT/TPR/M/204/Add.1 
Page 204  
 
  In addition, access to the contents of each program me is ensured according to the Article 76 of the 
Broadcasting Act.   Answer to (2)  
Discussions on the standardization of the IPTV rel ated technologies are currently in progress. 
(Question 17: page 121, paragraph 111-112) 
 Please give us a specific explanation on the current s ituation and future direction of how to deal with 
intellectual property rights such as copy rights of co ntents which are provided to internet multimedia 
and are broadcasted through the internet multimedia.  
 
Answer 
 The current Copyright Law is applicable to the c opyright matters regarding contents transmitted on 
the Internet or broadcasted through Internet multimedia  such as IP TV and it will continue to be so in 
the future.  
 
(vi) Transport 
 
Question 18: page 122, paragraph 117 
 
According to the Secretariat report, the Governme nt plans to introduce a tonnage tax system.  
 (1) Although Japan understands that Korea has alr eady introduced a tonnage tax system in 2005, 
please clarify the description of the Secretariat report. 
 
(2) If Korea has already introduced a tonnage tax system, Japan would like to know how this tax 
system has had influence on maritime transpor t business in Korea  (for instance, increasing 
the number of ships of Korean registry and number of Korean crew). 
 
Answer 
 
The Korean Government has implemented the Tonnage Tax system since 2005.  
 The tax system provided about 80 businesses with th e corporation tax cut worth of 689.6 billion won 
between 2005 and 2007. Accordingly, mar itime transport businesses have had more room for 
investment, and thereby increasing the number of Korean flagged ocean-going vessels. 
 Increased number of registered ocean-going f reight transport operators : 73 in late 2004 → 150 in 
late 2007  Increased number of Korean flagged ocean-going vessels : 491 in late 2004  (12,611GT) → 718 in 
late 2007  (18,040GT)  
Question 19: page 122, paragraph 117  According to the Secretariat report, the Governme nt plans to introduce a ship investment company 
system designed to provide tax incentives to pr ivate investors in ships for lease to shipping 
companies.   Japan would like to have a detailed explanation on these tax incentives.   WT/TPR/M/204/Add.1 
 Page 205 
 
 
  Answer 
 The Korean Government enacted the Ship Investment  Company Act in 2002 to form an investment 
fund with private investments in ships.  
Since 2004, 72 funds have received approvals and the reby supporting to secure 98 ships  (total value 
of 4.8 trillion won). Tax exemption  (up to 300 million won) is prov ided for the private investors' 
income from dividends who invest in the ship investment company  
 
Question 20: page 122, paragraph 117 
 
The Secretariat report describes that most maritime  auxiliary services, including tug services, freight 
forwarding, and maintenance and repair services are provided by the private sector.  As for Maritime freight forwarding services and Mari time agency services, Japan would like Korea to 
explain the details of reservations on mode 3 of  Korea’s specific commitment in GATS which is 
based on the Korean Commercial Law.   
Answer 
 The Korean Commercial Act classifies the type of  company into four: partnership companies  
(Hapmyong-hwesa); limited partnership companies  (Hapja-hwesa); stock companies  (Joosik-
hwesa); and limited liability companies  (yuhan-hwesa).  Foreign businesses can provide services in Korea by est ablishing one of the aforementioned types of 
companies.  
 
JAPAN – FOLLOW UP
 
 
The Secretariat report explains that Korea applies temporary higher MFN duties (termed as flexible 
tariffs) than those set at the customs tariff sch edule. Thanking for the responses from Korea on 8th, 
Japan would like Korea to provide more specific information to the follow-up questions, as follows. 
 
(Korea’s response to the Japan’s written question 2) 
 According to the Koreas response on 8
th, Korea has converted flexible tari ffs into general tariffs if the 
flexible tariffs have been imposed on goods for a long time.  
 (1) Please indicate more specific case in which Kor ea converts flexible tariffs into general tariffs. 
 
(2) Please explain specific case in which the flexib le tariffs have been imposed on goods ‘for a 
long time’. Japan also would like to understand th e reason why the flexible tariffs have been 
imposed on goods ‘for a long time’ 
 
Answer to (1) & (2) 
 
Korea converted flexible tariffs on 405 10-digit lines into basic tariffs in 2006. Those 405 tariff lines 
include peas, sheet (for manufacturing plywood), coba lt oxides, artificial graphite and separator (for 
manufacturing secondary battery).  Flexible tariffs are imposed when the surge in impo rts of certain goods or in price of raw materials 
are feared to disrupt the domestic and foreign ma rket. The tariffs are imposed on a yearly basis. For WT/TPR/M/204/Add.1 
Page 206  
 
  several goods, however, flexible tariffs remain unchange d for a long time as conditions for flexible 
tariffs to be levied have not been changed. 
 
(Korea’s response to the Japan’s written question 3 (1)) 
 
As Korea’s response on 8
th does response to a part of the Japan’s question (it just indicates names of 
third parties), please indicate more specific process fo r the government to hear opinions from the third 
parties. 
 
Answer 
 
First, the government collects opinions from impor ters and domestic manufacturers of goods at issue 
before it imposes adjustment tariffs on those goods.  Second, Customs Deliberation Committee hears opi nions from the third parties. The Committee 
consists of government officials in charge of ta riff affairs, economic organizations, the academia and 
private experts.  
 Third, after the draft decision to impose adjustm ent tariffs is published through official gazettes, 
ordinary people can express their opinions about the decision during the period of pre-announcement of legislation.  
 
COLOMBIA
 
 
PREGUNTAS 
 II. REGIMEN DE POLITICA COMERCIAL: MARCO Y OBJETIVOS 
7) R
EGIMEN DE INVERSIONES EXTRANJERAS .  
 
Question  "49. La Ley de Fomento de las Inversiones Extran jeras  (FIPA) permite todos los tipos de IED, 
incluidos  el establecimiento de nuevas empresas, la compra de acciones de empresas existentes, las 
fusiones y adquisiciones, con un 10 por ciento de  participación extranjera, como mínimo;  y los 
préstamos a cinco años o más de sociedades extranjer as matrices o filiales.   Corea cumple el Código 
de Liberalización de los Movimientos de Capital y el Código de Liberalización de las Operaciones 
Corrientes de Invisibles y el Instrumento de Trato Nacional".  
¿En qué consiste el Código de  Liberalización de las Operaciones Corrientes de Invisibles? 
 
Answer 
 The Code outlines general liberalization principl es; specifies procedures for foreign remittances and 
fund transfers and addresses the obligation to liberali ze agreements between countries involving the 
exchange of services.  
 
Question  "53. Según las autoridades, las concesiones fiscales  pueden ser decisivas en la  captación de IED 
entre países similares, y la mayoría de los bene ficiarios establecidos en Corea indican que tales 
incentivos han facilitado las inversiones extranjeras.   Sin embargo, estos resultados no tienen en 
cuenta si se habrían realizado tales inversiones sin los incentivos.  Todos los incentivos a la inversión  
(con independencia de que beneficien a inversores extranjeros o nacionales) conllevan el riesgo de  WT/TPR/M/204/Add.1 
 Page 207 
 
 
  subvencionar inversiones eficientes, que no necesi tan asistencia y se habrían realizado de todas 
formas  (con las consiguientes ganancias imprev istas para los inversores a expensas de los 
contribuyentes), o peor aún, de hacer rentables al gunas inversiones ineficaces.   Por consiguiente, los 
incentivos fiscales pueden contribuir a una asignación ineficaz de los recursos en Corea.   La 
rentabilidad de los incentivos fiscales es también cuestionable.   Tales incentivos pueden ir en 
detrimento de la contabilidad pública y la transpar encia fiscal, especialmente, como sucede en Corea, 
si no existe información detallada sobre los ingr esos sacrificados a causa de los diversos incentivos 
fiscales o una evaluación sistemática de la eficacia de tales incentivos.  Por consiguiente, es necesario 
prestar atención para que los costos financieros y de eficiencia de los incentivos a la inversión no 
superen sus beneficios declarados.  Las autoridad es indican, inter alia, que los incentivos fiscales se 
otorgan durante un máximo de siete años y que se hacen esfuerzos por asegurar la transparencia del 
sistema de incentivos y por replantear los criteri os para el otorgamiento y la duración de los 
incentivos".  ¿Cuál ha sido el costo fiscal por la aplicación de  las medidas para incentivar las inversiones 
extranjeras?  
 ¿El gobierno asume directamente el detrimento fiscal? O ¿Es trasladado al mercado local?  
Answer 
 
The central and local governments support differen t incentive programs involving tax cuts and 
infrastructure construction.  
 
Question  
"54. La IED no está sujeta a autorización gubernam ental.  Los inversores extranjeros únicamente 
deben realizar una notificación prev ia, que puede cursarse en las oficinas de bancos nacionales o 
extranjeros en Corea, en Invest Korea o cualquier otro centro de comercio del Organismo de Fomento 
del Comercio y la Inversión de Corea  (KOTRA) en el extranjero.   Las sociedades con capital de participación extranjera deben tamb ién registrarse para poder benefici arse de incentivos. No obstante, 
se requiere la aprobación del MKE para realizar i nversiones en 90 sociedades designadas relacionadas 
con la defensa;  entre ellas figuran muchos de los grandes conglomerados de la electrónica y la 
industria, que son también destacados fabricantes de productos no relacionados con la defensa". 
 ¿Qué autoridad está encargada del contro l de las inversiones extranjeras?  
 
¿Qué ente lleva la información estadística sobre IED?  
 ¿Está reglamentado el aporte de información relacionada con IED?  
Answer 
 
The Ministry of Knowledge Economy is in charge of FDI-related policies and statistical information.  
 However, we collect this information for sta tistical purposes, not for screening purposes.  
 
Question 
 
"58. La Oficina del Mediador en materia de Inve rsiones Extranjeras, entidad independiente cuya 
creación corresponde al Presidente con sede en el KOTRA y dotada con personal de Invest Korea, 
tramita las reclamaciones concretas de los inversor es extranjeros establecidos en Corea, y gestiona 
con Invest Korea un Servicio Asiste ncial de Inversiones que dispensa atención individualizada.  Corea WT/TPR/M/204/Add.1 
Page 208  
 
  es miembro del Centro Internacional de Arreglo de Diferencias relativas a Inversiones  (CIADI) y del 
Organismo Multilateral de Garan tía de Inversiones  (OMGI)." 
 ¿Invest Korea es una entidad pública, privada o mixta?   Answer  It is a public company established for th e purpose of carrying out national projects. 
 Invest Korea provides administrative support for foreign investors and FDI.  
 
It provides consultation services and information, promotes investment in Korea, and carries out 
related surveys. It also provides administrati ve services for foreign investors and support for 
start-ups. 
 Question 
 "60. Corea ha firmado acuerdos bilaterales de i nversión (incluidos acuerdos de libre comercio) 
para la protección de IED con 95 países;  82 de e llos están en vigor.  Los inversores extranjeros no 
están sujetos a la doble imposición siempre que su pa ís de origen haya rubr icado un convenio para 
evitar la doble imposición con Corea;  76 países han firmado convenios con Corea, 70 de los cuales 
están en vigor.  Corea prevé ampliar la red de esos convenios bilaterales a países de la Comunidad de 
Estados Independientes, América Latina y África para promover las corrientes transfronterizas de capitales."  ¿Con qué países ha firmado acuerdos  bilaterales de inversión?  
 
¿Cuáles son los objetivos que persi guen con la firma de estos acuerdos? 
 
Answer 
 Korea has signed several investment agreements with  the goal of improving conditions for foreign 
investment by reducing barriers to such investment.  
 As of January 2008, Korea is a signatory to bilateral investment agreements  (including FTAs) for the protection of FDI with 95 countries; among these agreements, 82 are in force and 13 are signed. 
 
  In force (82)  Signed but not in force (13)  
Europe 
 (32) Germany (‘67), UK (’76), France (‘79), Denmark (’88), Hungary 
(‘89), Poland (’90), Russia (‘91), Austria (’91), Italy (‘92), 
Uzbekistan (’92), Lithuania (‘93), Turkey (’94), Spain (‘94), Czech 
(’95), Greece (‘95),Tajikistan (’95) , Finland (‘96), Portugal (’96), 
Kazakhstan (‘96), Latvia (’97), Ukraine (‘97), Sweden (’97), Belarus (‘97), Netherlands (’05), Slovakia (‘06), Albania 
(’06),Croatia (‘06), Bulgaria (’06), Liechtenstein (‘06), Iceland 
(‘06), Switzerland (’06) Belgium-Luxemburg Economic Union (‘06), Romania 
(‘06), Kyrgyzstan (‘07) 
Asia 
 (17) Sri Lanka (‘80), Bangladesh (’88), Malaysia (‘89), Thailand (’89), 
Pakistan (‘90), Mongolia (’91), Indonesia (‘94), India (’96), Laos 
(‘96), Philippines (’96), Cambodi a (‘97), Hong Kong (’97), Japan 
(‘03), Brunei (’03), Vietnam (‘04), Singapore (’06),  China (‘07)   
Middle 
East 
 (10) Egypt (‘97), Qatar (’99), Saudi Arabia  (‘03),Israel (’03), Oman 
(‘04), UAE (’04), Jordan (‘04), Iran (’06), Lebanon (‘06), Kuwait 
(’07)   
Table (cont'd) WT/TPR/M/204/Add.1 
 Page 209 
 
 
    In force (82)  Signed but not in force (13)  
Africa 
 (8) Tunisia (‘75), Senegal (’85), South Africa (‘97), Nigeria  (’99), 
Morocco (‘01), Algeria (’01), Mauritania (‘06), Libya (’07) Tanzania (‘98), Burkina Paso (’04), Democratic Republic 
of the Congo (DRC) (‘05), Republic of the Congo (’06), 
Mauritius (‘07), Gabon (’07), Mozambique (‘07) 
America  (15) Paraguay (‘93), Peru (’94), Argentina (‘96), Bolivia  (’97), 
Nicaragua (‘01), Honduras  (’01), Panama (‘02), El Salvador  
(’02), Mexico (‘02), Guatemala (’02), Costa Rica (‘02), Trinidad 
and Tobago (’03), Chile (‘04), Guyana (’06), Jamaica (’07) Brazil (‘95),Dominica (‘06),USA (07) 
 
III. POLITICAS Y PRACTICAS COMERCIALES, POR MEDIDAS 
2) M EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
i) Procedimientos aduaneros.  
 
Question  "10.  Corea ha continuado la racionalización y m odernización de sus procedimientos aduaneros y ha 
fortalecido la protección en frontera de los derecho de  propiedad intelectual y contra la falsificación 
en el marcado de origen…"   - ¿Podría Corea compartir su experiencia en éste tema y explicar brevemente las 
medidas que ha adopta do para tal efecto? 
 
Answer 
 As a measure to eliminate count erfeit products, a project team wa s organized and special program, 
"A 100- day crackdown on counterfeit goods" was performed. Several campaigns and publicity 
activities were carried out to increase public aw areness of bad effects counterfeit products bring 
about. The Product Recall System for Country-of-Origin Marking Offence was introduced to protect 
consumers from the counterfeit related dam age and to establish the fair trade. 
 
Question  
"11. Solamente los expedidores, agentes de aduanas, asociaciones o empresas pueden hacer 
declaraciones de importación…"    - ¿Cuáles son las razones que se tuvieron en cuenta para no permitir que las personas 
naturales presenten por si mismas una declaración de importación?  
 
Answer 
 In Korea, the owner of goods  (natural persons ) are allowed to present import declarations 
themselves. 
 Question 
 "16. Desde agosto de 2005, el KCS  (Servicio de  Aduanas de Corea) aplica inspecciones aduaneras 
más rigurosas sobre los productos agrícolas… debido al aumento de las importaciones causado por declaraciones de importación subvaloradas..."  
 
 - ¿En que otro tipo de productos, diferentes a los agrícolas, se han detectado 
declaraciones de importación subvaloradas?  
 WT/TPR/M/204/Add.1 
Page 210  
 
  Answer 
 Undervalued import declarations are widely detected. 
 
Question 
 
 - ¿Qué tipo de medidas adicionales ha pensado adoptar Corea para combatir el 
problema de la subfacturación?  
 
Answer 
 
Various measures are being implemented to com bat under-valuation pr oblem. Those measures 
include "local price survey" and "establishment of criteria for determining the assessed value of 
import goods."  
 Question 
 "18. El KCS ha elaborado una Guía para la Inte gralidad, que incluye la firma, en marzo de 2005, 
del  "Pacto de Integridad entre la Aduana y las Empresas…" la cual es considerada como una herramienta exitosa para el bue n desempeño de la aduana.  
 
 - ¿Podría Corea ampliar la información sobre éste programa?  
 
Answer 
 Korea Customs Service launched the 'Integrity Roadmap' under the Commi ssioner's leadership and 
commitment so as to improve the integrity in the or ganization. Our goal is to raise the integrity level 
to the global standard.   To implement the Integrity Roadmap, KCS set up specific strategies, called SUCCESS. SUCCESS 
stands for Self-Regulation, User Created Integrity , Cul-duct Customs, Corruption-Zero, Evaluation & 
Feedback, System Improvement, Sharing the Valu e. Under these 6 big stra tegies, there are several 
sub-projects to be implemented.  
 Along with the Roadmap, KCS is running the 'Integr ity morning letter', UCC-based integrity video 
clip including message, music, and picture. Also there is ‘Barmi’, integrity e-learning system.  
 
KCS was selected 'Best Integrity Public Service Ag ency' by the 'National Integrity Committee' in 
2006. But we will not be complacent with the resu lt and continue to work for our goal, understanding 
that enhancing integrity is an ongoing process and there is always room for improvement.  
 A lo largo de la sección se ha sostenido que Co rea tiene uno de los sistemas aduaneros mejor 
desarrollados del mundo, que cuenta con un eficiente programa de gestión de riesgos y auditoria, así 
como un buen programa de integridad para los func ionarios aduaneros. En el párrafo 20 se hace 
referencia a los esfuerzos que hace Corea para d ifundir en todo el mundo las técnicas aduaneras 
avanzadas del KCS.   Felicitamos a Corea por éste esfuerzo y lo invitamo s a que comparta y reproduzca sus conocimientos 
y mejores practicas en otras regiones del mundo.   WT/TPR/M/204/Add.1 
 Page 211 
 
 
  Question 
 "25. …El KCS estableció en agosto de 2007, el sistema "SIREN, un sistema de alerta inmediato 
destinado a bloquear las importaciones subvaloradas de  productos agrícolas, plantas y productos de la 
pesca…"  
 
¿Ha pensado Corea en extender este programa a otra  clase de productos que puedan haber presentado 
problemas de subfacturación?   
Answer 
 
After examining the effectiveness of SIREN, Korean government is considering extending this program to other kinds of products. 
 
Question 
 
"51. Corea ha adoptado la medida de sustituir el otorgamiento de preferencias arancelarias a 
cambio de la firma de acuerdos bilaterales y regionales".    - ¿Además de México y Mercosur Con qué otros países de América Latina está 
planeando Corea suscribir TLC’s y cual sería el cronograma previsto? 
 
Answer 
 The Korea-Peru FTA Joint Feasibility Study was co mpleted in May 2008 and currently Korea is 
reviewing the possibility of launching the FTA negotiations with Peru. 
 
ix) Normas y otras prescripciones técnicas.  
 
Question   - ¿Corea cuenta con un inventario de regl amentos técnicos, que incluya todos aquellos 
que están vigentes?  
  - ¿Existen reglamentos emitidos por organismos sectoriales y locales?  En caso 
afirmativo, ¿Han sido notificados?  
 Answer  The Korean Agency for Technology and Standards (KATS) is under constructing a comprehensive 
database for technical regulations, which will be provided from the early 2009.  There are no technical regulations by sectoral or local bodies.  
 
Question  
"81. El sistema de normalización de Corea consiste en reglamentos técnicos  (normas obligatorias) 
elaborados por ministerios y organismos gubern amentales, y normas  (voluntarias)  ("normas 
coreanas") establecidas por la KATS…. En 2007, la distribución de las normas coreanas por sectores 
era la siguiente: productos químicos, prendas de v estir y cerámicas  (24 por ciento); maquinaria  
(18 por ciento); electricidad  (15 por ciento); acero, minería y construcción  (13 por ciento); WT/TPR/M/204/Add.1 
Page 212  
 
  transporte, construcción naval y aeronáutica  (10 por  ciento; industria de la información  (8 por 
ciento); y salud, alimentación, etc.  (12 por ciento)…."   - ¿Cuál es la distribución en el caso de los reglamentos técnicos?  Answer  Korea does not have the distribution data of technica l regulations on sectoral basis, but on regulatory 
authorities basis as follows; DAPA (44%), KFDA (33%), MKE (6%), MIFFAF (5%) etc. 
 Question 
 "84. Se procede prioritariamente a la arm onización de las normas para productos de nuevas 
tecnologías, incluida la tecnología de la información y los servicios…".  
 - ¿Qué porcentaje de las normas que no están armonizadas representan aquellas 
referentes a  estos productos? 
 
Answer 
 Regarding the national standards, where relevant int ernational standards exist or their completion is 
imminent, KATS uses international standards as a basis for the standards of five priority areas. 
Because regulations with regards to these pr oducts are under the jurisdiction of competent 
authorities, the percentage of non-harmonized regulations has not been identified yet. 
 
Question 
 
"86. …Se asegura la transparencia y la opor tunidad para que las partes interesadas puedan 
participar en los procesos de elaboración o revisión de las normas coreanas…"    - ¿Sucede lo mismo en el caso  de los reglamentos técnicos?  
 Answer  The development procedures of "technical regulati ons and conformity assessment procedures is 
stipulated in the Administrative Procedures Act.   
To ensure transparency and opportunity for interested parties, we publish a notice in Official Gazette, 
"Gwanbo", at an early appropriate stage and on website of regulatory authorities.  
 Korea notifies the proposed technical regulations an d conformity assessment procedures in pursuit of 
article 2.9 of the WTO/TBT Agreement. 
 Question 
 90. …La KFDA puede exigir a las empresas farmacéuticas extranjeras que repitan las pruebas clínicas en Corea para poder contar con datos de pruebas de primera mano..." 
 
¿No ha considerado Corea que esta medida puede  interpretarse como un obstáculo técnico al 
comercio?    WT/TPR/M/204/Add.1 
 Page 213 
 
 
  Answer 
 If foreign clinical data are in compliance with Korean regulations, additional clinical tests are not 
required to be conducted in Korea. Requirement of  submitting bridging study data is limited to new 
drug. The Korean standards on bridging studies comply with ICH E5  (Ethnic Factors in the 
Acceptability of Foreign Clinical Data).  
Question  "91. … Se exige una inspección de calidad efectua da por el importador de los cosméticos con 
arreglo a los números de los lotes." 
  - ¿La inspección de cosméticos con arreglo al número de lotes, que se exige a los 
importadores, podría considerarse una prác tica discriminatoria respecto de los 
productores extranjeros?  
 
Answer 
 Quality inspection by batch numbers is conducted in  accordance with standards set by the KFDA for 
domestically manufactured cosmetics and imported pr oducts equally, adhering to the WTO principle 
of national treatment.  
 
Imported cosmetics are waived from the quality in spection, if the quality control standards of the 
manufacturer are mutually recognized between the countries concerned, or are recognized as the 
same with or above than the Good Manufacturing and Quality Control Practice for Cosmetic Products established by the KFDA Commissioner. 
 
Question  "93. En 2007, el KATS proyectaba establecer un si stema modular de evalu ación de la conformidad 
para el sistema obligatorio de certificación"   
 A ¿En qué consiste el sistema modular de evaluación de la conformidad que el KATS 
proyectaba establecer en 2007 para el sistema obligatorio de certificación? 
  B ¿Ya se estableció el mencionado sistema modular de evaluación de la conformidad? 
 
 C En caso negativo, ¿Cuáles fueron las razones para no adoptar dicho sistema? 
 
Answer to a 
 Existing 13 compulsory certification systems were unified into KC (Korea Certification) mark. 
20 kinds of conformity assessment procedures operated in accordance with the compulsory 
certification system were simplified and syst emized into 9 kinds of those.  
 Answer to b & c  In August of 2008, the National Standards Council (chaired by the Prime Minister) decided as 
answered in the above enquiry.  
 The implementation plans to be effective in pha ses from July, 2009 to January, 2011. To implement 
the National Standards Council's decision relevant laws are now under amending.. 
 WT/TPR/M/204/Add.1 
Page 214  
 
  Question 
 "94. Corea también es miembro del Acuer do de Reconocimiento Mu tuo del APEC sobre 
Evaluación de la Conformidad del Equipo de Tel ecomunicaciones  (Fase I) y de la parte I del Acuerdo 
de Reconocimiento Mutuo del APEC  sobre Evaluación de la Conformidad del Equipo Eléctrico y 
Electrónico…" 
 ¿Corea está considerando adherir al acuerdo de reco nocimiento mutuo del APEC sobre evaluación de 
la conformidad de alimentos y productos alimenticios?  
 Answer  Korea has not made any consideration for joini ng the APEC MRA on Conformity Assessment of food 
and foodstuffs. 
 Question 
 "95. … En la esfera de la certificación de automóviles, en virtud de un sistema de autocertificación en vigor desde 2003, los vehículos deben eti quetarse por los fabricantes o importadores son 
responsables de los defectos de los productos…"  
 - ¿Cómo es el control posterior en el caso de los automóviles, que se rigen por un 
sistema de autocertificación? 
 
Answer 
 
Under the self-certification system, a vehicle m anufacturer or importer is obliged to certify 
compliance with the safety standards on his/h er own responsibility and then sells the certified 
vehicles. Government insp ects whether vehicles comply with a ll the safety standards and orders recall 
and imposes a fine if any defect is found. 
 
Question 
 
"98. Para seguir agilizando la entrada de alimen tos importados, la KFDA ha reformado su sistema 
de inspección y que ha suprimido las pruebas de  laboratorio periódicas de productos agrícolas y 
aditivos de alimentos y de productos alimenticios elaborados cuando se trata del mismo alimento 
procedente de una misma empresa…" 
 
Se entiende que cuando no se trata del mismo alimento  procedente de una misma empresa las pruebas 
aún se practican. ¿Existen estos controles para los productores nacionales?   
Answer 
 
A different kind of food from the same company is s ubject to the test. The same product of the same 
company which is waived from the laboratory test  refers to the one of which manufacturing country 
and company, product name, manufacturing process, and name of raw material are the same.  
 The laboratory test is conducted only for impor ted foods, and domestic producers are obliged to 
conduct self-imposed quality inspection every month  ( every 6 months at the latest) for every item to 
ensure compliance with standards and specifications under Article 19 of Food Sanitation Act.     
  WT/TPR/M/204/Add.1 
 Page 215 
 
 
  Question 
 ¿Corea realiza estudios de impacto cuando elabor a sus reglamentos técnicos? ¿Sobre qué aspectos? 
 
Answer 
 
Impact studies are carried out in aspects of possible effects on consumers and industry, estimated social costs, and trade at the establishment or revision of Food Sanitation Act. 
 
x) Contratación pública 
 
"111. Cierta parte de la contratación pública se lleva a cabo por un organismo centralizado, el 
Servicio de Contratación Pública (PPS).  La  función de este Servicio se está modificando 
progresivamente, y con ello la responsabilidad  de la contratación se descentralizará a los 
organismos…" 
 
 - ¿Cuáles fueron las razones para la creación del Servicio de Contratación Pública 
(PPS)? 
  - Actualmente, ¿Cuáles son las razones para su desmonte progresivo a través de 
mayores responsabilidades en cabeza de  las entidades contratantes? 
 
Answer 
 Korea has traditionally adopted a centralized pr ocurement system with a view to enhancing 
professionalism, transparency and efficiency. In order to adapt itself to rapidly changing environment 
of government procurement and to enlarge autonomy of local governments, Ko rea is decentralizing 
the responsibility for purchasing to various agencies.  
 
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
vi) Derechos de propiedad intelectual  Derechos de autor y derechos conexos 
 
Question  "185. La protección del derecho de autor está a car go del Ministerio de Cultura, Deportes y Turismo  
(Ley de Derecho de Autor de 1957).  La modifi cación introducida en esta Ley en 2005 incorporó 
derechos de transmisión interacti vos para los artistas intérpretes o ejecutantes y los productores de 
fonogramas, así como los titulares de derecho de auto r, en conformidad con el Tratado de la OMPI 
sobre Interpretación o Ejecución y Fonogramas.   También amplió la protección de los derechos 
conexos y estableció derechos de transmisión pública y derechos de transmisió n digital de sonidos a 
fin de proteger nuevos tipos de obras.  Se aclararon cuestiones relativas a la responsabilidad de los 
proveedores de servicios en línea en caso de infr acción del derecho de autor.  Se prohibió la 
producción y el suministro de dispositivos o servicios  que permitan eludir la tecnología de control de 
copias y se introdujo un sistema de aviso y desmantela miento para ofrecer ince ntivos jurídicos a fin 
de que los proveedores de servicios en línea clausu rasen rápidamente los materiales infractores a 
solicitud del titular del derecho.  La s bases de datos no originales gozan de protección sui generis.  En 
2007 se modificó el Decreto de aplicación de la Ley de  Derecho de Autor para facilitar el uso de obras 
amparadas por el derecho de autor en el entorno digital." 
  A ¿Bajo qué condiciones se está facilitando el uso de obras amparadas por el derecho de 
autor en el entorno digital?  
 WT/TPR/M/204/Add.1 
Page 216  
 
   B ¿Supone esto la implementación de ex cepciones, limitaciones y/o licencias 
obligatorias en este entorno? 
  C ¿Cuál es el alcance de la expresión "s onidos" y a qué otro tipo de obras se hace 
referencia? 
 
 D ¿Cuáles son las condiciones de otorgamien to de licencias obligatorias en materia de 
derecho de autor?  
  E ¿En qué casos se otorgaron licencias obligatorias y cuál fue el impacto de la medida? 
 
Answer to a 
 The Ministry of Culture, Sports and Tourism establis hed a consolidated system to allow users to clear 
copyright online and is currently operating th e system limited to the domestic musical works 
 
In addition, the ‘Copyright-Free website  (http://f reeuse.copyright.or.kr)' was established to provide 
information on works that had been donated or c opyright of which had already fallen into the public 
domain.   
 
Answer to b 
 
The Copy Right Act also applies to the use of works by online. 
 Answer to c  
Works that can be composed of ‘audio’ includes lectures and speeches, and etc.   
 Answer to d  The compulsory licenses can be granted in the fo llowing cases. Specific compensation to the right 
holder or a deposit to the court should be made  in order to obtain approval for use.  
 
 1. when the whereabouts of the copyright hol der is unknown despite significant efforts 
made, the concerned work can be u sed after deposit to the court.  
 2. broadcast of published works   Despite discussions with the right holder of published works by a broadcaster for the 
  public purpose, when there is no agreement. 
 3. production of records for sale  Despite discussions with the right holder of records which spanned 3 years after first 
sale by a person who wishes to produce anot her record using the concerned record, 
when there is no agreement.  
 
Answer to e  Compulsory licenses have been granted  for 17 cases  (including 2 foreign works) so far. Compulsory 
licensing is expected to facilitate the usage of c opyrighted works by allowi ng users to exploit works 
after depositing compensations to the court when the whereabouts of the right holder are unknown or 
the right holder refuses receiving compensations.    WT/TPR/M/204/Add.1 
 Page 217 
 
 
  Question 
 "186. En opinión de un importante interlocutor comerc ial de Corea, las modificaciones de la Ley de 
Derecho de Autor aún dejan impreciso el alcance  de la responsabilidad de los proveedores de 
servicios y las limitaciones y excepciones de esa responsabilidad.   La nueva ley no resuelve las 
anteriores imperfecciones de la protección de las gr abaciones de sonido ni las excepciones relativas a 
la copia privada.  Las autoridades afirman que, como las transmisiones digitales de sonido tienen 
aspectos similares a la radiodifusión, la Ley de De recho de Autor establece derechos de remuneración 
"razonables" para las transmisiones digitales de sonido en favor de los productores de fonogramas, 
como los que se otorgan para la radiodifusión.  Además, en lo que respecta a las excepciones 
referentes a las copias en el medio universitario, las modificaciones de la Ley de Derecho de Autor 
limitan el propósito de la utilización a los "fines de us o en clase"  (en lugar de los anteriores "fines de 
enseñanza"), y restringen el alcance del uso a "partes de una obra"  (en lugar de "la totalidad o parte 
de una obra").  La modificación también impone el pago de regalías por el uso.  Las autoridades 
afirman que la limitación del derecho de autor en favor de las universidades es muy limitada y 
razonable." 
  - Se refiere a un derecho de transmisión interactiva a favor de los artistas intérpretes o 
ejecutantes, pero no lo hace expresamente r especto al autor, no obstante afirma que 
"el derecho de autor aplica a las transmisiones interactivas".  ¿Cuál es la razón de este trato diferencial? 
 
Answer 
 The current Copyright Act provides public transmission right to the right holders and it covers broadcasting right, interactive transmission right and right to digital audio transmission.  
 
Question  "187. Los programas informáticos están protegidos en virtud de una ley especial  (la Ley de Protección de los Programas de Ordenador de 1986, administrada por el Ministerio de Cultura, 
Deportes y Turismo).  La Ley fue modificada por última vez en octubre de  2006 para ampliar las 
facultades del Comité de Protección del Derecho de Au tor en el Soporte Lógico de Corea  (SOCOP) y 
establecer sanciones por la violación de diversas leyes sobre propiedad intelectual.   Los derechos de 
transmisión fueron introducidos en diciembre de 1998.   Con las revisiones aplicadas el 1º de julio de 
2003 aumentó la responsabilidad de los proveedores de servicios de Internet en los casos de infracción 
del derecho de autor.  El titular tiene el derecho exclusivo de copiar programas informáticos, con la 
salvedad de las copias temporales.  La protecci ón de los programas se concede durante 50 años a 
partir del año siguiente a su publicación.  Se permiten reproducciones mínimas si no perjudican en 
forma irrazonable los intereses económicos del titular del derecho;  este criterio se aplica tanto a las 
obras extranjeras como a las nacionales.  La Ley de Protección de los Programas de Ordenador dispone expresamente la posibilidad de otorgar licen cias obligatorias  (por ejemplo, cuando el titular 
del derecho no puede ser identificado o enco ntrado, con sujeción a ciertos requisitos de 
procedimiento).  No se ha concedido ninguna licencia de ese tipo." 
  - ¿Qué se entiende por "reproducción mínima" de un soporte lógico?   - ¿Cuáles son las condiciones de otorgamien to de licencias obligatorias en materia de 
soporte lógico? 
 WT/TPR/M/204/Add.1 
Page 218  
 
  Answer to a 
 It is for prosecution or investigation, use for the book to be used in high schools and under, and 
studying or testing the functions of  program by a legitimate user. In these cases, it is not regarded as 
the copyright infringement.  
 
Answer to b  When the whereabouts of the copyright holder is  unknown despite significant efforts made, the 
concerned work can be used after deposit to the court.  
 
IV. POLITICAS COMERCIALES POR SECTORES 2) A
GRICULTURA  
 
Question 
 
"10. La liberalización de las importaciones en el marco de las negociaciones de la OMC y de 
diferentes acuerdos de libre comercio es uno de los retos más importantes que tiene que afrontar el 
sector agrícola…  Corea tomó medidas para co mpensar a los agricultores afectados por los 
compromisos de liberalización asumidos en los acuerdos de libre comercio que ha suscrito recientemente. " 
 
 - ¿En qué consisten estas medidas de compensación?    - ¿Cuál es la naturaleza de este fondo?   
 - ¿De donde provienen los recursos?  
  - ¿Quienes son los beneficiarios y en qué montos?    - ¿Se ajusta a los compromisos de Corea en la OMC?  Answer  Compensation measures include direct payment for loss from the FTA concessions and support for 
retiring farms which are consistent with Agreemen t of Agriculture and Korea’s UR Domestic Support 
Commitments. 
 
A substantial amount of FTA funds is financed  from government financial resources, and Producers’ 
associations partially provide capital. From 2004  to 2007, 201 billion won for compensation were 
administered.  Because fruit industry was mostly affected by th e existing FTAs, most of FTA fund was provided to 
fruit farms.   
Question  "11. … Además, el coeficiente de utilización de lo s contingentes arancelarios es aproximadamente 
del 69 por ciento en promedio;  los contingentes ar ancelarios, o bien se utilizan, administran y asignan 
por entidades de comercio estatal, o bien por asociac iones industriales   eso plantea la posibilidad de 
conflictos entre sus intereses importadores y los de  sus miembros agrícolas   Los productores 
nacionales de arroz, principal cultivo básico, se si guen beneficiando principalm ente de una restricción 
cuantitativa a la importación, que se seguirá aplica ndo hasta 2014;  también se aplican restricciones  WT/TPR/M/204/Add.1 
 Page 219 
 
 
  cuantitativas a la exportación desde 2007  (para la cebada hasta 2008,).  Durante el período que se 
examina, Corea ha utilizado periódicamente las dispos iciones de salvaguardia especial previstas en el 
Acuerdo sobre la Agricultura de la OMC.  Se otorgan subvenciones a la exportación para 
determinados productos agrícolas con la finalidad de  reducir los costos de comercialización de los 
exportadores. 
 
 - A que se debe la baja utilización de lo s contingentes arancelarios  (69%). Corea 
cumple sus compromisos multilaterales en materia de contingentes arancelarios? 
  - Se señala que "los contingentes arancelario s, o bien se utilizan, administran y asignan 
por entidades de comercio estatal, o bien por asociaciones industriales.  Eso plantea la 
posibilidad de conflictos entre sus inter eses importadores y los de sus miembros 
agrícolas". ¿Cuáles son las razones de este posible conflicto de intereses? 
  - La administración por asociaciones industriales es compatible con los compromisos 
OMC? 
 
Answer  
 The reasons why some of the products have the lo w TRQ quota fill rates are considered to be SPS 
measures due to break out of BSE, AI and so on,  domestic market condition, price surge of imported 
agricultural products, domestic surp lus stock, changes in industrial  structure and decrease in import 
demand caused by econom ic downturn.    
 The Korean government is implementing TRQ adminis tration according to the Country Schedule, a 
result of UR and based on notified TRQ administrati on methods  (as shown in  (G/AG/N/KOR1)).  
 
The WTO secretariat report notes that TRQ administr ation by state trading agencies or industry 
association causes potential conflicts between importers and producers. The items administered by 
state trading entities are mostly the products which have huge influence on domestic demand and 
supply and price stabilization. If private entities s hould be authorized to administer TRQ, it would be 
extremely, it would be difficult to address the con flict of interests due to big differences between in-
quota and out-of- quota tariffs. For that reason,  TRQ is administered through state trading.  
 Industry association has been administering the import of those products since before Uruguay Round. Therefore, it is believed to have the capacity to manage TRQ by considering market 
conditions and characteris tics of each product.  
 
TRQ administration by industry association is not inconsistent with the WTO commitments because 
the association is notified to the Country Sche dule as qualified agency and is administering TRQ 
according to the notified methods.  
 
Question 
 
"15. El nivel de los pagos directos por producto s específicos en relación con el sostenimiento de 
los precios del mercado financiados  por el consumidor aumentó de alrededor del 1 por ciento de 
ayuda a los productores en 1986 1988 al 9 por ciento en 2004-2006 y el 9,6 por ciento en 2006.  Esos pagos totalizaron 2,3 billones de won en 2006  (1,5 bi llones en 2004);  los pagos públicos, incluida la 
prestación de servicios generales de apoyo, ascendieron a 5,7 billones de won en 2006  (frente a 
4,7 billones de won en 2004).  Los pagos direct os, a condición de que estén suficientemente 
desconectados de la producción, causan una distor sión mucho menor que el sostenimiento de los 
precios de mercado, que por estar basado en la producción, distorsiona el comercio y la producción 
sobre todo al contribuir a un exceso de producción.  Corea no tiene sistemas de pagos directos WT/TPR/M/204/Add.1 
Page 220  
 
  basados en la producción propiamente dichos, sino que los efectúa en función de la renta agrícola 
total, la superficie plantada o el número de anim ales, así como el uso de insumos.  No obstante, 
aunque probablemente esos pagos causan menos dist orsión que la ayuda basada en la producción, esas 
subvenciones estimulan la producción y el uso de insumos, por lo que distorsionan el comercio 
agrícola con efectos potencialmente adversos para  el medio ambiente, aunque vayan acompañados de 
nuevos planes para contribuir a reducir esos efectos  nocivos.  … prácticamen te todos los pagos por 
superficie están condicionados a la adopción de  prácticas agrícolas respetuosas con el medio 
ambiente.  Estos sistemas incluyen los pagos dir ectos para prácticas agrícolas respetuosas con el 
medio ambiente mediante la re ducción de abonos y plaguicidas…" 
 
 - ¿Podría informar Corea en qué producto s se incrementaron los pagos directos y las 
ayudas a los ingresos agrícolas?  
  - ¿Cuál es la razón de fortalecer estas ayudas?   
 - ¿Cuál es el impacto que las mismas han tenido en el desempeño del sector 
agropecuario?  
  - ¿Cumplen con las normas de la OMC?  
Answer  
 
The Korean government basically manages budget for direct payments and diverse farm income 
support by project unit. We still remai n at the stage of calculating how  much support is given for each 
product in monetary terms. When we complete th e calculation and review on payments per product, 
the related data will be notified to the WTO.  
 
Since the year 2004, Korea has introduced new dire ct payment programs such as the direct payment 
for rice income (2005) and the direct payment fo r rural landscape pres ervation (2005), while 
expanding the scope of crops subject to disaster in surance. This is the result from the Korean 
government's agricultural policy shift in response to market opening such as Doha Round and FTAs, 
with prices governed by market and decreased fa rm household income compensated by direct 
payments.  
 The government is reforming agricultural support by expanding direct payment programs in a more 
market oriented manner. This policy is implemen ted in compliance with the WTO Agreement on 
Agriculture.  
 
Question  En términos generales surge la siguiente inquietud:     - ¿Qué restricciones a la export ación existen y en qué productos?  
 
 - ¿Están plenamente justificadas y cumplen las normas OMC?  
Answer  
 
Korea has the recommendation progr am for rice export in place.  Except for this, there is no 
restriction imposed on exporting agricultural pr oducts. Under the recommendation program for rice 
export, a letter of recommendation is issued to  potential exporters without separate eligibility 
requirements as long as the requested amount rem ains within the total rice amount allowed for 
export. Therefore, there is no reason to find this  program in violation of WTO regulations.  WT/TPR/M/204/Add.1 
 Page 221 
 
 
  6) S ERVICIOS  
i) Características generales  
 
Question  
"72. Entre 2004 y 2007, las exportaciones de servicios no atribuibles a los factores crecieron a una 
tasa media anual del 12,6 por ciento, superando los 63.000 millones de dólares EE.UU.  (alrededor del 
17 por ciento de las exportaciones de mercancías).  Sin embargo, en el mismo período, las importaciones de servicios crecieron a una tasa media anual próxima al 17 por ciento, debido a lo cual 
el déficit en los servicios aumentó de 8.100 millones a 20.600 millones de dólares EE.UU.  El 
transporte y los viajes son los servicios  objeto de un comercio más intenso." 
  - ¿Cuáles son las razones que explican el déficit comercial de servicios?    - ¿Qué sectores de servicios son los qu e registran un mayor nivel de importación que 
de exportación? 
 
Answer 
 Please refer to Korea’s response to Mexico. 
 
ii) Compromisos globales en el marco del AGCS 
 
Question  "73. Corea ha asumido compromisos en 98 de los 155 sectores definidos en el AGCS.  En lo que 
respecta a la presencia comercial se ha consignado una limitación a la participación extranjera del 
49 por ciento para el suministro de servicios de telecomunicaciones básicas.  Para poder prestar servicios profesionales, tales como servicios jurídi cos, de contabilidad y servicios de auditoría y 
asesoramiento fiscal, han de ser aprobados en Corea los títulos de aptitud extranjeros.  El acceso a 
otros servicios, como la publicación de periódicos diar ios y de otro tipo y las actividades de agencias 
de noticias, está sujeto a diferent es limitaciones a la participación extranjera.  Por otro lado, según el 
informe relativo al plan de acción individual de Co rea para 2006, el mayor interés de Corea en la 
esfera de los servicios es la liberalización de los servicios de infraestructura, como el transporte marítimo, la construcción, las telecomunicaciones,  los servicios de distribución y los servicios 
financieros."  
 A. ¿Además de los sectores de telecomunicaciones básicas, publicación de periódicos y 
agencias de noticias, existen otros sectores de  servicios en Corea en los que se limite 
la participación de capital extranjero?  
  B. ¿El plan de acción individual de Corea para 2006, cuyo mayor interés en la esfera de 
los servicios es la liberalización de los servicios, entre ellos las telecomunicaciones, 
prevé la eliminación de la limitación a la participación extranjera del 49% para el 
suministro de servicios de telecomunicaciones básicas?  
 
Answer to a 
 
The figures below demonstrate that 99.7 percent of Korean business areas  (as defined by the Korean 
standard industrial classification system) are open to foreign investment. Out of 1,083 areas, only three  (television, radio and nuclear power genera tion) are not open, while 24 areas are partially 
open.  
 WT/TPR/M/204/Add.1 
Page 222  
 
  Sector/business  FDI limitation  
A.  Closed    
Radio broadcasting Wholly closed 
Ground-wave broadcasting Wholly closed 
Nuclear power generation Wholly closed 
B.  Partially closed    
Growing of cereal crops and other crops for 
food Allowed except for rice and barley growing  
Farming of beef cattle  Less than 50% foreign equity 
Costal and inshore fishing Le ss than 50% foreign equity 
Manufacture of other basic inorganic 
chemicals  Allowed, excluding the manufacture and supplyi ng of fuel for nuclear power generation 
Manufacture of smelting, refining and alloys of 
non-ferrous metals The same restrictions that apply to the m anufacture of other basic  inorganic chemicals 
also apply to this sector. 
Publishing of newspapers Less than 30% foreign equity 
Publishing of magazines and periodica ls Less than 50% foreign equity 
Hydraulic power generation 
Thermal power generation 
Other electricity generation The facilities foreign nationals purchase fr om the KEPCO (Korea Electric Power 
Corporation)are no more than 30 percent of  all domestic power generation facilities. 
Transmission and distribution of electric 
power Allowed provided total foreign equity is le ss than 50% and that the largest shareholder is 
Korean 
Wholesale of meat Less than 50% foreign equity 
Coastal water passenger transport 
Coastal water freight transport Allowed between South and North Korea and less than 50% foreign equity: Foreign 
investors must enter into  joint ventures with domestic shipping companies 
Scheduled air transport Less than 50% foreign equity 
Non-scheduled air transport and airplane 
rental with operator Less than 50% foreign equity 
Satellite telecommunications No more than 49% foreign equity 
Wired telecommunications No mo re than 49% foreign equity 
Wireless telecommunications No more than 49% foreign equity 
Other telecommunications No more than 49% foreign equity 
Domestic commercial banking Allowed only for commercial and local banking 
Radioactive waste disposal Permitted except for radioac tive waste management under the Electricity Business Act 
Broadcasting via satellite and others No  more than 33% foreign equity 
Cable networks No more than 49% foreign equity 
Program distribution No more  than 49% foreign equity 
News agency activities Less than 25% foreign equity 
 
Answer to b 
 Korean telecommunication market including KT  (J une 2002) is completely privatized and the 
government does not possess any shares of telecommunication operators. 
  WT/TPR/M/204/Add.1 
 Page 223 
 
 
  Since April 2001, the foreign equity ceiling of ba sic telecommunication operators have been raised 
from 33% to 49%. Since the level of market opening is relatively high compared with other major countries, there is no plan for further opening.  
 
iii) Servicios bancarios y financieros  
 
Question  "75. El sector financiero representó el 8,9 por ci ento del PIB en 2007 y su contribución al empleo 
en la economía fue del 3,4 por ciento en 2006  (no se dispone de los datos correspondientes a 2007), 
lo que significa que la productividad de la mano de obra en el sector es mucho mayor que en el 
conjunto del sector de los servicios.  El sector fi nanciero ha sido objeto de reformas y de una 
reestructuración, que han modificado sustancialmente el comportamiento de los bancos, que ahora se ocupan más que anteriormente de la rentabilidad y la competitividad." 
 
¿Anteriormente cuál era la preocupación centr al de los bancos, tomando en consideración la 
afirmación " (…) que ahora se ocupan más que anterior mente de la rentabilidad y la competitividad"? 
 
Answer  
 In 1997, when Korea suffered financial crisis, the local banks recorded losses 4 years in a row and 
many other prudential signs became worsened. 
 Therefore, the policy priority was placed on th e normalization of management of the banks and 
acquisition of prudence through restructuring. 
 
a) Estructura y propiedad  
"77. Desde el último Examen de las Políticas Come rciales de Corea, el Gobierno ha proseguido la 
desinversión en los bancos.  Entre las desinversi ones más importantes cabe señalar la reducción de la 
participación de la Sociedad de Se guros de Depósitos de Corea  (KDIC)  en el grupo financiero Woori, 
la venta del Korea First Bank  (en el que el Estado  tenía una participación mayoritaria) al Standard 
Chartered Bank y la liquidación de la participación del Estado en el Hana Bank.   Por otra parte, la 
participación extranjera en los bancos coreanos ha aumentado significativamente, sobre todo en los 
casos del Citigroup y el Standard Chartered.  Las autoridades indicaron que no hay presencia del Estado en las instituciones financieras no bancarias.  La participación extranjera se limita a una caja 
de ahorros y 13 empresas especializadas en el crédito   (que representan casi el 11 por ciento de los 
activos totales de dichas empresas)." 
  - ¿La desinversión del Gobierno en los ba ncos obedece a una política particular que 
Corea haya implementado para tal fin? 
 
Answer  
 
The Korean government is pursuing the privatization of state-owned banks by taking into account of 
market condition in order to achieve market economy based on originality in the private sector.  
 WT/TPR/M/204/Add.1 
Page 224  
 
  v) Telecomunicaciones 
 
Características generales y estructura del mercado 
 
Question 
 
"107. En 2005 se modificó el proceso de concesión de licencias.  Ahora, las empresas que se basan 
en la utilización de instalaciones pueden solicitar una licencia en cualquier momento  (anteriormente 
sólo podían hacerlo durante dos períodos en el transc urso del año).  Además, el plazo para examinar 
las solicitudes de licencia se ha reducido en uno o dos meses.  Para obtener una licencia, los 
proveedores basados en la utilización de instalaciones deben presentar un plan empresarial, un plan de 
ventas, un plan tecnológico y un plan de I+D.  Una vez obtenida la licencia, estos proveedores deben 
aportar el 0,5 por ciento de sus ingresos del año ante rior al fondo de financiación de las actividades de 
I+D.  En el caso de los proveedores dominantes, la contribución es del 0,75 por ciento de los ingresos.  
Los operadores de telecomunicaciones que paga n un canon por la utilización del espectro de 
frecuencias están exentos, al igual que aquellos que sufrieron pérdidas netas o cuyos ingresos del año 
anterior no hubieran superado los 30.000 millones de  won.  El MKE es el organismo encargado de 
administrar la contribución para I+D."   - El párrafo anterior explica el proceso de concesión de licencias para las empresas que 
se basan en la utilización de instalaciones, pero no explica el régimen de licencia para 
la reventa. ¿Cuál es el proceso  de concesión para las empresas que van hacer 
reventa?  
 
Answer  
 
Operators who want to manage re-sale businesses sha ll register at the KCC by providing plans for 
financial, technological and protection of users. 
 
Reporte del Gobierno WT/TPR/G/204 
 
2) I
NVERSIÓN Y COMERCIO EXTERIOR  
 
Question  19. Desde 2004, Corea ha experimentado un ligero desc enso de la inversión extranjera directa.  
No obstante, las entradas anuales de IED se han mantenido en niveles elevados, superiores a los 
10.000 millones de dólares EE.UU.  (cifras cuantifi cadas sobre la base de las notificaciones).  El 
Gobierno de Corea ha adoptado medidas activas, como el recorte de los impuestos sobre las 
sociedades y la reducción del período de evaluación  de las marcas de fábr ica o de comercio, para 
estimular la IED mediante la desreglamentación y mejorando los medios para  la promoción de las 
inversiones.  Según la OCDE, el índice de restricci ón reguladora de la IED de Corea es inferior al 
nivel medio de la OCDE, lo que demuestra un nivel más alto de apertura en el sector de la IED.  La 
desreglamentación continúa ocupando un lugar priorita rio en el programa del Gobierno coreano.  En 
2008 se puso en marcha el Consejo Presidencial sobr e la Competitividad Nacional.  Su principal 
objetivo es crear un entorno más propicio para las actividades comerciales eliminando los obstáculos 
innecesarios que dificultan la inversión.  
 - ¿En qué consiste la política de desreglamentación?  
  - ¿Cuál ha sido el resultado obtenido desde su implementación?   WT/TPR/M/204/Add.1 
 Page 225 
 
 
  Answer 
 The Regulatory Reform Committee reviews all propo sed legislation and proposed revisions to existing 
legislation.  
 
It also works to identify unnecessary regulations and improve the business environment by easing or 
abolishing regulations where appropriate.  Furthermore, the Committee stri ves to expedite the approval process for industrial complex 
construction projects, facilitate the establishment of foreign medical institutions inside the Free 
Economic Zones, and make it easier for foreign investors to obtain permanent residency.  
 
CHINESE TAIPEI
 
 
A. WTO Secretariat Report (WT/TPR/S/204) 
 
SUMMARY OBSERVATIONS (3) T
RADE POLICY DEVELOPMENTS  
Page viii, Paragraph 10 
 We note that an early warning system for undervalue d customs declaration of agricultural, forest and 
fisheries products was introduced in August 20 07 to block their under-invoices importation into 
Korea.   Could Korea please provide us with the details of the said system and an evaluation of its effectiveness after one year of implementation?  
 
Answer 
 Firstly, KCS surveys prices from various sources including Korea Agro-Fishery Trade Cooperation, 
Ministry for Food, Agriculture, Forestry and Fishery and related companies.  
If we put those prices into the SIREN system, which uses statistic methods, the system can produce 
fair prices through comparison the import  price with the prices of like products. 
 As of now, we haven’t carried out any quantitati ve analysis on the effecti veness of the system, 
however, we expect that the system would contribute to relieving undervalued customs declaration in 
many aspects.  
I. ECONOMIC ENVIRONMENT 
(7) T
RENDS AND PATTERNS IN FOREIGN INVESTMENT  
 
Question : Page 12, Paragraph 27 
 
Korea’s FDI inflows reached US$12.8 billion in 2004 but declined to US$11.2 billion in 2006. Inward 
FDI as a percentage of GDP declined from 1.2% in 2004 to 0.4% in 2006.  FDI inflows to Korea were concentrated mainly in manufacturing and services, while wholesale and 
retail services had attracted markedly less by 2006.  FDI inflows in manufacturing have been quite 
volatile even though the business environment has been improving and certain restrictions on FDI 
have been lifted.   WT/TPR/M/204/Add.1 
Page 226  
 
  Could Korea please inform us of its strategies and plans for attracting more FDI inflows?  
 
Answer 
 In an attempt to promote foreign direct investment , Korea has been committ ed to fundamentally 
improve the investment environment and has been engaged in strategic activities to attract foreign 
investment. 
 With a goal of creating a world-class investment environment, the Korean government established 
and has pursed a three-year plan to improve the fore ign investment environment. This plan requires 
cooperation and collaboration among all relevant Ministries.  
 Question:  Page 12, Paragraph 28 
 Korea’s FDI outflows rose considerably from US $6 billion in 2004 to US$ 9.9 billion in 2006. More 
than half was invested in other Asian countries, par ticularly China, due mainly to Korean firms taking 
advantage of the comparatively lower wages in China and other Asian countries. 
 
However, the RMB continues to appreciate, and investment laws and regulations have been 
continuously promulgated or revised in China si nce 2007, creating difficulties for FDI companies to 
face.  Could Korea please describe its strategies and plans for assisting Korean firms investing in China?  
 
Answer 
 China is Korea’s largest overseas investment market, accounting for 46. 5 percent of the total. China’s 
recent policy changes and the introduction of strong er regulations concerning labor, environmental 
protection and land use have created a number of  challenges for Korean companies operating in 
China.  Considering most Korean companies operating in China are small businesses, the government is 
providing various support measures to deal with the above challeng es. These include management 
consulting services, the dispatch of delegations, and the provision of information and training.  
 
To help Korean businesses in China become more  competitive, the government will enhance its 
support for market research and other marketing activiti es, while strengthening support for bilateral 
industrial and technical cooperation in the areas of  IT, biotechnology, the environment and energy. 
 
(8) O
UTLOOK   
Question:  Page 16, Paragraph 29 
 Low productivity in the services sector is a serious  impediment to Korea’s growth. We understand 
that the Korean government has announced the in troduction of its "Service-PROGRESS" programme. 
 
Could Korea please provide details of the cont ent of the "Service-PROGRESS" programme, and 
describe specifically how it seek s to increase productivity and to e nhance the competitiveness of the 
services industry and create employment?    WT/TPR/M/204/Add.1 
 Page 227 
 
 
  Answer 
 The Korean government will consistently push fo rward further service market opening to raise 
productivity of the service industry. The reform pro cess will be carried out based on the following 
principles. 
 
Firstly, we adopted "openness" as a major strategy of "Service PROGRESS." "PROGRESS" means Productivity, Regulatory reform, Openness, Global st andard, Rivalry, Environmental improvement, 
Specialization and Scale economy. 
 
We will overhaul regulations to facilitate investment  and business start-ups in the service industry. 
The government will encourage foreign educational in stitutions to establish institutions in Korea by 
providing various support; for example, we will allow remittance of those institutions to their 
countries.   
We will encourage the service sector to utilize IT. More specifically, the government will support 
proliferation of RFID/USN and encourage the shar ing of IT-related facilities and equipment. 
 We will increase our investment in R&D in the knowledge-based service sector including design and 
software. We will try to increa se the proportion of industrial technology R&D in the service sector 
from 3.1% in 2008 to 6.2% in 2012. 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES (1) I
NTRODUCTION  
Question:  Page 18, Paragraph 3 
 
The Report states that "…several tax and othe r incentives are reserved for foreign-invested 
companies.  Moreover, action has been taken to improve both the business and the living environment 
for foreign invested companies and their employees."   Please describe the main idea and the essential details of the above-mentioned action for our 
reference.  
 
Answer 
 Korea has taken steps to ensure that its regulati ons, administrative proce dures and living conditions 
meet global standards so as not to hinder foreign investment.  
 
Korea has established and is pursuing a three-year plan to improve the foreign investment climate. 
The plan was established through consultations with  relevant ministries after working with foreign 
chambers of commerce, including the American Chamber of Commerce in Korea, as well as with local governments and Invest Korea to  identify existing problems.  
 
First, Korea is making efforts to deregulate: We  are reducing the duration of environmental and 
traffic impact assessments; minimizing the numb er of extended tax audits; adopting international 
accounting standards; and improving regulations relat ed to the protection of intellectual property 
rights.   
Secondly, we have established labor-management support centers for foreign-invested companies as 
part of a proactive approach to labor  relations at such companies. We are also extending the period 
of exemption from the obligation to employ a certain number of veterans and their children.   WT/TPR/M/204/Add.1 
Page 228  
 
  Third, we are taking steps to improve living conditi ons for foreign nationals in Korea. We are actively 
pursuing the establishment of additional foreign schools, expanding the availability of medical 
services for foreigners in Korea, providing Eng lish subtitles for IPTV, and offering new Korean 
language classes for foreign investors.  
 
(5) T
RADE LAWS AND REGULATIONS  
Question:  Page 21, Paragraph 18 
 According to the report, a Presidential decree, "regulation on concluding FTAs," was introduced in 
June 2004 to ensure transparency for any FTA negotiations. 
 
How has the regulation helped to make information on FTAs more transparent, and what are its actual 
effects?   
Answer 
 
The regulation on concluding FTAs enacted in J une 2004 has the following effects in terms of 
transparency. 
 
 - The regulations made it possible for the general public to understand better the 
procedures of concluding an FTA. 
 
 - The establishment of non-governmental consulting committee on FTA enlarged the 
opportunity of hearing the opinions in private sectors. 
  - The regulation provides for holding public hearings which contributes to the 
promotion of transparency. 
 
(6) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional agreements 
Question:  Pages 25&26, Paragraphs 25&28 
 
We note that Korea has pursued and concluded inte nsive negotiations on FTAs with its major trading 
partners. At the same time, regional economic integr ation is also an important topic on the APEC 
agenda.  1. Could Korea please provide its views on the po ssibilities of promoting regional integration in 
APEC on the basis of P4, ASEAN+1 or ASEAN+X? 
 2. Could the APEC integration process eliminat e the "spaghetti-bowl" effects created by the 
proliferation of bilateral FTAs? 
 
Answer to 1 
 
Korea is participating actively in the efforts of reg ional integration in East Asia and hopes that these 
efforts would contribute to the regional integration in APEC.   Answer to 2 
 
Some economists point out that 'spaghett i-bowl' effects were rather exaggerated. 
 We believe that liberalization promoted through bi lateral or regional trade agreements will serve to 
accelerate domestic reform and facilitate multilateral trade liberalization.  WT/TPR/M/204/Add.1 
 Page 229 
 
 
  (6) T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements 
Question:  Page 31, Paragraph 44 
 We read in the Report that, "[t]he authorities i ndicate that Korea has not yet witnessed any negative 
side-effects due to FTAs and recognize that administration is the key to their success." 
 Could Korea please provide further information on how the effects of FTAs are analysed and what criteria are used to select its FTA partners?  Answer  In general, the impact assessment of a possibl e FTA is carried out based on a CGE (Computable 
General Equilibrium) Model in company with an analysis of the impacts on major industries. 
 
Several elements are taken into  consideration in selecting possible FTA partners, including economic 
benefits, FTA policy of and diplomatic relations with the candidate countries. 
 
(7) F
OREIGN INVESTMENT REGIME  
Question:  Page 32, Paragraph 51 
 
Korea’s investment regime is applied on an MF N basis. However, under the Korea-United States 
FTA, telecommunications and transportation are exempt from MFN.  Could Korea please explain why these sectors were kept exempt from MFN?  Answer  FTA is fundamentally a bilateral agreement which makes the person and the corporation of the 
contracting parties to be the beneficiaries in principle.  
 Although, there are cases where persons and corpora tions of the non-parties can partly be benefited 
according to the domestic law, it is not an essentia l point of FTAs to exerting a favorable or an 
unfavorable influence to non-contracting parties with a reflective impact by the agreement. 
 
Question : Page 32, Paragraph 51  
Foreign investors in Korea enjoy more favourable tax treatment and selection of business sites than 
nationals, and are assured national treatment a nd freedom in performing FDI activities, except as 
provided in other laws. No FDI restrictions are a llowed, unless they threaten national security, public 
order, public health, environmental preservation, or social morals, or are restricted by the FIPA or 
under other legislation, such as the Fisheries Act,  Maritime Act, and Telecommunications Business 
Act. 
 
While the restrictions on FDI inflows in Korea ha ve been widely reduced, and more favourable 
treatment has also been provided to foreign invest ors, all of the treatment mentioned above comes 
with the qualification "except as provided in other laws".  
Could Korea please provide a list of the laws containing provisions that serve as the exceptions? 
 WT/TPR/M/204/Add.1 
Page 230  
 
  Answer 
 Please refer to the answer to Co lombia’s question (SERVICIOS). 
 
Question : Page 33, Paragraph 54-55 
 
While government approval of FDI is  not required, prior notification by foreign investors is needed, 
and foreign-capital invested companies must register to be eligible for incentives. In addition, foreign 
companies can establish local branches subject to notif ication and registration as a foreign- investment 
company.  
 
Could Korea please provide details of:   1. its framework and procedures for FDI applications; and, 2. the relevant measures concerning prior notification and registration? 
 
Answer 
 Every prospective foreign investor needs to submit an  investment report to the Ministry of Knowledge 
Economy prior to making the investment.   
This requirement is in place for the purpose of gat hering statistical information, not for screening 
purposes.   However, if the investor intends to acquire more than 10 percent of the shares in any defense 
company as defined in the presidential decree, the acquisition must be approved by the Ministry of 
Knowledge Economy.  
 When the investment funds are re mitted to Korea following submission of the report, a certificate will 
be issued to the foreign-invested company.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(v) Export finance, guarantees, and insurance 
 
Question : Page 70, Paragraph 123-124  
According to the report, the Export-Import Bank  of Korea provides export guarantees and trade 
finance to Korean firms and foreign buyers to s upport export activities, which cover mainly capital 
goods, such as ships and machinery. The Korean gove rnment also plans to support exports by the 
services industry.  Please could the Korean government provide details  of its specific measures to assist the knowledge-
based services industry to expand their overseas market?  
 
Answer  
 The Korean government is making va rious efforts to improve productiv ity within the service industry, 
as it remains relatively low compared with productivity in the manufacturing industry. 
 We are therefore taking steps to d eregulate the service industry and to assist the industry in utilizing 
Korea’s world-class IT ski lls to foster highly specialized pers onnel. Furthermore, the Export-Import  WT/TPR/M/204/Add.1 
 Page 231 
 
 
  Bank of Korea will expand its tr ade financing activities, which are currently limited to the 
manufacturing industry, to include the service industry as well. 
 
(vi) Export promotion and marketing 
 Question : Page 71, Paragraph 125 
 Most of Korea’s export promotion activities are th e responsibility of the State-owned Korea Trade 
and Investment Promotion Agency  (KOTRA). We  understand that the Korean government has also 
established the Korea Business Center  (KBC) to in tegrate support for the export activities of small 
and medium-sized enterprises.  
 We would appreciate having further information on the exact purpose of the KBC and how it operates.  Answer   KOTRA changed the name of its overseas offices from Korea Trade Center  (KTC) to Korea Business 
Center  (KBC).   The change in name reflects the expanded business scope of KOTRA. In the past, KOTRA was in 
charge of trade promotion, but  now it additionally works to prom ote investment and support Korean 
companies in making overseas investment.  KBC operates in the same fashi on as KTC once did in years past. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Financial assistance (b) Subsidies 
Question : Page 76, Paragraphs 149&150 
 Korea uses grants, tax concessions or concessional loan s to assist a range of agricultural, forestry, 
fishing, manufacturing R&D, and environmental prot ection activities  (no expiry date was indicated 
for the notified schemes except for th e specified items). Furthermore, plans are in place for further tax 
benefits and other incentives as well as the channel ling of unused private-sector funds into corporate 
R&D financing projects.  
1. Could Korea please elaborate further on the measure for funding manufacturing R&D. For 
example, what is the average funding percentage  for each case, and what are the criteria for 
application? 
2. Is there a funding programme specifically d esigned to support the private R&D sector of 
semiconductor and photovoltaic products? 
 Answer to 1  The government supports manufacturing-related R& D programs in the field of source and basic 
technologies.   
Each project has a different funding structure.  Limits on government support depend on which 
organization is responsible for overseeing the project.   WT/TPR/M/204/Add.1 
Page 232  
 
  For joint projects carried out by industry, academia and private research institutes, no more than 
two-thirds of the funds can come from the go vernment. For R&D projects carried out by a single 
entity, the limit is one-third.  Answer to 2 
 
Most of our long-term R&D projects are open to  the participation of businesses, research centers and 
universities regardless of whether they are domestic  or foreign. Foreign and domestic participants 
must go through the same selection pro cess and are entitled to equal consideration. 
 
Publicly funded R&D programs are carried out w ith the aim of supporting the development of basic 
and source technologies, rather than the developmen t of products for particular companies. 
 The Korean government’s support for R&D projects in this area is intended to promote the use of 
technologies that contribute to the public goo d. Korea’s policies regarding R&D projects are 
consistent with those in place in other WTO member countries.   
(iii) Price controls and monitoring 
 
Question : Page 77, Paragraph 155  
1. Besides the 19 items indicated in the Re port, do central and regional governments have 
authority to adjust the electricity rate?  
 2. To cope with the impact of recent price hi kes on fuel generation, what measures, such as 
raising the electricity rate or imposing the fu el adjustment surcharge, could be taken?  
 
Answer to 1  
 To determine the electricity rate, power producers a sk for the approval of the Ministry of Knowledge 
Economy in accordance with the Article 16 of Electr icity Business Act. After the Korea Electricity 
Commission examines the request, the Minister gives final approval.  
 
Answer to 2  If the government receives any approval request for electricity rate adjustment during the second half 
of this year, it will take into account the trends of international energy prices and the possible impacts 
of the changed electricity rate on hou sehold economy to determine the approval.  
 
(iv) State-owned enterprises and privatization 
 
Question : Page 77, Paragraph 156  
1. Is there any timetable for the privatization of the 24 SOEs? 
2. Will there be any limitations on foreign investor s’ participation in the privatization process?  
 
Answer to 1 
 
We are working on the plans for rest ructuring of state-owned agenci es to vitalize the domestic market 
and raising overall efficiency in the public sector. We will implement restructions of several agencies 
considering circumstance of each agency.    WT/TPR/M/204/Add.1 
 Page 233 
 
 
  Answer to 2 
 In principle, Korea will treat foreign and local invest ors on equal terms in the privatization process.  
 
(v) Competition and consumer policy   
 
Question : Page 79, Paragraph 157)  The Report indicates that, "KFTC started implemen ting its ‘Business Review’ in December 2004: 
from December 2004 to December 2007, it reviewed  70 cases, and notified the companies of the 
results."  
 1. Please could Korea explain the purpose and describ e the contents of the "Business Review"?    
2. What effects has the KETC’s review had on companies?   Answer to 1  The purpose of the Business Review is to minimize legal uncertainty and to prevent potential damage that might occur to enterprises in the wake of ex-pos t remedies against violations of law by raising 
transparency and predictability in law enforcement.   
The contents of the Business Review are as follows; 
 Under the Business Review, where an enterprise, before carrying out an act, asks the KFTC to 
examine the legality of the concerned act pursuant  to the Monopoly Regula tion and Fair Trade Act, 
the KFTC examines and then makes an official decision on the matter. 
 
The Business Review applies to any  act covered by the Monopoly Regula tion and Fair Trade Act, the 
Fair Franchise Transaction Act, the Fair Labelin g and Advertising Act and the Fair Subcontract 
Transaction Act that are under KFTC's jurisdiction.   Where a case for the Business Review is filed to th e KFTC, the KFTC is supposed to reply in writing 
to the case within 30 days, determ ining the legality of the case.  
 As the reply is deemed as KFTC's official opini on, no legal action can be taken against the case 
determined to be legal.   
Answer to 2 
 As for businesses, legal risk might be reduced as th e legality of a business activity they're planning to 
conduct can be determined in advance.   In particular, KFTC's Review can be very helpful for small-and medium-sized enterprises which can 
hardly afford to use private legal advisory service.   
IV. TRADE POLICIES BY SECTOR 
(4) E
NERGY  
 
Question : Page 103, Paragraph 43-45 
 We note from the report that in 2006 Korea imported around 96.5%  (2006) of its energy requirements, and oil accounted for 43.6% of its ener gy sources. Furthermore, Korea plans to realize WT/TPR/M/204/Add.1 
Page 234  
 
  "universal energy services" across the nation by 2016 so that no citizen will be excluded from the 
systematic expanded energy welfare scheme.   Could Korea please provide a brief explanation of  the content of the above-mentioned plan and 
elaborate further on its scheme and overall energy policy in response to increasing international oil 
prices. 
 
Answer  
 Korea has plans to increase energy efficiency and reducing energy consumption in response to 
increasing international oil prices.  
 The government will allow more market mechanisms to determin e energy prices, and will promote 
high energy conservation standards. By 2030 Ko rea will have moved toward a service-based 
economy, as opposed to one based on manufacturi ng which consumes large amounts of energy. 
 
Specific measures will also be in place to impr ove energy efficiency and reduce energy consumption 
in four major sectors.    Under the new plan, the government  will ensure that all Koreans have an adequate supply of energy 
to maintain an acceptable standard of living. The pl an aims to help low-income households so that 
they so not spend more than 10 percent of their total income on energy needs.  
 To this end, the government will assist low-in come households in obtaining more energy-efficient 
facilities and appropriate heating and cooling equipment.  
 (6) S
ERVICES  
(v) Telecommunications 
 
Question : Page 121, Paragraph 110  1. Could Korea please provide more information on how the universal service funds provide 
grants for people with low incomes or with disabilities?  
 2. How does the LRIC system calculate the cost of universal service and the ratio of expenses 
that carriers should share? Also, could Korea please provide further details of the LRIC system?  
 
Answer to 1 
 The accession fees and rates of city calls, long-distant calls, internet services and yellow book services are reduced to low income groups, han dicapped persons and veterans. There are some 
differences in rate discounts according to  services and groups who are benefited. 
 
Answer to 2  Facilities-based service providers w ith the revenue of 30 billion KRW or more make contributions 
according to revenue.  
 
An operator that has incurred a loss for three c onsecutive years is entitled to a 50% discount on its 
contribution, and oppositely, obligations for an additional 10 % contribution imposed on service 
providers that require government approval for a user agreement has been abolished as of 
January 2007.  WT/TPR/M/204/Add.1 
 Page 235 
 
 
  The Korean government has adopted the LRIC method for determining the cost of universal service 
since 2004. 
B. Government Report  (WT/TPR/G/204) 
 
II. ECONOMIC DEVELOPMENTS: 2004-2008 
(1) D OMESTIC ECONOMIC SITUATION  
 
Question : Page 7, Paragraph 11  Due to factors such as the surge in  the price of oil, the consumer price index  (CPI) has increased 
rapidly since October 2007, even reaching a high of 5.9 percent in July 2008.  
 What measures are being taken by the Korean government to fight against inflation?  
Answer 
 
While placing emphasis on securing price stability in  its conduct of monetary policy during 2008, the 
Bank of Korea has taken into a ccount the need to bal ance out the influences exercised on growth and 
prices owing to the worsening overseas environment including the steep run-up in international oil 
prices and the international financial market unrest.   
For the year to July, even though price rises had accel erated, the Bank of Korea kept its policy rate 
unchanged at 5%, paying careful attention to the fa ct that the growth of the Korean real economy had 
shown signs of a slowdown.   In August, however, it raised its po licy rate to 5.25%, concerned that inflation expectations would no 
longer remain anchored as the upward pace of prices had  accelerated further, with headline inflation 
nearing 6% in June and July. 
 
(2) E
XTERNAL TRADE AND INVESTMENT  
 
Question : Page 10, Paragraph 21 
 
The report indicates that Korea’s outbound FDI, main ly towards China, has increased rapidly since 
2004, while inward FDI has been decreasing since 2000.  In fact, net foreign direct investment  
(inward FDI minus outward FDI) in 2007 was minus US$ 9.84 billion.  
1. What measures are the Korean government taking to cope with the movement of its industries 
offshore?  
 2. Has any measure been taken to encourage its industries to diversify in terms of the 
destinations of their outbound FDI? 
 Answer to 1  An increase in Korean companies' mo ving to overseas markets is inevit able in order to enhance the 
domestic industry, stabilize the macro economy, and expand growth potential. 
 
Considering concerns over the hollowing out of in dustries, we have encouraged companies to go 
abroad in a manner that can contribute to vitalizin g the domestic economy, and to this end, we have 
offered a wide arrange of support such as deregul ation, information on opportunities, consulting and 
financial support, etc. WT/TPR/M/204/Add.1 
Page 236  
 
   
In principle, companies are responsible for thei r movement offshore; however, the government will 
assist SMEs with auxiliary support.  
For large companies, the government is working to improve conditions so as to facilitate business 
abroad such measures have taken the form  of deregulation and package deals.  
 
For SMEs, the government is in the process of  establishing a systematic support base related 
measures include the dissemination of pertinen t information, assistance through pro-business 
policies, and nurturing the efforts of SMEs to recruit skilled personnel.  
Answer to 2 
 The Korean government policy on outbound FDI is focused on creating conditions for autonomous 
investment decision by easing regulations, providi ng information and offering administrative support 
Therefore, the government does not take any measu re to diversify regions for outward investment. 
 
Regional ratio in outward investment (2007): Asia 58.7% (China 39.0%), Central & South America 
5.1%, Europe 15.7%,  North America 16.7%, others 3.9% 
 
CHILE
 
 
OBSERVACIONES RECAPITULATIVAS 4) E
VOLUCIÓN DE LAS POLÍTICAS SECTORIALES  
 Question 
 El párrafo 19 del Informe de la Secretaría señ ala que se han hecho esfue rzos para reducir la 
sobrepesca, a pesar de que se han seguido otorgando subvenciones relacionadas con la pesca y se ha 
aumentado la captura total permisible en aguas co reanas.  Asimismo, se han establecido derechos de 
ajuste para nueve especies de peces con el fin de proteger a los productores nacionales de alimentos 
marinos.   Aparte de los derechos de ajuste , ¿Se han hecho otro tipo de esfuerz os adicionales para reducir la 
sobrepesca? ¿Cuáles serían estos y en qué consistirían?  
 
Answer 
 Korea's fisheries policy is based on maintaini ng sustainable fisheries by reducing over-fishing 
through the efficient fisheries management. Total Allowable Catch  (TAC) system is one of the 
elements of the fisheries management.  TAC has been set up based on the scientific stock assessment, 
and species-specific quotas are allocated by vessels every year.  
 Besides the TAC system, Korea has vessel registries, control of lic ense and numbers of vessels, report 
and inspection of landing volumes, and other stock measurement measures as fisheries management.  
 "The increase of the total allowable catch" in  the WTO Secretariat's report does not mean only the 
increase in the total allowable catch volume but the increase of the number of the species under the 
TAC system. Accordingly, the total allowable catch c ould be increased by the enlargement of the TAC 
species scope.  Korea has experienced that fisheries resources have been recovering by various fisheries 
management measures while granting some  subsidies to fishing communities. 
  WT/TPR/M/204/Add.1 
 Page 237 
 
 
  In 1999, Korea established the TAC system for f our species such as chub mackerel, jack mackerel, 
pacific sardine and red snow crab. As a result of  the fulfillment of the system, there were some 
increases in the biomes or the length of all the TAC species in Korean waters. 
 In 2008, ten species are under the TAC system . They are chub mackerel, jack mackerel, pacific 
sardine, red snow crab, snow crab, purplish Washi ngton clam, pen shell, spiny top shell, blue crab 
and common squid.   
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
iii) Aranceles Question 
 ¿Cuándo tiene Corea contemplado cons olidar el 100% de su arancel? 
 Answer  Korea’s unbound industria l goods are determined at a mini mum level and cover only three cases: 
First, goods for which import restriction is necessary to control balance of payments, Second, goods 
from sophisticated industries which requires industr ial protection, Third, goods like pharmaceuticals 
whose competitiveness in Korea is weak.  
 
About 91.5% of the total tariff lines of industr ial goods are bound and applied rates for unbound 
products are 8% as basic rates.  Expanding the coverage of bound products is  under discussion in the current WTO.DDA 
negotiations; Korea expects to widen the coverage  according to the results of the negotiations. 
Question 
 
Question  Con respecto a los "aranceles flexibles"  (párrafo 36), ¿podría Corea explicar sobre qué base toma las 
decisiones de variabilidad?  ¿Piensa Corea, rebaja r o eliminar estos aranceles en el corto plazo, 
independiente de lo que suceda en la Ronda Doha?   
Answer 
 
Please refer to the answer to Switzerland’s question (Flexible tariffs).  
viii) Medidas especiales 
 
Question  
En el párrafo 73 se señala que la legislación de Core a en materia de medidas comerciales especiales y 
las prácticas de la KTC no han tenido cambios de importancia durante el período objeto de examen.  
Una modificación de comienzos de 2008 estipuló que  el proceso de examen de los derechos 
antidumping debe llevarse a cabo de manera idénti ca a la investigación inicial y  se modificó el 
método de cálculo del margen de dumping. ¿Podría e xplicar en qué consiste tal modificación y cómo 
se calcula el margen de dumping?  
 
Answer 
 Please refer to the answer to China 2nd set’s question 2 (contingency measure). WT/TPR/M/204/Add.1 
Page 238  
 
   
ix) Normas y otras prescripciones técnicas.  
 
Question  
¿Tiene Corea algún mecanismo de coordinación con t odas las instituciones que elaboran reglamentos 
técnicos y procedimientos de ev aluación de la conformidad?  
 
Answer 
 
The coordination system for all institutions to use international standards for adoption of technical 
rules and procedures for conformity assessment is le gally stipulated in Article 20 and 21 of the 
National Standardization Act.   According to the National Standardization Act, th e National Standards Council coordinates the issues 
on national standards among relevant authorities and reviews implementation of the National 
Standardization Act. 
 
Question  Además del sistema de alerta al exportador, ¿existe algún otro meca nismo de coordinación sobre estos 
temas con el sector exportador? 
 
Answer 
 Relevant organizations or federations including th e exports sector are a member of TBT Technical 
Committees. The Committees, which are classified by 10 sectors, are operated by KATS for the 
purpose of sharing information and coordinating specific issues. 
 
Question  ¿En relación a lo indicado en el párrafo 92, ex iste algún sitio Web donde sea posible encontrar los 
reglamentos técnicos y procedimientos de eval uación de la conformidad obligatorios que deben 
cumplir los productos para poder ser comercializados en Corea?   
Answer 
 
The Korean Agency for Technology and Standards (K ATS) is under constructing a website to improve 
the information accessibility of interested parties.  It plans to be served from the early 2009. 
 
Question   a) En relación a los Acuerdos de Reconoc imiento Mutuo suscritos  (párrafo 95), ¿son 
estos costosos de implementar?  
 b) ¿Qué requisitos deben cumplir los organi smos que evalúan la conformidad para ser 
designados por la autoridad del país exportador?  
 c) ¿Cómo se administran los incumplimientos?   d) ¿Existe la posibilidad de que terceros países puedan incorporarse?  
 
Answer to a 
 The administrative costs of implementation of MRA will be minimal.    WT/TPR/M/204/Add.1 
 Page 239 
 
 
  Answer to b 
 There are two requirements for organizations that assess  conformity need to meet to be appointed by 
the authorities of the exporting coun try. When the conformity assessment body is a testing body, it is 
appointed after assessing according to ISO/IEC 17 025. When the conformity assessment body is a 
certifying body, it is appointed after assessing accord ing to ISO/IEC 17011. However, for both cases, 
it is required to have MRA between countries. With  Chile, the first stage of MRA was signed in 
June 2008.  Answer to c 
 
For non-compliance cases, it can be co rrected after complementation. 
 Answer to d  
It is possible for third party countries to jo in in, but currently Korea is discussing with APEC 
countries for MRAs. 
 
x) Contratación pública 
 
Question 
 
9. La Ley de Promoción de Productos Amigabl es con el Medio Ambiente  (environmentally 
friendly products) de 2004 establece que los organi smos gubernamentales y empresas estatales deben 
priorizar en sus contrataciones los productos amigab les con el medio ambiente. Dicha ley -que entró 
en vigencia en julio de 2005-,   se aplica tanto a organismos del Gobierno Central como a organismos 
de la Administración Local y a empresas vinculadas c on dichos organismos.   La Ley hace obligatoria 
la adquisición de productos amigables con el medio ambiente, pero establece excepciones por motivos 
de calidad y disponibilidad, así como  para adquisiciones de emergencia.  
 ¿Podría la Corea proporcionar mayores anteceden tes sobre la forma en que los organismos 
gubernamentales y las empresas estatales determin an -cuando realizan contrataciones públicas de 
bienes y servicios-, cuáles productos son amigables para el medio ambiente?  
 ¿Cuáles son los criterios utilizados?  
Answer 
 
Environmentally friendly products are determin ed by whether they are eco-labeling products, 
certified products for Good Recycling, or other announced products which are adequate for the 
standards of environmen tally friendly products 
 
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO . 
Política de competencia y de  consumo  
Question  10. ¿Contemplan las leyes de competencia de Corea programas de denuncias compensadas para 
mejorar la detección y fiscalización de los carteles duros?  
 
Answer 
 Korea has two programs in place.  WT/TPR/M/204/Add.1 
Page 240  
 
  First, we are running the Leniency Program pursuant to Article 22-2 of the Monopoly Regulation and 
Fair Trade Act and Article 35 of the Enforcement Decree of the MRFTA. Under this Program, where 
an enterprise reports to the KFTC that it has been  engaged in a cartel activity, submits related 
evidence and cooperates with KFTC's investigation,  the KFTC gives it mitigated corrective measures 
and surcharge or exemption from such measures.  
 
The first leniency applicant is granted exempti on from corrective measures and surcharge and the 
second leniency applicant receives 50% of reduction in surcharge.   Second, we are operating the Reward for Reporting Program pursuant to Article 64-2 of the MRFTA 
and Article 64-6 of the Enforcement Decree. Under th is Program, where a third party which has not 
been engaged in a cartel activity reports the cartel to the KFTC and submits related evidence, the KFTC can grant a reward worth up to one billion won for such reporting. 
 
Question 
 
¿Existe un programa en Corea para la paulatin a eliminación de las excepciones a la ley de 
competencia?   
Answer 
 
Korea does not grant antitrust exemptions to specific industries. But the Monopoly Regulation and 
Fair Trade Act does not apply to i) legitimate acts  pursuant to laws and regul ations  (Article 58), 
ii) acts deemed to be legitimate exercises of inte llectual property rights including the copy right  
(Article 59) and iii) acts of a ssociations  (Article 60).  
 
The KFTC has been making continuous efforts to improve anti-competitive systems found in 
individual statutes.   As part of such efforts, the KFTC enacted the Omn ibus Cartel Repeal Act in 1999 to eliminate 20 
cartels and overhaul 18 laws and regulations.  
The Act abolished fee cartels in 9 certified professions including lawyer, and improved the collective 
optional contract system for small-  and medium-sized enterprises.  
 
Since 2003, pursuing market reform, the KFTC has been actively carrying out regulatory reform 
through which to improve anti-competitive regula tions existing under m any laws and subordinate 
statutes. 
 Also, the KFTC has been making strenuous effo rts to prevent other go vernment agencies from 
establishing or reinforcing anti-competitive regulations  by having prior consultations with them.  
 
Question 
 
¿Existe separación entre la agencia investigadora y fiscalizadora y el organismo encargado de aplicar 
la ley de competencia y determinar sanciones?   
Answer 
 
In Korea, the KFTC is a sole authority in char ge of competition law enforcement. The KFTC is 
comprised of the Secretariat responsible for in vestigating competition cases and the Committee for 
determining whether or not to impose sanctions. Therefore, the investigating agency and the body in 
charge of determining sanctions are not separated in Korea.   WT/TPR/M/204/Add.1 
 Page 241 
 
 
  INDIA  
Question 1 
WTO Secretariat in Chapter II paragraph 35 observes: 
"The negotiation of FTAs has been contentious.  It has aroused public interest and debate and 
politicized Korea’s international economic policy and given rise to strong opposition by domestic 
interest groups, thus obliging the authorities to a dopt adjustment measures in support of companies 
that seem seriously injured by FTA-created import competition." 
What are the measures that have been taken by Korea to educate the Korean citizens about the 
benefits of bilateral FTA agreements?  
Answer 
In order to promote the public understanding on the benefits of FTAs, the Korean government has 
carried out various activities including distri buting brochures and books on the FTAs Korea has 
concluded, organizing public hearings and semi nars, participating in lectures, operating FTA 
Homepage.  
Question 2 The inward flow of FDI has reduced from 11,243 million USD in 2006 to 10,514 million USD in 
2007.  Clearly the steps taken for improving the overall investment environment is not building 
enough confidence among the foreign investor. 
 
 (a) What is the Korean strategy to attract more investment?  (b) What are the measures taken by the Ko rean government to attract FDI in retailing 
sector?  
 (c) Does Korea have any plans to open the television and radio broadcasting sectors to 
foreign direct investment?  
Answer to (a) 
Korea will enhance its efforts to improve the invest ment environment, both in terms of business and 
living conditions. 
Korea is also making efforts to create new invest ment opportunities in such  industries as energy, 
environment and IT and to reduce business costs through tax cuts. 
Answer to (b) Korea has been making efforts to promote FDI in retailing sector and the level of openness in 
retailing sector is relatively high. Inward FDI has been facilitated in that Tesco is currently the 
number two company in retailing sector in terms of the number of stores. 
Answer to (c) There is no plan to liberalize FDI in the terrestrial broadcasting (radio and TV) sector. WT/TPR/M/204/Add.1 
Page 242  
 
  Question 3 
WTO Secretariat in Chapter III paragraph 187 observes: "According to a major trading partner, the Copyright  Act amendments still leave unclear the scope of 
the underlying liability of service providers and the li mitations on, and exceptions from, liability.  The 
new law does not address previous shortcomings in sound recording protection and private copying 
exceptions….." 
 (a) What is the next step in Korea’s IP R strategy to refine its copyright laws?  
 (b) Is there any structured dialogue in place with foreign authorities and Korean right-
holders?  
 (c) How effective is Korean system agains t counterfeit and pirate d goods at importation 
and transit? 
 (d) What are the steps that have been take n to raise awareness against violation of all 
types of IP rights? 
Answer to a) 
As copyright infringement over the internet is  arising recently, the Korean government plans to 
amend the related act which provides that OSP sha ll be liable for further copyright protection.  
Answer to b) Direct channel between foreign authorities and Kore an right-holders does not exist. However, Korea 
is implementing the policy to build and fac ilitate the channel of negotiations grounded on MOU 
between the Korea Copyright Commission and th e foreign government which circulates Korean 
copyright work. Korea Copyright Commission carries out the measures which includes setting up and 
operating overseas offices in Beijing and Bangkok ai med to protect Korean copyright and facilitate 
the international exchange in this field.  
Answer to c) The current Copyright Act provides that transmission of the counterfeit and pirated goods on the web 
or importation of the counterfeit and pirated goods to  distribute in Korea are copyright infringement. 
In such infringement, it is possible that to claim fo r the damages at the civil court. The pirate can be 
sentenced to imprisonment not exceeding 5 years and a fine not exceeding 50 million won.  
Possible dispositions by Customs Act are following:   1. Suspension of customs clearance by official authority (Article 237)  
 2. Suspension of customs clearance by cl aims of copyright holders (Article 235)  
Answer to d) 
The Ministry of Culture, Sports and Tourism which administers copyright and related works in Korea 
is implementing the continuous copyright educa tion and publicity activities to the public. Recently 
Considering that online is main route of the copyri ght infringement, the education for the university 
students and the teenagers who are the target consumers on the web is reinforced.   WT/TPR/M/204/Add.1 
 Page 243 
 
 
  Question 4 
WTO Secretariat in Chapter IV paragraph 6  observes: 
"Despite receiving relatively high protection, agricult ure’s GDP share has continued to fall.  The share 
(including forestry and fishing) declined from 3.8% in 2003 to 3.3% in 2006; it also accounted for a declining share of total employment (7.7% in 2006 ).  The sector’s labour productivity is little more 
than half of the national average.  Agriculture’s  low labour productivity reflects several factors, 
including Korea’s high proportion of older farmer s, small-scale farming, and lack of capital 
investment, which hampers its overall efficiency, an d thus competitiveness.  Despite intensive efforts 
to increase the cultivated area through drainage, irri gation, and reclamation, the cultivated area has 
tended to decline due to industria l and urban development.  In 2005, a quarter of the value of the 
agricultural production consisted of rice.  While self-sufficiency h as been attained for some major 
products, such as rice, the volume of Korean imports of agricultural products has increased strongly, inter alia, as a result of rapid income growth, ch anges in dietary patterns, and agricultural trade 
liberalization.  Korea is a significant net food importer.   In 2007, its agricultural trade deficit could hit 
a record US$13.65 billion fuelled by a rise in in ternational grain prices and high domestic demand." 
The Korean agricultural rates are ve ry high.  Despite being a leader in exports, Korea still remains 
very protective about its auto and agri-industries. 
 
(a) Will Korea in future change its polic y towards these two sectors and open up?  
Answer 
Agriculture 
Korea has maintained protection in agricultural sector considering vulnerabilities of agriculture and 
food security. However we are changing policy prioty is changed form protection to strengthen thea 
competitiveness through restructuring. Korea will ope n market for agriculture in accordance of DDA 
and FTAs negotiation outcomes. 
Auto industry 
Korea removed all barriers to the import of foreign vehicles (under memorandums of understanding 
concluded between Korea and the United States in the 1990s).  
Question 5 
WTO Secretariat in Chapter IV paragraph 74 observes: 
"In the ongoing negotiations, Korea submitted a revise d offer in May 2005, under which it improved 
its sector-specific section in: business services, distri bution, education, telecommunications, transport, 
and financial services.  It also offered to wide n the scope of specific commitments by addressing 
intra-corporate transferees and contractual service suppliers in its horizontal mode 4 section." 
Korean people would benefit from services liberal ization but the Korean domestic policy does not 
support liberalization in the English language t eaching areas, doctors, nurses and other professionals. 
 
 (a) Does Korea have any plans to open up these areas at least bilaterally though 
Economic Partnership Agreement to give access to the professionals?  WT/TPR/M/204/Add.1 
Page 244  
 
   (b) State interventions persist in key areas such as telecommunication and financial 
sectors.  Is Korea planning to have any st ructural changes for privatization of these 
sectors to improve overall competitiveness?  
Answer to (a) 
The Korean government has no plan to open mode 4 section, which includes doctors, nurses and 
other healthcare professionals.  
Korea is reviewing plans to expand the origins of English language assistance teachers from the 
native countries to countries which use English as an official language. Whether to give access 
through Economic Partnership Agreements can be one of the concrete plans of this expansion. 
However, the coverage of commitm ents for English language assistance teachers will be determined 
according to the domestic policies including expansion of origin countries and establishment of 
qualification criteria in order to protect the qual ity of English language  assistance teachers. 
Answer to (b) Korean telecommunication market including KT(June 2002)  is completely privatized. In addition, the 
Korea government is pursuing the privatization of state-owned banks by taking into account of market 
condition. 
Question 6 
(Report by Republic of Korea) paragraph 25 states: "Since the 1997 financial crisis, the Korean govern ment has undertaken comprehensive corporate 
structuring.  As a result, the debt-to-equity ratio  has fallen from nearly 400% before the 1997 crisis to 
around 100% in 2004.  Even though corporate governance has been significantly improved since the 
1997 crisis, Korea has taken further steps to upgrad e corporate governance.  In 2005, class action suits 
in securities-related cases against large firms with ass ets of at least 2 trillion won were allowed, and 
this permission was extended to cover all listed fi rms in 2007.  In addition, amendments to the 
Commercial Act were proposed in 2007 to incr ease the accountability of managers and controlling 
shareholders to minority shareholders.  The pr oposed amendments include, among other things, a 
prohibition against corporate directors using their corporate authority for their own or a third party’s 
benefit." 
 (a) When is the proposed amendment to the Commercial Act (2007) going to be 
implemented?  
 (b) What are the benefits that are expect ed to accrue from the proposed amendments to 
RoK?  
Answer to (a) The proposed amendment to the Commercial Act(2007)  was abolished automatically when the term of 
the 17th National Assembly ended. The amendmen t to the Commercial Act(2008), which has been 
submitted to the National Assembly in October, 200 8 is a revised and supplemented version. If passed 
this year, the amended Commercial Act(2008) will take effect in February, 2009.  
The proposed amendment of 2008 has been submitted to the 18th National Assembly after measures 
for improving business environment have been co mplemented by removing the minimum capital 
requirement (50 million Korean won for a corpor ation) and streamlining the procedure of 
establishing a small company.   WT/TPR/M/204/Add.1 
 Page 245 
 
 
  Answer to (b) 
The amendment will work in the best interests of the corporation and sha reholders through improved 
corporate governance and business transparency.  
Where a company makes a transaction, the trans action with director's spouse and his/her direct 
family, as well as the director is required to obt ain an authorization from the board of directors. The 
requirement for fairness of the tr ansaction has been stipulated. The amendment also prohibits 
unlawful transactions which undermine the interest of the company using the information he obtained 
in the course of business, in order to promot e the interests of the company and to protect the 
shareholders.  
Different types of companies – limited partnership and limited liability company – have been adopted 
to promote the management of and investment in venture companies. 
By introducing the executive officers system, the revised Act improves corporate governance to satisfy 
global standards. 
Reflecting the dematerialization trend of secu rities and the development of information and 
communications technology, stocks and debentures can be registered electronically for circulation, 
and the adoption of the electronic voting system in  the shareholders' meeting will cut costs and 
enhance shareholders' convenien ce of exercising their rights.  
Companies have been given more autonomy in financia l management to help them raise funds more 
easily by allowing the issuance of va rious types of stocks and debentures. 
Question 7 
(Report by Republic of Korea) paragraph 31 states: 
"Since the inception of the WTO, Korea has faithfu lly implemented its commitments and obligations 
under the WTO.  Korea has been successful in bringi ng its laws and regulations into conformity with 
WTO norms.  In some areas, Korea has even undert aken voluntary liberalization and reform measures 
beyond the level of its commitments." 
 (a) What are the areas in which Korea is planning to voluntarily liberalize and bring 
about reform measures beyond the le vels of its WTO commitments?  
Answer 
In trade in goods, Korea has already implemented most of its commitments from the Uruguay Round. 
A further decrease in tariff w ill take place in 2009 when the remainder of the Uruguay Round 
commitments are to be fully implemented. In addition, the further simplification of tariff rate 
structures including some agricultural products will  be implemented according to the results of the 
DDA negotiations. 
In the services sector, Korea has made various effo rts to improve productivity. Openness has been the 
key strategy in advancing the nation’s services i ndustry. Korea has liberalized its services market in 
line with Korea’s GATS commitments and has libera lized beyond its GATS commitments in some 
areas. For example, Korea has removed 80% of the ceiling on foreign indirect investment in facilities-
based communication services.  WT/TPR/M/204/Add.1 
Page 246  
 
  Question 8 
(Report by Republic of Korea) paragraph 32 states: "……With a view to providing substantial market  access for products from least-developed countries 
(LDCs), Korea currently provides LDCs with uni lateral (non-reciprocal) duty-free and quota-free 
preference for 75% of its national tariff lines." 
(a) Which are the countries benefiting out of Korea’s LDCs policy for providing 
substantial market access?  
Answer 
Korea provides DFQF preference to 50 LDCs which are designated by the UN, and among those 
Zambia, Laos and Malawi are the greatest beneficiaries of the policy  
Question 9 
What steps have been taken to reduce non- tariff barriers for free flow of trade?  
Answer 
Korea is taking initiative to deregulate economic sector in many ways and the customs clearance 
procedure has been significantly improved.  
Please refer to the Korean government report(WT/TPR/G/204 II-(3)) and the Secretariat 
report(WT/TPR/S/204, III-(2) (i)). 
Question 10 
WTO Secretariat in Summary Observations paragraph 9 observes: "The 2008 customs tariff remains relatively complex,  involving a multiplicity of rates (83 ad valorem, 
41 alternate duties) often having small rate differences and involving decimal points." 
How does Korea justify rate differences at the level of decimal points? Will not  small rate differences 
at the level of decimal points reduce tran sparency of the customs tariff regime?  
Answer 
Korea reduces tariffs through a linear cut durin g implementation period according to the UR 
commitment. As a result, Korea’s tariffs  have some decimal points differences. 
Korea thinks decimal points in bound rates will cau se little problem as electronic clearance system is 
in place. And in accordance with the outcome of  the  DDA negotiations, we will further simplify. 
Question 11 
WTO Secretariat in Chapter II paragraph 16 observes: "By December 2007, the Regulatory Reform Task Force (RRTF) under the Prime Minister's Office 
had drafted 1,822 detailed improve ment plans relating to 68 strategic areas;  the RRTF facilitates 
reform of "bundle regulations" that involve multip le ministries, rather than single regulations."  WT/TPR/M/204/Add.1 
 Page 247 
 
 
  What is the roadmap for implementing these improvement plans?   
Answer 
1,822 bundle regulations out of 1,340 were completely implemented by December 2007 and 
482 regulations are to be pursued c ontinuously over the mid and long term.  
Since 2008, RRTF has been abolished and Na tional Competitiveness Committee undertakes the 
reform of regulations with the largest impact  on society and the economy and bulk regulations 
involving multiple ministries. 
Question 12  WTO Secretariat in Chapter II paragraph 18 observes: "However, accessibility of legislation and sub-le gal requirements in English remains a significant 
issue for foreign stakeholders:  while MOLEG has pr ovided English translation of many Korean laws, 
many sub-legal regulations remain available only in Korean." 
By when is this problem expected  to be substantially solved?  
Answer  
MOLEG has been continuously making efforts to  provide standard and systematic accessibility of 
legislation in English since it published ‘Current Laws of the Republic of Korea’ in 1982.  
In this year when the new administration wa s launched, MOLEG is making efforts to expand 
provision of services on legislation in English to  foreign companies who are interested to invest in 
Korea. In addition, each ministry is planning to expand provision of services on their legislations in 
English. 
Question 13  WTO Secretariat in Chapter III paragraph 36 observes: 
"Korea applies temporary higher MFN duties (termed as flexible tariffs) than those set at the customs 
tariff schedule (section (a) above);  the flexible tariffs mechanis m includes adjustment, safeguard, 
special safeguard, and seasonal duties. Through a numb er of different mechanisms and rationales, the 
system allows the authorities to increase or decr ease certain tariffs at their discretion, with 
differentials of as much as 40% a bove or below a fixed tariff rate. Th is provides considerable scope to 
encourage or discourage imports of particular items, for inflation-control and industrial policy 
purposes." 
Such a system would engender uncertainty and u npredictability about customs tariff and would be 
detrimental to foreign trade.  
What policy objectives are sought to be achieved by  the system of flexible tariffs and why these 
objectives cannot be achieved by more efficient means? 
Answer  
Please refer to the answer to Switzerland’s question (tariff). WT/TPR/M/204/Add.1 
Page 248  
 
  Question 14 
WTO Secretariat in Chapter III paragraph 156 observes: "State involvement in the economy (Table III.5) persis ts;  privatization, particularly in the services 
sector (Chapter IV), was put virtuall y on hold during the review period." 
Why is the programme on privatization put on hold and what are the plans to revive it?  Answer  
Please refer to the answer to Turkey’s question (III (4) (iv)). 
Question 15 
WTO Secretariat in Chapter IV paragraph 5 observes: "Services are characterized by relatively low labour productivity (little more than half the level in 
manufacturing, for example) and declining growth in  total factor productivity.  This poor productivity 
performance is partly due to the lack of competition owing to, inter alia , state-ownership and 
excessive regulations, including restricti ons on foreign direct investment."   
What are the plans for easing restrictions on the services sector?  
Answer  
The Korean government adopted "Regulatory reform"  as major strategy of "Service PROGRESS." 
Productivity, Regulatory reform, Openness, Global st andard, Rivalry, Environmental improvement, 
Specialization, Scale economy 
We will consistently push forward further refor ming the anti-competitive regulations to raise 
productivity of the service sector. In broadcas ting and communications sector, market access 
barriers, related to market entrance, ownersh ip and business, will be reduced gradually.  
 
We will overhaul regulations to facilitate investme nt and business start-ups in the service industry. 
The government will encourage foreign educational in stitutions to establish institutions in Korea by 
providing various supports. For example, we will allow remittance of those institutions to their 
countries  
PAKISTAN
 
 Question 
 1) Korea maintains quantitative restrictions on import of Rice despite very high bound tariffs. 
We would appreciate if the Government of Kore a could let us know any plans to review such 
quantitative restrictions?   Answer  The special treatment for rice in  accordance with Annex 5 of Ag reement of Agriculture has been 
extended for another ten years until 2014. This  was the result of the negotiation in 2004.  WT/TPR/M/204/Add.1 
 Page 249 
 
 
  Question 
 2) Korea has a liberal trade policy regime; howev er there are certain issues such as strict SPS 
measures  which are acting as quasi non-tariff barriers for countries like Pakistan where the technology and processing facilities are less developed.  Could the Korean government apprise us with 
any plans for mutual cooperation/technical assistance in order to overcome these technological gaps?  
 
Answer 
 Korea is implementing cooperative projects to e nhance agricultural technology with Asian developing 
countries, such as Mongolia, Vietnam, Indonesia, etc. But there are no projects of cooperation with 
Pakistan in the area of agricultural technology.   The Korean government will consider whether to carry out agricultural cooperation project if 
Pakistan makes requests for cooperatio n through diplomatic channels. 
 
THAILAND
 
 
Investment and services 
 
Question 
 
1. On page vii of the Report by the Secretar iat, under Summary Observations, paragraph 5 on 
Economic Environment, it is stated that 3 sectors re main completely closed to foreign investors and 
that 26 are partially restricted.  While on page 36, Table II.4 on FDI restricted sectors, 2008, it is mentioned that only 2 sectors are wholly closed to FD I, while 25 are partially closed.  Please clarify 
this discrepancy.  
 
Answer 
 
In response to the query about FDI restrictions in th e Report by the Secretariat, the information in 
Table II.4, which appears on page 36, is incorrect. Korea has informed the Secretariat of the error 
and requested that the table be amended accordingly.   
Question 
 2. On page 16 of the Report by the Secretariat, it is mentioned that there is low productivity in the services sector which impedes ROK’s growth.  Kindly share the reasons behind such low productivity in the services sector.  
 
Answer 
 
One of the major reasons for the low productivity in the service sector is that the share of knowledge-
based service industry which creates value-added jobs is  low in Korea. For your reference, the share 
of knowledge-based industry in GDP is 27.8% in Korea, compared with 35.6% in the U.S., 38% in 
Japan, 40.7% in the U.K. and 33.1% in France.  Job creation is highly focused in such areas as  wholesale, retailing, restaurants, and hotels which 
have low value-added.   
In addition, the share of self-employed businesses is high in the service sector, hence the R&D 
investment is low. For your reference, the sha re of service industry in the total private R&D WT/TPR/M/204/Add.1 
Page 250  
 
  investment is 6.9% in 2004, compared with 36.1% in  the U.S., 21.1% in the U.K., 9.1% in Japan. The 
average of OECD countries is 23.7% 
 
Question 
 
3. On page 91 of the Report by the Secretaria t, it is mentioned that ROK has unilaterally 
liberalized its foreign ownership regime in telecommunications beyond its GATS commitments.  
Please outline which activities have been unilaterally liberalized in the telecommunications sector?  
 
Answer 
 
Please refer to the answer to HongKong China’s question 5. 
 Question 
 4. On page 121 of the Report by the Secretariat,  under broadcasting services, please elaborate on 
the screening quota system applicable to foreign suppliers.  
 
Answer 
 Terrestrial broadcasters(radio and TV) system opera tors(SO), satellite service operators, program 
providers(PP) shall include specific ratio of mo vies, animations and music that are produced in 
Korea in their programs a ccording to the law.  
 
Terrestrial broadcasters shall include more than 80% of the Korean programs in their total 
programs, 25% for movies, 60% for music and 45% for animation.   Program providers(PP) shall include more t han 40% of the Korean programs and system 
operators(SO) as well as satellite service operators shall include more than 50%, 25% for movies, 
60% for music and 35% for animation.  
 
FTA compensation fund 
 
Question 
 
5. How and by what means does Korea allocate the FTA Compensation Fund to the affected 
sectors?  Would this Compensation Fund be counted  in the Domestic Support calculations to be 
reported to the WTO?  
 
Answer 
 
Compensation measures include direct payment for loss form the FTA concessions and support for 
retiring farms which are consistent with Agreemen t of Agriculture and Korea’s UR Domestic Support 
Commitments. The Agricultural FTA Compensation Fund will be included in the domestic support 
calculations in agriculture, which will be reported to the WTO after being classified by the nature of 
each project. 
 
Tariff quota administration 
 
Question 
 
6. Since tariff quotas are administered by STEs or i ndustrial associations with a current fill ratio 
of approximately 69 percent, is it possible to explai n how the quota is administered and if there is any 
plan to reform the quota administration so th at a higher fill ratio can be achieved?   WT/TPR/M/204/Add.1 
 Page 251 
 
 
  Answer 
 
The following is Korea's TRQ administration methods by items:  
  - State trading(allocation by designated agencies): rice, garlic, red pepper, mung 
bean/red bean etc  
 - Auctioning: powder milk, condensed milk, chestnut etc.   - Allocation on real demand : bird's eggs, powder of bones, fruit trees, seed potatoes, 
milch cows, swine, etc.  
  Combination : soybean, ginger, sesame, onion etc.  
 
Even though TRQ administration method are not dir ectly related to the TRQ quota fill rate, Korea 
will consider auctioning to be applied on some STE products. 
 
Question 
 
7. We note from page 54, paragraph 60 of the S ecretariat Report that different mechanisms are 
used for quota allocation and administration depe nding on the product.  In this regard, we would 
appreciate it if ROK could clarify the mechanisms  used for quota allocation and administration for 
major agricultural products such as rice and cassava products.  
 
Answer  
For rice, quota is allocated and administered by  a designated agency (Ko rea Agro-Fisheries Trade 
Corporation) while quota allocation for cassava (manioc) is made to end users 
 For more detailed information, please refer to the WTO document (WT/LET/492, 
G/AG/N/KOR 1).  
 Net agricultural support  
Question 
 
8. Even though a shift from the previously high Producer Support through product-specific 
Market Price Support to Direct Payment Systems can be considered more market-oriented, the Income Support System is still linked with produc tion and input use.  ROK’s net agricultural support 
is the highest among the OECD Members.  Is there an y plan to reform this direct payment system to 
be less trade distorting?  
 
Answer 
 
In order to reform the direct payment system more market-oriented, Korea adopted the direct 
payment for rice income, which is currently at its initial stage. This system  is partially linked to 
production, but it is definitely less production-distorting than the past price support policies. Korea is 
exploring ways to improve the current income suppor t policies in a multifaceted manner, and it also 
plans to reform the agriculture support system in accordance with DDA Agriculture negotiations.  
 WT/TPR/M/204/Add.1 
Page 252  
 
  High applied MFN tariff in agricultural products 
 
Question 
 
9. Given the higher demand in agricultural products, witnessed by the higher imports of 
agricultural products to ROK and the decline in  cultivated area due to urban and industrial 
development, is the government considering reform on the tariff structure for agricultural products?  
 
Answer 
 
Korea plans to reform its tariff structure for agr icultural products depending the results of the 
ongoing DDA agriculture negotiations.  Standards and other technical requirements  
Question 
 
10. We note from page 60, paragraph 81 of the Re port by the Secretariat that roughly 9 per cent 
of Korean standards have been estab lished without any reference to in ternational standards.  In this 
regard, we would be interested to know what sp ecific groups or product categories are covered by 
these non-harmonized standards.  Does ROK envisag e that the remaining non-harmonized standards 
can be more fully harmonized with intern ational standards in the near future?  
 
Answer 
 
Regarding Korea-specific standards, there are difficu lties in identifying specific groups or product 
categories covered by these standards, which have a wide range of sectors.  
 The corresponding international standards for Korea- specific do not exist. If those international 
standards are developed or their completion is imminent, Korea would affirmatively take into 
consideration of harmonizing Korea-specific st andards with those international standards.  
 Question 
 11. According to pages 60 and 61 (paragraphs 80, 81 and 86) of the Report by the Secretariat, the 
Korean standardization system consists of technical  regulations (ma ndatory standards), which in 2006 
represented 15 per cent of total KSs,  and voluntary standards set by KATS.  Furthermore, the Report 
states that the number of Korean industrial standards has doubled over the last five years.  That said, 
one of the key policy goals of national standards is to remove technical barriers to trade, and it is 
further maintained that "Korea-speci fic" standards are not prepared, adopted or applied with a view to 
creating unnecessary obstacles to international trade.     
(1) In view of the burgeoning increase in the number of industrial standards adopted in 
the past years, could ROK confirm that such a rapid increase is not in any way 
synonymous with heightened restriction on foreign goods?  
(2) Please clarify whether, for any imported products failing to conform to voluntary 
standards set by KATS, this will put them at  a disadvantage, or raise the possibility of 
the said products being less favourably treated vis-à-vis locally produced goods. 
 
Answer to (1)  
 
The main reason behind the increase in the number of standards is the increase of newly adopted 
Korean industrial standards on basis of ISO/IEC international standards. In accordance with the  WT/TPR/M/204/Add.1 
 Page 253 
 
 
  Code of Good Practice for the Preparation, Adop tion and Application of Standards, KATS does not 
develop standards with a view to creating un necessary obstacles to international trade.  
 
Answer to (2)  
 
Korean industrial standards are not prepared or adopted for the purpose of according differential 
treatment to local products and any imported products.  
 
Question  
12. In 2005, ROK conducted its first auction for the importation of table rice for retail sale using 
US rice as the standard specification requirement.  Could ROK please explain the reason for using US 
rice as the basis for setting the standard for imports of rice?  Would it be possible for ROK to instead 
use Thai rice as the standard specification for the auction?   Answer  When conducting auctions for the importation of MMA  rice, Korea reflects domestic demand, past 
import records, and economic considerations. We applied US standards for tender of MMA rice imports from 1995 to 2004.  As for MMA rice tende r since 2005, Korea has also used US standards, 
reflecting past importation history.   
 
The US standards are internationally used, and we  apply these standards for the US, Australia and 
China as well as Thailand.  
 
Traceability – Food safety 
 Question 
 
13. Traceability and GAP has been introduced to ensure the food safety for the consumers in 
ROK.  This has, however, created a barrier to the current flow of trade between Thailand and ROK.  
Thailand is interested in learning more about th e detailed implementation of the schemes.  Is any 
possibility for the Korean government to introdu ce cooperative projects to promote knowledge of and 
compliance with these systems and thus, facilitate trade between the two countries?   
Answer 
 
Korea will consider promoting cooperative projects to  share information and opinions on policies for 
enhancing food safety such as traceability system and GAP. 
 Through these efforts, we expect that food safety measures will serve the role of facilitating trade 
flows, rather than restricting trade.  
Fresh, frozen and processed poultry 
 
Question 
 
14. ROK requires that all factories producing fresh, frozen and processed poultry must pass 
standards set by the Food and Drugs Administration.   However, ROK has fail ed to send officials to 
inspect factories in Thailand in order to grant the required certification.  Does ROK have a plan for 
the inspection of factories in Thailand in the near future?  
 WT/TPR/M/204/Add.1 
Page 254  
 
  Answer   
 
Any plants producing poultry meat to be expor ted to Korea should meet the Import Health 
Requirements for Thai Heat Processed Poultry Products announced by the Ministry for Food, 
Agriculture, Forestry and Fisheries, not the standards  by the Food and Drugs Administration.  
 
When Thailand requested us to approve new me at plants on March 12, 2008, we already had 
inspection plans for other countries during 2008. Ac cordingly, Korea did not have additional capacity 
to send inspectors to your country at that time.   
However, we notified to your country that Korea will put the priority on Thailand when inspecting 
meat plants next year (2009) as a result of the m eeting with Thai Director of Livestock Development 
Bureau at the Korea National Veterinary Research & Quarantine Service on September 8 this year.  
 
End-use requirements 
 Question 
 
15. ROK applies an end-use requi rement for imports of certain products for specific use.  For 
example, tapioca powder is imported only for use in the textile, paper and glue industries.  Rice is 
imported for use in the processing industries.  Long ans are imported to make herbal medicines and 
imports of natural rubber must only be used in the industrial sector.  What principle reasons are given 
for applying such measures and what method is used to select items to be subject to these measures?  
 
Answer 
 
Imports for other uses are not prohibited, but a re applied normal tariffs. For example, relatively low 
rate is applied (in-quota rate) for Tapioca powder using in the paper industry due to policy purpose.   Rice is imported for table rice as well as for processing in accordance with rice re-negotiation 
(2004). 
 Question 
 16. ROK requires that imports of dried longans fo r use in producing medicine must receive prior 
permission from the Medicine Manufacturers Associ ation (MMA).  However, since ROK categorizes 
dried longans as having medicinal qualities, all imports of dried longan must therefore receive 
permission from the MMA, whereas in fact, Thaila nd believes that the purpose of dried longans are 
primarily for use in the food industry.  Since a number of products could have multiple-uses, does 
ROK have any plan to revise these requirements?   
Answer 
 
Dried longans are imported for medical use(herbal me dicine) for the primary purpose in Korea. Each 
country can have different use of specific products as each nation has different culture and custom. 
Therefore, the management of imports can be  adapted to reflect those differences. 
  WT/TPR/M/204/Add.1 
 Page 255 
 
 
  PERU  
 Contratación pública  
Question 
 
1) ¿Cuál es el alcance de la limitación unificada a favor de las PYMES coreanas? 
 2) ¿Cuál es el alcance de la excepción a favor de las PYMEs que se encuentra en el Acuerdo 
Plurilateral de Contratación Pública de la OMC? Es  decir, se aplica de manera general, o a un número 
acotado de bienes, servicios o sectores? ¿existe un tope con respecto al valor de los contratos? 
 3) ¿Cuál es la razón de ser por el que Corea man tiene leyes distintas en materia de contratación 
pújblica para nivel, central, regional, local u empresas públicas? ¿En que radican las principales diferencias?  Answer to 1), 2), 3)  In Korea's Appendix to the Government Procuremen t Agreement(WT/Let/543, 23 May, 2006), Note 3 
to Annex 1, Note 3 to Annex 2 and Note 2 to Ann ex 3 state that "This Agreement does not apply to the 
single tendering procurement and set-asides for sma ll- and medium-sized businesses according to the 
Act Relation to Contracts to which the State is a Party and its Presidential Decree, (omitted below)."  
 Korea has abolished the single tendering system for SME cooperatives in 2006 and adopted a system 
of competitive tendering among SMEs. As of 2007, the system of competitive tendering among SMEs, 
is limited to SMEs. There are 221 kinds of products designated to be procured through such system. 
Most of these products are goods and there is no upper limit in the value of the contracts. 
 Korea maintains several legislati ons to ensure the efficiency of the government procurement. The 
main government procurement legislation is the Act on Contracts to which the State is a Party. Other 
legislations are applied to it. So, mo st contracts procedures are similar. 
 
Servicios 
 
Question 
 4) ¿La limitación a la participación extranjera del 49 por ciento para el suministro de servicios 
de telecomunicaciones básicas aplica también para 10s  servicios de valor añadido como Internet? 
 
Answer 
 No. There is no limit to foreign participation in value-added telecommunication services. 
Question 
 
5) ¿Existen requisitos de nacionalidad o de asociación con nacionales para proveer uno o mas 
servicios profesionales en Corea? 
 
Answer 
 
No. There are no nationality requirements or requirem ents for "association with nationals" in the 
supply of professional services in Korea.  WT/TPR/M/204/Add.1 
Page 256  
 
  Question 
 6) ¿Los bancos de propiedad estatal tienen bene ficios o ventajas que no cuentan los otros bancos 
comerciales?  Answer  There are no benefits or advantage to state-owned banks that are not grant ed to other commercial 
bank.  
Question 
 
7) ¿Esta permitida la compra en el  exterior de seguros o reaseguros? 
 
Answer 
 
The purchase abroad of re-insurance is permitted.  
Question 
 
8) ¿Los servicios de franquicias tienen algún requisi to que limite el acceso a los mercados o el 
trato nacional? 
 
Answer 
 There are no limitations for taxation services except that  only sole proprietorships, tax reconciliation 
task forces and tax agency corporation(limited liab ility companies) by CTAs licensed under the 
certified Tax Accountant Law are permitted.  Obstàculos tecnicos al comercio 
 
Question 
 
9) Does Korea notify all the proposals of technical  regulation to the WTO, including those that 
are in accordance with international standards?  
Answer 
 
Korea notifies the WTO of all the pr oposals of technical regulation th at are not in accordance with 
international standards. Even if it is not common, Korea notifies the proposals of technical regulation 
based on international standards with a view to providing information for foreign interested parties. 
 
Question 
 
10) How long is the period for comments th at Korea provides to WTO members on their 
proposed technical regulations, and how long is th e period between the publication of a technical 
regulation and its entry into force?  Answer  In pursuit to the Administrative Procedures Ac t and the recommendation of the WTO/TBT committee, 
the period for comments on the proposed technical re gulations is usually provided 60 days or more of 
those. The period between the publication of a tec hnical regulation and its entry into force is diverse  WT/TPR/M/204/Add.1 
 Page 257 
 
 
  with the nature of the technical regulation, but usually enough period is allowed for interested parties 
to be accustomed to a new regulation.  Question  
11) Does Korea have a website that contains all te chnical regulations that are in force? Are the 
technical regulations in a WTO official language?  
Answer 
 
The Korean Agency for technology and Standards (KATS) is under constructing a website that 
contains all technical regulations. It plans to be  served from the early 2009. English version of some 
technical regulations are available.  
Question 
 
12) Can the local governments in Korea prepare tec hnical regulations? If is affirmative, are these 
technical regulations in accordance with the WTO TBT Agreement, including the notification 
obligation? 
Answer 
 
The local governments in Korea do not have a right to prepare technical regulations.   
Question  13) Does Korea accept the results of conform ity assessment procedures performed by accredited 
bodies in other countries? Can the foreign conf ormity assessment bodies be accredited in Korea? 
 
Answer 
 Acceptance of the results of conformity assessme nt procedures performed by accredited bodies in 
other countries, is different with the respective regulation. 
 
Under KOLAS, the foreign conformity a ssessment bodies can be accredited in Korea. 
 
Question  
14) Can you explain the conformity assessment procedures used by Korea for cases where a 
positive assurance of conformity with technical regu lations is required by Governmental bodies? In 
which sectors does Korea accept supplier's declaration of conformity?  
Answer 
 
Regarding the certification system operated by gov ernment, there are 39 compulsory systems and 
59 voluntary systems. 20 kinds of conformity assess ment procedures operated in accordance with the 
compulsory certification system were simplified and syst emized into 9 kinds of those in August of 
2008, and they were harmonized with International St andards ISO/IEC Guide 67. It will be carried 
into effect in phases from July, 2009 to January, 2011.  
 
Korea accepts supplier's declaration of conformity  in automobiles and some items of consumer 
products.  WT/TPR/M/204/Add.1 
Page 258  
 
  Question 
 
15) Which is the approach used by Korea to s upervise that the results of conformity assessment 
procedure are in accordance with technical regulati ons? Where is supervision being made, on customs 
or in domestic market? 
 
Answer 
 For imported products, supervi sion is made on customs and in domestic market and for local 
products, supervision is made in domestic market. 
 Question 
 16) Description on the categories on which Korea gives cooperation specially related to TBT issues.  Answer  Korea is enhancing cooperation with WTO membe rs and FTA Counter-Party through implementation 
of WTO TBT Agreement and FTA, in the field of st andards, technical regula tions, and conformity 
assessment procedures with a view to increasing th e mutual understanding of their respective systems 
and facilitating access to their respective markets. 
 
_________