WORLD TRADE  
ORGANIZATION  WT/REG169/3 
1 July 2005 
 
 (05-2876) 
Committee on Regional Trade Agreements  
  
 
 
    
 
   
 
 
     
 
    
This report, prepared for the examinati on of the Free Trade Agreement between the 
Republic of Korea and Chile, has been draw n up by the WTO Secretariat on its own 
responsibility.  The report was requested by the Parties and prepared in consultation 
with them in accordance with the Guide lines on Procedures to Improve and Facilitate 
the Examination Process (document WT/REG/W/15/Add.1).   
Any technical questions arising from this repor t may be addressed to Mrs. Carmen Pont 
Vieira (tel:  022/739 5144) or Ms. Jo-Ann Crawford (022/739 5422).  
FACTUAL PRESENTATION 
 
Free Trade Agreement between the  
Republic of Korea and Chile 
(Goods) 
 
Report by the Secretariat WT/REG169/3 
Page iii  
 
 
TABLE OF CONTENTS 
 
Page 
 
 
I. TRADE ENVIRONMENT 1  
II. TREATY CHARACTER ISTIC ELEMENTS 3  
A. BACKGROUND INFORMATION  3 
B. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE AGREEMENT  4 
1. Import duties and charges, and quantitative restrictions  4 
(a) General provisions 4 
(b) Chile's liberalization scheme 4 
(c) Korea's liberalization scheme 6 
2. Rules of origin  9 
3. Export duties and charges, and quantitative restrictions  12 
C. REGULATORY PROVISIONS OF THE AGREEMENT  12 
1. Standards  12 
(a) Standards-related measures 12 
(b) Sanitary and phytosanitary measures 12 
2. Safeguard mechanisms  13 
3. Anti-dumping and co untervailing measures  13 
4. Subsidies and state-aid  13 
5. Other regulations  14 
(a) Customs-related procedures 14 
(b) Competition policy 15 (c) Government procurement 15 
(d) Intellectual property 16 
D. S
ECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT  16 
E. GENERAL PROVISIONS OF THE AGREEMENT  16 
1. Exceptions and reservations  16 
2. Accession  16 
3. Institutional framework  16 
4. Dispute settlement  17 
5. Relationship with other agreements concluded by the Parties  18 
ANNEX  20 
 Indicators of trade liberalization under the KCFTA 20 WT/REG169/3 
Page 1  
 
 
KOREA-CHILE FREE TRADE AGREEMENT (GOODS) 
 
Factual Presentation by the Secretariat 
 
I. TRADE ENVIRONMENT 
1. The Parties to the Korea-Chile Free Trade Ag reement (hereafter KCFTA or Agreement) are 
both among the world's fifty top merchandise traders:  with total exports of  $194 billion and imports 
of $179 billion, Korea ranked in 2003 as the twelfth top exporter and the 13th top importer; Chile's 47th 
rank corresponded to its $21 billion of exports and $19 billion of imports in that year.  Though of 
different size, both economies showed relativ ely high average trade/GDP ratios in 2001-03, 
surpassing two-thirds. 
2. Trade between the Parties accounted for less than  1 per cent of their combined world exports 
(or imports) in 2003.  Developments in recent y ears are pictured in Charts I.1 and I.2 below. 
Chart I.1 – Chile:  Merchandise imports from a nd exports to the world and Korea, 1997-2003 
 
 
  
 
  
 
 
 
  
 
  
 
 
Chart I.2 – Korea:  Merchandise imports from and exports to the world and Chile, 1997-2003 
050100150200
1997 1998 1999 2000 2001 2002 200300.511.52
Imports from Chile Exports to Chile
Total imports Total exports$billion
(left-hand scale)
(right-hand scale)$billion
 05101520
1997 1998 1999 2000 2001 2002 20030.00.51.01.5
Imports from Korea Exports to Korea
Total imports Total exports$billion $billion
(left-hand scale)
(right-hand scale)WT/REG169/3 
Page 2  
 
3. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in 2003, is shown in Chart I.3, on the basis of HS section product categories. 
Chart I.3 - Chile and Korea:  Product co mposition of merchandise trade, 2003 
 
 
4. There was a strong linkage in product compositi on between Chile's imports from Korea and 
the latter's global exports in 2003.  Leaving aside imports of mineral products  (petroleum products), 
the three most important product categories of Chile 's imports from Korea (together accounting for 74 
per cent of the total) were vehicles and aircraft, m achinery, and plastics.  Textile imports stand out as 
Vehicles
Aircraft
37.6
Machinery  
22.9 Mineral  
Products  
14.1 Plastics  
13.3 Base Metals  
5.2 Textiles  
3.2 Chemicals  
1.6Other 
2.1 
Total: $540 million  Chile's Imports from Korea
Total:  $1.05 billion 
Machinery
23.9
Mineral Products
20.0
Chemicals  
10.4 Vehicles,  
Aircraft  
10.3 Plastics  
5.8 Base Metals  
5.6 Textiles  
5.1 Prepared Foods  
3.1 Wood Pulp  
2.6 Other
13.3
Total:  $17.4 billion  Chile's Global Imports  Korea's Global Imports  
Machinery
32.8 
Mineral  
Products  
23.3 Base Metals
8.8Chemicals
8.1Optical
4.7Textiles
3.5Plastics
2.5Vehicles
2.5Other
13.8
Total:  178.8 billion  
Chile's Global Exports  Korea's Global Exports  
Base Metals
26.2
Mineral
Products
17.3
Vegetables  
10.5 Animal  
Products  
9.4 Prepared  
foods 
8.7 Chemicals  
6.2 Wood 
6.1 Wood Pulp  
6.0 Not Classified  
2.6 Other 
6.9 
Machinery
44.8 
Vehicles,
Aircraft
17.9Textiles
7.7Base Metals
7.0Plastics
5.9Chemicals
4.7Mineral 
Products
3.6Other
8.4
Total:  $20.1 billion  Total:  $193.8 billion  Base Metals 
48.5 
Mineral 
Products 
24.2 Korea's Imports from Chile 
Chemicals 
8.2Wood Pulp 
7.9Animal Products 
4.4Prepared Food 
2.0Vegetables 
1.6Other 
3.1  WT/REG169/3 
 Page 3 
 
 
accounting for a relatively small share of Chile's  imports from Korea, given the latter's global 
competitive position in these products (which make up 7.7 per cent of total exports). 
5. Korea's imports from Chile were in 2003 heav ily concentrated on base metals and mineral 
products (in particular, copper), these accounting for nearly three-quarters of the total, while only 
making up 44 per cent of Chile's global exports.  The share of vegetables, animal products and 
prepared foods in total imports from Chile was eight  per cent, while these products together accounted 
for nearly 29 per cent of Chile's global exports in 2003. 
II. TREATY CHARACTERISTIC ELEMENTS 
A. BACKGROUND INFORMATION  
6. The KCFTA was signed by the Government of Ch ile and the Government of the Republic of 
Korea on 15 February 2003; it entered into force on 1 April 2004. 
7. On 19 April 2004, the Parties notified the KCFTA to the WTO under Article XXIV:7(a) of 
the GATT 1994, as forming a free-trade area (WT/REG169/N/1).  The terms of reference for the examination of the Agreement were adopted by the Council for Trade in Goods on 5 July 2004 (WT/REG169/2).  The text of the Agreement was circulated to the Members as document 
WT/REG169/1 and Corr.1 (English version only), and is also available, together with its Annexes, on 
the Parties' official websites (URL addr esses:  www.direcon.cl/tlc_corea_1.php, and 
www.mofat.go.kr/mofat/mk_a013/mk_b 069/mk_c219/1183971 _23531.html). 
8. The Agreement is divided into seven parts as follows: 
Part I General Aspects (Initial Pr ovisions; General Definitions)  
Part II Trade in Goods (National Treatme nt and Market Access; Rules of Origin; 
Customs Procedures; Safeguard Measures; Anti-Dumping and 
Countervailing Duty Matters; Sanitary and Phytosanitary Measures; 
Standard-Related Measures)  
Part III Investment, Services and Related Matters (Investment; Cross-Border Trade 
in Services; Telecommunications; Te mporary Entry for Business Persons; 
Competition Policy) 
Part IV  Government Procurement 
Part V Intellectual Property Rights 
Part VI Administrative and Institutional Provisions (Transparency, Administration 
of the Agreement, Dispute Settlement Procedures) 
Part VII Other Provisions (Exceptions; Final Provisions) 
 
 
9. The Agreement contains a total of 27 annexes,  in particular, Annex 3.4 Elimination of 
Customs Duties (Schedules) and Annex 4 Specific Rules of Origin. 
10. No overall transition period is explicitly stated  in the Agreement in relation to the tariff 
concessions granted.  However, in the Parties' sch edules for the elimination of duties on bilateral 
imports, periods of up to 13 years (Chile) and 16 years (Korea) are foreseen for a few products. 
 
  WT/REG169/3 
Page 4  
 
B. 
NATIONAL TREATMENT AND MARKET ACCESS  PROVISIONS OF THE AGREEMENT  
1. Import duties and charges, and quantitative restrictions 
 (a) General provisions  
11. Each Party accords national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994 (Article 3.3). 
12. Except in cases specified in the Agreement, the Parties cannot increase existing, or adopt new 
customs duties (Article 3.4.1).  Article 3.4.2 provi des for the elimination of customs duties by Chile 
and Korea on the date of entry into force and accord ing to various stages listed in the tariff schedules 
of Annex 3.4, on the goods traded between the Partie s that qualify under the rules of origin set out in 
Chapter 4.  The Parties may consult regarding acceleration of the elimination of customs duties 
(Article 3.4.4).  Article 3.4.6 provides that eith er Party may adopt or maintain import measures to 
allocate in-quota imports provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota. 
13. The Parties are not allowed to adopt or maintain any prohibition or restriction on the import 
of any good of the other Party, except in accordan ce with Article XI of the GATT (Article 3.9).  
Exceptions to this general rule are provided for in  the Agreement.  Chile reserves the right not to 
apply Article 3.9 to imports of used vehicles. 
14. Article 3.5 regulates the duty-free temporary admission of goods of certain professional 
equipment necessary for carrying out business activ ity; equipment for the press or for sound or 
television broadcasting and cinematographic e quipment; goods imported for sports purposes and 
goods intended for display or demonstration; and co mmercial samples and adver tising films.  Articles 
3.6 and 3.7 extend duty-free entry to commercial sa mples of negligible or non-commercial value and 
to goods that have undergone repair or a lteration in the other country respectively. 
 (b) Chile's liberalization scheme
1 
15. Table II.1 shows the staged elimination of tariffs for Chile's imports from Korea, as revealed 
in the corresponding KCFTA schedule. 
Table II.1 - Chile:  Annual tariff reductions on imports from Korea 
Percentage reductions Year (as of entry 
into force ) 
Number of tariff 
lines 
Entry into 
force 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
2012 
2013 
2014 
2015 
2016 
2017 
0 3546 100              
3 1 25 50 75 100           
5 2464 16.7 33.3 50 66.7 83.3 100         
7 20 12.5 25 37.5 50 62.5 75 87.5 100       
10 1519 9.1 18.2 27.3 36.4 45.5 54.5 63.6 72.7 81.8 90.9 100    
13 290 0 0 0 0 0 0 12.5 25 37.5 50 62.5 75 87.5 100 
Note :  Tariff reductions take place on 1 January of the given year  except for the year of entry into force (1 April 2004) 
 
                                                      
1 For a detailed view of the Parties' trade lib eralization commitments, see also the Annex.  WT/REG169/3 
 Page 5 
 
 
16. Upon entry into force, 3,546 tariff lines were immediately liberalized.2  Different timetables 
are applied to the tariff reduction of a further 4,294 tariff lines; liberalization takes the form of fixed 
annual percentage reductions  within each staging category, as su mmarized in Table II.1.  The bulk of 
tariff lines not liberalized by Chile upon entry into force of the KCFTA are subject to reduction up to 
2009 and 2014; 290 tariff lines are scheduled to be li beralized starting in 2010 and ending in year 13 
(i.e. 2017); 96 tariff lines are excluded fro m duty elimination under the Agreement. 
17. Table II.2 shows the number of HS 8-digit tariff lines eligible for duty-free treatment by Chile 
after entry into force, organized by the year in which they are liberalized, and the HS Chapter to 
which they pertain.  Out of the total of 4,294 products (defined at the HS 8-digit level), 22 are agricultural goods, while the rest are a broad range of industrial products co vering 48 HS Chapters.  
Most of the products falling within the longest trans ition period (13 years) are textiles and machinery. 
Table II.2 - Chile:  Number of products subject to scheduled duty-free treatment 
Year of duty-free treatment, 
HS Chapter and description  HS 8-d. 
lines Year of duty-free treatment, 
HS Chapter and description  HS 8-d. 
lines Year of duty-free treatment, 
HS Chapter and description HS 8-d.  
lines 
2007 2009 (cont.) 2014 (cont.) 
39-Plastics & articles thereof 1 89-Ships, boats & floating strs. 6 69-Ceramic products 45 
Total  1 Total  2464 70-Glass & glassware 78 
2009 2011 72-Iron & steel 55 
21-Miscellaneous edible preps. 6 28-Inorganic chemicals 1 73-Articles of iron or steel 102 
25-Salt, sulphur, earths & stone 1 29-Organic chemicals 1 74-Copper & articles thereof 41 
27-Mineral fuels & oils 26 39-Plastics & articles thereof 2 76-Aluminium & articles thereof 11 
28-Inorganic chemicals 191 40-Rubber & articles thereof 4 78-Lead & articles thereof 1 
29-Organic chemicals 486 74-Copper & articles thereof 2 82-Tools, implements 18 
30-Pharmaceutical Products 8 84-Nuclear reactors, machinery 3 83-Misc. articles of base metal 15 
32-Tanning or dyeing extracts 44 85-El. machinery & equipment 1 84-Nuclear reactors, machinery 49 
36-Explosives, Pyrotechnic prods  16 90-Optical, photographic instrs. 3 85-El. machinery & equipment 36 
38-Miscellaneous chemical prods 100 95-Toys, games & sports 3 87-Vehicles other th. rail/tramway 18 
39-Plastics & articles thereof 153 Total  20 89-Ships, boats & floating structs 11 
40-Rubber & articles thereof 24 2014 90-Optical, photographic instrs. 1 
41-Raw hides & skins 41 02-Meat, offal 10 95-Toys, games & sports 57 
42-Articles of leather 27 10-Cereals 6 Total  1519 
43-Furskins & artificial fur 18 25-Salt, sulphur, earths & stone 4 2017 
49-Printed books, newspapers 33 28-Inorganic chemicals 8 38- Miscellaneous chemical prods 1 
51-Wool, woven fabric 34 29-Organic chemicals 29 40-Rubber & articles thereof 12 
52-Cotton 46 30-Pharmaceutical Products 52 52-Cotton 2 
54-Man-made filaments 17 31-Fertilizers 4 54-Man-made filaments 4 
56-Wadding, felt & non-woven 24 32-Tanning or dyeing extracts 33 55-Man-made staple fibres 19 
57-Carpets & oth. textile floor cov.  30 34-Soap, organic surface agents 20 58-Special woven fabrics 1 
58-Special woven fabrics 36 35-Albuminoidal substances 6 60-Knitted or crocheted fabrics 11 
59-Impregn., coated textile fabrics  35 38-Miscellaneous chemical prods 10 61-Knitted articles of apparel 31 
61-Knitted articles of apparel 3 39-Plastics & articles thereof 8 62-Not knitted articles of apparel 28 
62-Not knitted articles of apparel 4 40-Rubber & articles thereof 38 63-Other made up textile articles 11 
63-Other made up textile articles 5 52-Cotton 76 64-Footwear, gaiters 68 
68-Art. of stone, plaster, cement 57 53-Other vegetable textile fibers 20 72-Iron & steel 31 
72-Iron & steel 92 54-Man-made filaments 67 73-Articles of iron or steel 6 
73-Articles of iron or steel 35 55-Man-made stap le fibres 89 74-Copper & articles thereof 1 
74-Copper & articles thereof 9 56-Wadding, felt & non-woven 20 76-Aluminium & articles thereof 1 
76-Aluminium & articles thereof 23 58-Special woven fabrics 5 83-Misc. articles of base metal 2 
82-Tools, implements 60 59-Impregn., coated textile fabrics  5 84-Nuclear reactors, machinery 13 
83-Misc. articles of base metal 25 60-Knitted or crocheted fabrics 39 85-El. machinery & equipment 8 
84-Nuclear reactors, machinery 557 61-Knitted articles of apparel 159 87-Vehicles other th. rail/tramway 21 
85-El. machinery & equipment 156 62-Not knitted articles of apparel 179 89-Ships, boats & floating structs 7 
86-Rail or tramway locomotives 5 63-Other made up textile articles 76 94-Furniture, bedding, mattresses 12 
87-Vehicles other th. rail/tramway  30 64-Footwear, gaiters  Total  290 
 
                                                      
2 The total number of tariff lines (HS 2002 at the 8-digit level) is 7,936 including 55 partial lines.  WT/REG169/3 
Page 6  
 
18. Out of the 96 tariff lines which are excluded from duty elimination under the Agreement, 61 
correspond to agricultural products (see Table II.3). 
Table II.3 - Chile:  Products excluded from liberalization under the KCFTA 
HS Chapter & description  HS 8-digit lines  Product 
10-Cereals 1 wheat and meslin 
11-Products of the milling industry 1 wheat or meslin flour 
15-Fats and oils 33 oils 
17-Sugar and sugar products 17 sugar, glucose 
21-Miscellaneous edible preparations 9 fruit powders 
38-Miscellaneous chemical products 1 insecticide 
40-Rubber and articles thereof 10 tyres 
84-Nuclear reactors, machinery 24 refrigerators, freezers 
Total 96  
 
19. Chile does not maintain any tariff quotas under the KCFTA.   
 (c) Korea's liberalization scheme  
20. The various timetables for Korea's eliminati on of tariffs on its imports from Chile, as 
contained in the corresponding KCFTA schedule, are shown in Table II.4.  Upon entry into force of the Agreement, Korea liberalized 9,740 tariff lines.
3  By 2020, a further 1,018 tariff lines are 
scheduled to be freed.  Most tariff lines not libera lized by Korea upon entry into force are subject to 
reduction in 2009 and 2014; for 12 products, liberalizati on is to begin in 2011 and last a period of ten 
years ending in 2020.  In all cases, liberalization ta kes the form of fixed annual percentage reductions.  
The Agreement also provides that the schedule of liberalization of 391 tariff lines should be 
negotiated after the end of the Doha Developmen t Agenda (DDA) negotiations; 21 tariff lines are 
excluded from duty elimination under the Agreement. 
Table II.4 - Korea:  Annual tariff reductions on impor ts from Chile 
Percentage reductions  Year (as of 
entry into force  
Number of tariff 
lines  
Entry into 
force 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 
0 9740 100           
5 701 16.7 33.3 50 66.7 83.3 100      
7 41 12.5 25 37.5 50 62.5 75 87.5 100    
9 1 10 20 30 40 50 60 70 80 90 100  
10 262 9.1 18.2 27.3 36.4 45.5 54.5 63.6 72.7 81.8 90.9 100 
10* 1 9.1 18.2 27.3 36.4 45.5 54.5 63.6 72.7 81.8 90.9 100 
Percentage reductions  
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 
 16 12 0 10 20 30 40 50 60 70 80 90 100 
DDA** 391            
* The preferential treatment is applied only to grapes im ported from 1 November to 30 April of each year. 
** The tariff elimination schedule for this category will be negotiated after the end of the Doha Development 
Agenda negotiations. 
Note :  Tariff reductions take place on 1 January of the giv en year except for the date of entry into force. 
 
21. Table II.5 shows the number of HS 10-digit tariff lines subject to scheduled progressive 
elimination of duties by Korea after entry into force of the Agreement, by the year in which they will 
                                                      
3 Over a total of 11,170 tariff lines (HS 1996 at the 10-digit level).  WT/REG169/3 
 Page 7 
 
 
be liberalized and the HS Chapter to which they pe rtain.  Most of them correspond to agricultural 
products (869 lines), of which around 25 per cent will become duty-free after 2013. 
Table II.5 - Korea:  Products subject  to scheduled duty-free treatment 
Year of duty-free 
treatment, HS Chapter and 
description HS 10-d. 
lines Year of duty-free 
treatment, HS Chapter and  
description HS 10-d. 
lines Year of duty-free 
treatment, HS Chapter and  
description HS 10-d. 
lines 
2009 2009 (cont.) 2014 (cont.) 
01-Live Animals 35 35-Albuminoidal substances 15 05-Products of animal origin 4 
02-Meat, offal 6 38-Miscel. chemical prods 2 06-Live trees & other plants 7 
03-Fish & crustaceans 62 44-Wood & articles of wood 69 07-Vegetables, plants 46 
04-Milk, milk products, eggs 4 94-Furniture, bedding, etc. 1 08-Edible fruit & nuts 23a 
05-Products of animal origin 26 Total  701 11-Products of the milling ind. 2 
06-Live trees & other plants 67 2011 12-Oil seeds, grains 3 
07-Vegetables, plants 25 02-Meat, offal* 4 16-Preparations of meat, fish 14 
08-Edible fruit & nuts 5 07-Vegetables, plants 6 18-Cocoa & cocoa preps 1 
09-Coffee, tea, mate & spices 25 08-Edible fruit & nuts 4 19-Preps of cereals, flour 6 
10-Cereals 2 10-Cereals 1 20-Preps of vegetables, fruit 27 
11-Products of the milling ind. 7 12-Oil seeds, grains 1 21-Miscellaneous edible preps 8 
12-Oil seeds, grains 26 16-Preparations of meat, fish* 2 22-Beverages, spirits & vinegar 4 
13-Lac, gum, resins 12 18-Cocoa & cocoa preps 2 23-Residues & waste food ind. 2 
14-Vegetable plaiting materials 10 20-Preps of vegetables, fruit 14 24-Tobacco 4 
15-Fats & oils 52 21-Miscellaneous edible preps 5 33-Essential oils & resinoids 1 
16-Preparations of meat, fish 17 22-Beverages, spirits & vinegar  1 35-Albuminoidal substances 3 
17-Sugar & sugar products 11 74-Copper & articl es thereof 1 44-Wood & articles of wood 29 
18-Cocoa & cocoa preparations  24 Total  41 Total  262 
19-Preparations of cereals, flour  32 2013 2020 
20-Preps of vegetables, fruit 30 20-Preps of vegetables, fruit 1 08-Edible fruit & nuts 1 
21-Miscellaneous edible preps 40 Total  1 18-Cocoa & cocoa preps 2 
22-Beverages, spirits & vinegar 44 2014 19- Preps of cereals, flour 1 
23-Res. & waste from food ind. 24 02-Meat, offal 45 20- Preps of vegetables, fruit 6 
29-Organic chemicals 2 03-Fish & crustaceans 25 21-Miscellaneous edible preps 2 
33-Essential oils & resinoids 26 04-Milk, milk products, eggs 8 Total  12 
a Duty-free treatment applied to grapes only if imported from 1 November to 30 April. 
*  An asterisk denotes those HS Chapters where tariff quotas apply 
 
22. Several agricultural products, particularly tho se in HS Chapters 8 (edible fruit and nuts), 20 
(preparations of vegetables and fruit), and 21 (miscellaneous edible  preparations) are subject to 
multiple categories for tariff liberation. 
23. Almost all 391 tariff lines on which the KCFTA provides that Korea's tariff elimination 
schedule(s) will be decided upon after completion of the Doha Round are agricultural products (see 
Table II.6). 
Table II.6 - Korea:  Products to be scheduled for liberalization after conclusion of the DDA 
HS Chapter & description  HS 10-digit lines  Product 
01-Live Animals 6 cows, cattle, ducks 
02-Meat, offal* 32 carcasses, liver, frogs' legs 
04-Milk, milk products, eggs* 39 cream, milk powder, butter 
05-Products of animal origin 6 antlers, silkworm eggs 
07-Vegetables, plants* 47 onions, aubergines, garlic, pumpkins 
08-Edible fruit and nuts* 38 pistachios, bananas, dates, mangoes 
09-Coffee, tea, mate and spices 8 tea, ginger 
10-Cereals 13 barley, popcorn, buckwheat 
11-Products of the milling industry 31 barley flour, oats, cornflour 
12-Oil seeds, grains 29 soya bean oil, ginseng, locust beans 
13-Lac, gum, resins 8 ginseng extract 
15-Fats and oils 19 refined oil, crude oil, mustard oil WT/REG169/3 
Page 8  
 
HS Chapter & description  HS 10-digit lines  Product 
16-Preparations of meat, fish* 14 meat juices, extracts 
17-Sugar and sugar products 14 lactose, glucose, fructose 
19-Preparations of cereals, flour 5 puffed rice, muesli 
20-Preparations of vegetables, fruit 22 onions, garlic, peanut butter 
21-Miscellaneous edible preparations 8 soya sauce, hot bean paste, ginseng tea 
22-Beverages, spirits and vinegar 3 ginseng beverage, fermented alcohol 
23-Residues and waste from food ind. 8 sesame seeds, milk replacer 
24-Tobacco 21 cheroot, cigarillos, cigarettes 
33-Essential oils and resinoids 3 ginseng solution 
35-Albuminoidal substances 10 casein, milk albumin, starches 
50-Silk 8 silkworm cocoons 
Total  391  
 
24. All 21 tariff lines excluded from duty elimination by Korea under the Agreement are 
agricultural products (see Table II.7). 
Table II.7 -  Korea:  Products exclude d from liberalization under the KCFTA 
HS Chapter & description  HS 10-digit lines  Product 
08-Edible fruit and nuts 2 apples, pears 
10-Cereals 6 rice 
11-Products of the milling industry 5 rice flour 
18-Cocoa and cocoa preparations 3 rice in grain form 
19-Preparations of cereals,  flour 5 rice products 
Total 21  
 
25. Korea maintains under the KCFTA seven types of tariff quotas allowing for annual duty-free 
import quantities from Chile, as detailed in Table II. 8.  All quotas are managed according to Korea's 
internal regulations (auctioning).  Tariff quotas on 6 tariff lines will end in 2011, when the 
corresponding products become duty-free.  The re moval of tariff quotas on the remaining 18 tariff 
lines will be determined at the end of the DDA nego tiations, when the schedule for liberalization of 
these products is fixed.  Tariff quotas apply exclus ively to agricultural products, including meat, 
poultry, whey powder, other ve getables, plums and mandarins. 
Table II.8 - Tariff quotas maintain ed by Korea under the KCFTA 
Type Tariff line Description Duty-free 
quantity 
(Metric 
tonnes per 
year) 2004 
MFN 
tariff Liberalization 
schedule 
0201.20.00.00 meat of bovine animals, fresh or chilled, 
other cuts with bone in 200 40 % post-DDA 
TQ(1) 
0202.20.00.00 meat of bovine animals, frozen, other cuts 
with bone in 200 40 % post-DDA 
0207.14.10.10 meat and edible offal of poultry, leg 20 % post-DDA 
0207.14.10.20 meat and edible offal of poultry, breast 20 % post-DDA 
0207.14.10.30 meat and edible offal of poultry, wing 20 % post-DDA 
0207.14.10.90 meat and edible offal of poultry, other 20 % post-DDA 
0207.14.20.10 cuts and offal, frozen, liver 22.5 % post-DDA 
0207.14.20.90 cuts and offal, frozen, other 27 % post-DDA 
1602.32.10.10 samge-tang 30 % post-DDA 
1602.32.10.90 of fowls of the species Gallus domesticus, 
other 30 % post-DDA TQ(2) 
1602.32.90.00 of fowls of the species Gallus domesticus, 
other 2,000 
(aggregate 
quantity) 
30 % post-DDA  WT/REG169/3 
 Page 9 
 
 
Type Tariff line Description Duty-free 
quantity 
(Metric 
tonnes per 
year) 2004 
MFN 
tariff Liberalization 
schedule 
0207.25.00.00 turkey, not cut in pieces, frozen 18 % 2011 
0207.27.10.00 cuts and offal, frozen, cuts 18 % 2011 
0207.27.20.10 cuts and offal, frozen, liver 22.5 % 2011 
0207.27.20.90 cuts and offal, frozen, other 27 % 2011 
1602.31.10.00 turkeys, in airtight containers 30 % 2011 TQ(3) 
1602.31.90.00 turkeys, other 600 
(aggregate 
quantity) 
30 % 2011 
0404.10.10.10 whey powder 49.5 % post-DDA 
0404.10.21.20 whey from which all or part of the lactose, 
proteins or minerals have been removed, 
demineralized 49.5 % post-DDA 
0404.10.21.30 whey from which all or part of the lactose, 
proteins or minerals have been removed, whey protein concentrates 49.5 % post-DDA TQ(4) 
0404.90.00.00 whey, other 1,000 
(aggregate 
quantity) 
36 % post-DDA 
TQ(5) 0712.90.20.99 other vegetables, other 100 30 % post-DDA 
TQ(6) 0805.20.90.00 mandarins, other 100 144 % post-DDA 
TQ(7) 0809.40.10.00 plums 280 45 % post-DDA 
 
2. Rules of origin 
26. Rules of origin are set out in Chapter 4, while customs procedures are detailed in Chapter 5.  
In accordance with Article 5.12, "Uniform Regul ations" for the interpretation, application and 
administration of Chapters 3 (National Treatment a nd Market Access for Goods), 4 and 5 were agreed 
through an exchange of letters between the Parties.4  These Regulations have been implemented as 
from the entry into force of the Ag reement.  Articles 4.1 and 5.1 cont ain definitions of related terms 
used in the relevant Chapters. 
27. Basic requirements for a good5 to be considered originating are as follows (Article 4.2): 
- the good is wholly obtained or produced entirely in the Parties;6 or 
- the good is produced entirely in the Parties a nd all of the non-originating materials meet 
specific criteria provided for in the Agreement,7 or 
- the good is produced entirely in the Parties from originating materials only, or 
- unassembled goods and goods classified with their parts which do not meet the specific 
origin rules but which reach a minimum regional value-content requirement (see 
paragraph 29 below).  This criterion however  does not apply for goods classified within 
Chapters 61-63 of the Harmonized System; fo r these products, the rule generally requires 
that some specific operations (generally cu tting and sewing or otherwise assembling) be 
performed in the territory of the Parties. 
                                                      
4 The English and Spanish versions of the Uniform Regulations are available, respectively, at: http://  
www.mofat.go.kr/pdffiles/UE.pdf and  http://www.bcn.cl/imag/tratados/tratado_vally049.pdf.  
5 Throughout this Section, a "good" is to be underst ood as meaning a "final good", and "materials" refer 
to inputs used in the production of the good. 
6 This concept applies to some agricultural, fishery and mining products. 
7 Specific rules of origin are listed in Annex 4 of the Agreement.  They norma lly provide for a change 
in tariff classification (see paragraph 29). WT/REG169/3 
Page 10  
 
28. The Agreement does not provide for regime-wide rules of origin; it lists (in Annex 4) the 
specific criteria that non-originating materials have to conform with for a good produced from these materials to acquire originating status. 
29. Generally, a change in tariff classificati on (CTC) defines origin, though it may be 
supplemented with (or even, in some cases, replaced  by) regional value content (RVC) or, to a lesser 
extent, technical test criteria.
8  The CTC criterion usually requires a change at the HS Heading (4 
digit) level but changes at the Chapter level ar e also frequent, especially for agricultural goods.9  As 
detailed in Article 4.3, the RVC can be calculated on the basis of the "build-down"  method or the 
"build-up" method, without any limitation.10  Whenever the RVC criterion applies, those goods for 
which an RVC of not less than 45 per cent using the build-down method, or 30 per cent according to 
the build-up method, are considered as originatin g goods; for products classified under HS 2008.92-
2008.99 (prepared or preserved fruits, nuts and plan ts) and 2009.90 (mixture of fruit juices), an RVC 
of 80 per cent (build-down method) applies.11  The technical test method is only used in apparel and 
clothing, always in conjunction with a CTC require ment (either at the Heading or Chapter levels).12 
30. Article 4.5 allows full bilateral cumulation between Parties, i.e. both in terms of 
goods/materials (originating goods or materials fro m one Party incorporated in a good of the other 
Party are considered originating from the territory of the latter Party) and of production processes.   
31. Under the Agreement (see Article 4.1, "value of  materials", (b)(ii)d), the costs of originating 
materials are taken into account in determining orig in of the final good.  In practical terms, this 
tracing test means that when a non-originating material  fails to acquire originating status after being 
processed, it does not become 100 per cent non-originati ng; rather, the costs of originating materials 
still count towards the determination of origin of the final product.  Further, an intermediate material 
(i.e. a material that is also produced by the pr oducer of the final good) that qualifies as originating 
benefit from the absorption/takeover principle, i.e. it will be considered 100  per cent originating once 
incorporated into a final good. 
32. Article 4.6 (De Minimis) defines the tolerance ru les with respect to origin determination.  
Thereby, a good that would not undergo the requi red CTC will still be granted originating status 
provided that the value of all non-originating materials which do not undergo the CTC does not exceed 8 per cent of the good's adjusted value.  Ex ceptions apply to agricultural and textiles products 
                                                     
 
8 Through the prescription of certain manufacturing requirements that may (positive test) or may not 
(negative test) confer originating status .  The negative test is generally used  to describe minimal operations (see 
paragraph 33). 
9 In the context of non-preferential rules of origin, the basic requirement is that of a CTC at the sub-
heading level, i.e. 6-digit, except for cameras (value-add ed method) and textile articles (technical test method).   
10 In the build-down method , RVC is calculated as the difference between the adjusted value of the 
good and the value of non-originating materials.  "Adjusted value" is defined in Article 4.1 as being the (transaction) value determined in line with the WTO Customs Valuation Agreement, adjusted on an f.o.b. basis 
(i.e. excluding any costs, charges, or expenses incurr ed for transportation, insurance, and related services 
incident to the international shipme nt of the merchandise from the coun try of exportation to the place of 
importation). 
In the build-up method
, RVC is calculated on the basis of the value of originating materials. The 
manner in which originating and non-originating materials are valued is described in Article 4.1.  In  general 
terms, the former are valued on an into -factory or c.i.f. basis - i.e. costs incurred after the imported material has 
crossed the border (customs duties, freight, insurance and packing) are added to the value of the originating material - while the latter are valued on a f.o.b. basis – i.e. costs of freight, insurance and packing can be 
deducted from the value of th e non-originating materials. 
11 If different from those basic minimum RVC requirements, the relevant specific RVC requirement 
listed in Annex 4 applies. 
12 The requirement is generally that the good is both cut (or knit to shape) and sewn or otherwise 
assembled in the Parties.  WT/REG169/3 
 Page 11 
 
 
(HS Chapters 1-24 and 50-63, respectively).13  Tolerance rules do not apply in respect of RVC 
requirements 
33. Article 4.13 describes the minimal, non-qualifying  operations carried out on non-originating 
materials in the territory of the Parties which do not confer origin as "operations or processes that 
assure the preservation of goods in good conditions fo r the purpose of transportation or storage;  
operations or processes to facilitate shipment or tran sportation;  or operations  or processes relating to 
packaging or presentation of the goods for their resp ective sale". An illustrative list of such operations 
is also provided.  Additional rules in Articles 4. 7-4.11 indicate how certain materials (fungible goods 
and materials; accessories, spare parts and tools; indirect materials; packaging materials and containers) are to be treated/valued when determining the origin of goods. 
34. The Agreement also includes two provisions on territoriality, dealing with processing and 
transportation outside the cumulation area.  First, no outward processing is authorized; rather, the granting of originating status requires that the pr oduction be made entirely in the territory of the 
Parties and that any RVC requirement be met entirely in the territory of the Parties (Article 4.2.2).  
Second, transhipment rules (Article 4.12) authorize originating goods to transit through third countries 
under certain conditions:  originatin g status is lost if the good e ither undergoes production/operations 
other than "unloading, reloading, crating, pack ing and repacking or any other operation necessary to 
preserve it in good condition or to transport the good to  the territory of a Party", or "does not remain 
under the control or observation of the customs authority in the territory of the non-Party". 
 
Rules of Origin:  Basic Features at a Glance 
 
• No régime-wide origin rules. 
• Product-specific criteria: 
o Wholly obtained goods. 
o CTC, generally at the heading or Chapter levels. 
o RVC, at generally 45% in the build-down method or 30% in the build-up method;  very few exceptions 
requesting 80% in the build-down method. 
o Technical test, only for Chapters 61-63 and in conjunction with a CTC requirement. 
• Bilateral and full cumulation. 
• Tracing test applies. 
• Absorption principle included. 
• Tolerance rule at a maximum of 8% of the adjusted val ue; exceptions for agricultural and textiles products.  No 
tolerance rules for RVC requirements. 
• No duty-drawback for non-originating materials once  the final good acquires originating status.   
• Outward-processing not authorized. 
• Transit through third parties aut horized under certain conditions.  
 
35. The customs procedures in Chap ter 5 are designed to ensure effective administration and 
enforcement of the rules of origin and other cu stoms matters.  These (including, among others, the 
establishment of a single certificate and declaration of origin; procedures for origin verifications and 
for advanced rulings on determinations of origin; and co-operation on customs related matters) are 
detailed in paragraph C.5.48 below. 
 
                                                      
13 For agricultural goods, non-originating materials have to be from a different sub-heading than that of 
the final good.  In the case of textiles, the limitation refers to the maximum weight (instead of value) of the non-
originating fibres and yarns vis-à-vis  the total weight of the relevant component. WT/REG169/3 
Page 12  
 
3. Export duties and charges, and quantitative restrictions 
36. The Parties are not allowed to adopt or maintain  any prohibition or restriction on the export or 
sale for export of any good, except in accordance with Article XI of the GATT (Article 3.9). 
C. R
EGULATORY PROVISIONS OF THE AGREEMENT  
1. Standards 
 (a) Standards-related measures  
37. Chapter 9 of the Agreement addresses standa rds, technical regulations and conformity 
assessment procedures that may, directly or indi rectly, affect trade in goods between the Parties.14  A 
Committee has been established to monitor the impl ementation, enforcement and administration of 
the provisions in this Chapter (Article 9.10).  Article  9.11 lays down provisions for the exchange of 
information and the provision of technical assistance  on standards-related measures and calls for co-
operation among the Parties' respective standardizing bodies. 
38. Article 9.4 stipulates that the Parties may prepare, adopt, apply or maintain any standards-
related measure as well as measures ensuring en forcement and compliance with these standardizing 
measures, including approval procedures.  It co mmits the Parties to accord each other national 
treatment and to use relevant international standards as the basis for their respective standards-related 
measures. 
39. Article 9.5 contains a call for working towards compatibility of the Parties' standards-related 
measures.  This goal is to be achieved by each Pa rty promoting, upon request, the compatibility of a 
specific standards-related measure, or through a pr ocess of equivalence acceptation of their respective 
standards-related measures.  As for conformity ass essment procedures, Article 9.6 requires the Parties 
to ensure that their procedures are expeditious, transp arent, that consideration is given to request by 
either Party to negotiate mutual recognition agr eements of their respective conformity assessment 
procedures, and that each Party shall accredit, a pprove or recognize the conformity assessment bodies 
of the other Party on terms no less favourable than  those accorded to bodies in their respective 
territory. 
40. Chapter 12 (Telecommunications) provides for specific provisions on standards for 
telecommunications.  Article 12.5 sets down the cond itions for the adoption and/or maintenance of 
standards-related measures relating to the attachment  of terminal or other equipment to the public 
telecommunications transport networks, including t hose measures relating to the use of testing and 
measuring equipment for conformity assessment procedures.  In accordance with the WTO Agreement on Technical Barriers to Trade, confor mity assessment procedures are to be transparent 
and non-discriminatory.  Furthermore, no later than one year after the Agreem ent's entry into force, 
the Parties are required to provide for mutual acceptan ce of the test results from laboratories or testing 
facilities in their respective territories.  In Annex 12.5.8A of the Agreement, a Committee is set up to 
specifically deal with telecommunications standards. 
 (b) Sanitary and phytosanitary measures
 
41. Chapter 8 provides a regulatory framework fo r sanitary and phytosanitary (SPS) measures 
which is deemed by the Parties to be consiste nt with the WTO Agreement on the Application of 
Sanitary and Phytosanitary Measures (Article 8.2). 
                                                      
14 In addition to the provisions of this Chapter, th e Parties affirm their existing rights and obligations 
with respect to each other under the WTO Agreement (Article 9.2).  WT/REG169/3 
 Page 13 
 
 
42. Article 8.4 requires that the Parties base their SPS measures on: scientific principles, and that 
their application does not constitute a disguised restri ction to trade or arbitrarily discriminates against 
similar goods of the other Party and of any other c ountry where similar conditions exist.  Parties are 
referred to relevant international standards, gui delines or recommendations (with a view to seeking 
harmonization) in Article 8.5, and specific reference is made to the Office International des 
Épizooties , the Codex Alimentarius  and the International Plant Protection Convention .  Article 8.7 
deals with risk ass essment issues, and Article 8.7 allows  the Parties to adopt provisional SPS 
measures where available scientific information is  determined by a Party to be insufficient. 
43. The Agreement includes provisions for equivalence of the Parties' SPS measures (Article 8.6) 
and for recognition of the concepts of pest- or disease-free areas or areas of low pest or disease 
prevalence (Article 8.8).  With respect to control, inspection or approval procedures, Article 8.9 refers 
the Parties to apply the provisions in Annex C of the WTO SPS Agreement.  Article 8.10 sets out 
transparency requirements while Article 8.11 provides inter alia  for the establishment of a specialized 
Committee to implement the provisions of this Chap ter, monitor compliance, facilitate consultations, 
promote technical co-operation.  Article 8.12 allows  a Party to initiate consultations with the other 
Party with respect to the application or interp retation of a SPS measure under Chapter 8 of the 
Agreement.  The Parties may consider these cons ultations in the sense of Article 19.4 of the 
Agreement  (see paras. 67-70). 
2. Safeguard mechanisms 
44. Chapter 6 (Safeguard measures) st ates that the Parties retain their rights and obligations under 
Article XIX of GATT and the Agreement on Safeguards of the WTO.  Such safeguard actions are not 
subject to Chapter 10 on Dispute Settlement of the Agreement. 
45. Article 3.12 provides for specific emergency safeguards for agricultural goods.  Such 
emergency actions may be taken in circumstances when a product originating in a Party is being 
imported into the other Party in such increased quantities and under such conditions as to cause or 
threaten to cause serious injury or disturbance in the markets of like or directly competitive products.  
Measures permitted to be taken are the suspension of tariff reductions scheduled for the products 
concerned, or an increase in the rate of duty on th at product to a level not exceeding the MFN rate (or 
the basic rate of duty on which the tariff reductions are to be applied).  Before such a measure is 
taken, the concerned Party has to refer the matter to the Commission (see paragraph E.3.66 below) to allow for possible consultations with the other Party in view of seeking a mutually acceptable 
solution.  Where exceptional circumstances require immediate action, the importing Party may take 
the measure on a transitional basis without referra l to the Commission for a maximum period of 120 
days.  The safeguard measure must not exceed what is necessary to remedy th e difficulties that have 
arisen.  The Parties will hold consultations to dete rmine compensation and should they fail to reach an 
agreement the affected exporting Party may suspe nd the application of substantially equivalent 
concessions. 
3. Anti-dumping and countervailing measures 
46. Chapter 7 addresses anti-dumping and countervaili ng duty matters, stating that the Parties 
maintain their rights and obligations under Article  VI of the GATT, and the WTO Agreements on 
Implementation of Article VI of the GATT and on  Subsidies and Countervailing Measures.  Anti-
dumping or countervailing actions are not subject to Chapter 19 on Dispute Settlement of the 
Agreement. 
4. Subsidies and state-aid 
47. As noted above, Chapter 7 states that the Par ties maintain their rights and obligations under 
the WTO Agreement on Subsidies and Countervailing Measures.  Th e Agreement further addresses WT/REG169/3 
Page 14  
 
the issue of state-aid in the context of transparen cy under Chapter 17.  In that respect, Article 17.5 
allows either Party to request information on cases of  state-aid that it believes affect trade between the 
Parties.  The requested Party will make its best  efforts to provide non-confidential information. 
5. Other regulations 
 (a) Customs-related procedures
 
48. The Agreement contains several provisions that specifically deal with customs procedures.  
Some of these procedures have been further ela borated in the Uniform Procedures referred to in 
paragraph B.2.26 above, and have been supplemente d by an agreed text on mutual assistance, aimed 
inter alia  at developing mutual assistance, the exchange of information for detection, prevention and 
penalty of customs fraud, and technical training for officers.15  According to the Pa rties, the Customs 
Co-operation Agreement is still under negotiation and they have agreed to cooperate fully for an early 
conclusion of it.  Chile has issued a circular to inform customs and trade operators on customs matters 
related to the implementation of the Agreement.16  Korea Customs Services has issued the 
regulations17 and has held seminars and published bookl ets related to the implementation of the 
Agreement. 
49. Article 3.8 states that the WTO Customs Va luation Agreement will govern the customs 
valuation rules applied by the Parties to their reciprocal trade.  The Agreement allows the 
maintenance of customs user fees, however, it lim its their amount to the cost of services rendered 
(Article 3.10). 
50. Chapter 5 of the Agreement provides for customs procedures related to rules of origin.  In 
accordance with Article 5.2.1, single forms for the cer tificate of origin and declaration of origin have 
been agreed by the Parties (see Uniform Regulations).18  The declaration of origin is to be completed 
and signed by the producer and provided to the ex porter, the latter being responsible for processing 
the corresponding certificate of origin (in English).  Both documents will remain valid for two years 
from the date of signature (Article 5.2).  Certific ates of origin are not required in exceptional cases 
that are clearly identified in the Agreement (Article 5.5).19 
51. Customs authorities of the importing Party may conduct verifications of originating status 
granted to any good, and that after the importation of the good.  Verification can be made solely by means of written questionnaires, verification letters  and requests for information to the exporter or 
producer in the other Party; verification visits to th e premises of an exporter or a producer in the other 
Party; or any other method of communication customarily used by the customs administration of the Party in conducting an investigation.  These, a nd other detailed requirements and procedures relating 
to verification, are found in Articles 5.8 of th e Agreement and VIII of the Uniform Regulations. 
52. Articles 5.9 of the Agreement and IX of the Uniform Regulations govern the advanced ruling 
on determination of origin, prior to the good's importation.  Upon request, the competent customs authorities shall provide for the expeditious issuance of a written advanced ruling, on the basis of the 
                                                     
 
15 The text of the Uniform Regulations is available at http://www.mofat.go.kr/pdffiles/UE.pdf.   
16 Circular Office N°66 of 19.03.04, available at: 
http://www.aduana.cl/p 4_principal/antialone.html?page=http://www. aduana.cl/p4_principal/site/artic/20040324/
pags/20040324184120.html 
17  http://www.fta.go.kr/inc/html/down.php?board_id=75&file_id=1 (Korean only) 
18 These Regulations also include detailed instructions on how to complete these certificates forms. 
19 i.e. commercial or non-commercial importation of a good of a value not exceeding US$ 1,000 (a 
statement certifying that the goods qualify as originating ma y however be required in th e former case) or if the 
relevant Party has waived the requirement for a Certifi cate of Origin for the imported good.  Those exceptions 
apply on the grounds that importati on has taken place in good faith and has not otherwise been arranged for 
avoiding certification requirements.  WT/REG169/3 
 Page 15 
 
 
facts and circumstances presented by an importer, exporter or producer of the good qualifying as 
originating pursuant to the Agreement.  Advanced  ruling may be modified or revoked under certain 
circumstances (specified in the Ag reement); further, a good that is subject to an origin verification 
process or any instance of review or appeal in the territory of one of the Parties may not undergo an 
advanced ruling.  Articles 5.10 of the Agreemen t and X of the Uniform Regulations specify the 
circumstances and procedures related to rights of revi ew and appeal of determ inations of origin and 
advanced rulings. 
53. If preferential tariff treatment has not been cl aimed for a good which would have qualified as 
"originating", the Agreement provides that the importer may, upon presentation of specified 
documents, request a duty refund within one y ear from the date of import (Article 5.5.3) . 
54. Goods invoiced by a non-Party operator may bene fit from preferential treatment provided it is 
accompanied by a certificate of origin (Article 5.6) .  Provisions also exist regarding safeguarding 
confidential business information; criminal, civ il or administrative penalties; and customs co-
operation  (Articles 5.7, 5.11 and 5.13, respectivel y).  With respect to th e latter, the Agreement 
includes provisions on inter alia  the application of customs laws and regulations; requests for 
cooperation on verification procedures; mechanisms  for detecting and preventing the illicit shipment 
of goods; and storage and transmissi on of customs-related documentation. 
 (b) Competition policy  
55. Chapter 14 sets out a framework for co-operation and coordination of the Parties' competition 
authorities and for the implementation of their co mpetition laws.  Co-opera tion under this Chapter 
includes notification, consultation, exchange of non- confidential information and technical assistance.  
With respect to public enterprises and monopolies, Article 14.8 affirms the right of a Party to 
designate or maintain public and private monopolies according to their respective laws.  The Parties 
do not have recourse to the arbitral process of th e dispute settlement mechanism of the Agreement for 
any matter arising under this Chapter. 
 (c) Government procurement  
56. Chapter 15 establishes a regulatory framework of rights and obligations among the Parties 
with respect to their laws, regulations, proce dures and practices regarding government procurement.20  
Article 15.3 provides for national treatment and non-di scrimination in regards to goods (and services) 
of each Party, for the procuring entities covered, s ubject to specified minimum thresholds and certain 
exceptions (Annex 15.1). 
57. The Agreement contains a number of disciplin es with respect to procurement procedures 
covered by the Chapter.  These include: tendering  procedures, which except for certain listed 
circumstances are to be based on "open tendering pr ocedures" (Article 15.6);  publication of advance 
notices (Article 15.8);  procedures allowing suppliers to challenge alleged breaches of this Chapter 
(Article 15.13).  Article 15.5 provides for transparen cy through the publication of information relating 
to laws, regulations, judicial decision and administ rative ruling of general application and procedure 
regarding procurement.  Article 15.14 encourages the Pa rties to use, to the extent possible, electronic 
means of communication and to provide each other technical co-operation and assistance. 
58. The Agreement prohibits the use of offsets (A rticle 15.4) and contains obligations on 
technical specifications to avoid their use to create unnecessary obstacles to trade (Article 15.11).  
Technical specifications prescribed by entities w ill be in terms of performance and functional 
                                                      
20 It should be noted that Korea is a party to the WTO Government Procurement Agreement (GPA) and 
Chile is an observer. WT/REG169/3 
Page 16  
 
requirements rather than design and be based on intern ational standards, where they exist, and in the 
absence of these, on national technical regulations, r ecognized national standards, or building codes. 
59. Korea, which is a member of the WTO Ag reement on Government Procurement (GPA), 
grants to Chilean suppliers the eligibility to par ticipate in tendering for th e covered procurement under 
the KCFTA (Article 16.6.1); the threshold value a pplying to its central government entities' supplies 
is however lower under the KCFTA (SDR 50,000) than under the GPA (SDR 130,000). 
 (d) Intellectual property
 
60. Chapter 16 commits the Parties to provide each  other's nationals adequate and effective 
protection and enforcement of intellectual property ri ghts and to faithfully implement the international 
conventions they have acceded to, including the WT O TRIPS Agreement (Article 16.1).  Article 16.2 
allows the Parties to implement more extensive protection of intellectual property rights than is 
required under the Agreement provided it is not inconsistent with the KCFTA and the TRIPS 
Agreement. 
61. The Agreement includes provisions on trademarks (Article 16.3) and ge ographical indications 
(Article 16.4).  With respect to the latter, Annexes 16.4.3 (Korea), and 16.4.4 (Chile) list the 
geographical indications that the Parties have agreed  to protect under the Agreement.  Protection of 
the geographical indications listed in  Annex 16.4.5 are subject to consu ltations to be held between the 
Parties for the protection of additional geogr aphical indications.  The Agreement calls for 
enforcement of intellectual property rights consistent with the TRIPS Agreement (Article 16.5) and it 
provides for consultations under the dispute settlement  procedures of the KCFTA with respect to the 
implementation and interpretation of  this Chapter (Article 16.6). 
D. SECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT  
62. There is no specific provision in the Agreement regarding trade in goods in any particular 
sector, other than the emergency clause for agricu ltural goods provided for in Article 3.12 (see 
paragraph C.2.45 above). 
E. GENERAL PROVISIONS OF THE AGREEMENT  
1. Exceptions and reservations 
63. General exceptions and reservations are laid down in Chapter 20 of the Agreement.  Article 
20.1 stipulates that the general exceptions unde rstood under Article XX of the GATT 1994 and its 
interpretative notes are incorporated into and made  part of the KCFTA.  Other exceptions include 
measures concerning National Security (Article 20.2), Taxation (Article 20.3), and Balance Of 
Payments (Article 20.4). 
2. Accession 
64. There is no provision for the accession of third countries to the Agreement. 
3. Institutional framework 
65. Chapter 17 of the Agreement addresses transpar ency.  Provisions under this Chapter include 
the designation of contact points (Article 17.2); publication of laws, regulations, procedures and 
administrative rulings relating to matters covered by the Agreement (Article 17.3); notification and 
provision of information (Article 17.4); exchange  of information on state aid (Article 17.5);  
administrative proceedings (Article 17.6); and review and appeal (Article 17.7).  WT/REG169/3 
 Page 17 
 
 
66. Chapter 18 of the Agreement provides for th e establishment of a Free Trade Commission 
comprising the Minister of Foreign Affairs in the cas e of Chile and the Minister for Trade in the case 
of Korea, or their designees.  The Commission wi ll supervise the implementation of the Agreement 
and in the fulfilment of its functions it may, am ong others, modify the rules of origin established 
under the Agreement and, in order to accelerate th e tariff elimination process, the Parties' tariff 
elimination schedules.  The Commission is to establi sh its rules and procedures and it shall convene at 
least once a year in regular session; all of its decisi ons are to be taken by mutual agreement.  Chapter 
18 also requires each Party to designate a national organ to serve as secretariat for purposes of the Agreement and for all communications or notification to or by a Party.  The national organs are the 
General Directorate of Internationa l Economic Affairs of the Ministry of Foreign Affairs of Chile, and 
the Multilateral Trade Bureau of Ministry of Foreig n Affairs and Trade of Korea, or their successors. 
4. Dispute settlement 
67. Chapter 19 sets out the institutional arrangement s that apply to the settlement of disputes 
between the Parties regarding qu estions of interpretation or a pplication of the Agreement and 
whenever a Party considers that an existing or prop osed measure by the other Party is or would be 
inconsistent with the obligations under the Ag reement or causes nullification or impairment of 
benefits.  Article 19.3 provides that disputes rega rding any matters arising under both the KCFTA and 
the WTO Agreement may be settled in the forum sel ected by the complaining Party.  Once dispute 
settlement procedures have been initiated under either fo rum, this forum must be used to the exclusion 
of the other. 
68. Chapter 19 emphasises that the Parties will seek to resolve any matters affecting the operation 
of the Agreement through co-operation and consulta tions.  In this respect a Party may request in 
writing consultations with the othe r Party regarding any existing or proposed measures or any other 
matter that it considers might affect the operation an d the application of the KCFTA.  The Parties may 
also resort to good offices, conciliation or mediati on at any time.  If these procedures fail to resolve 
the matter, the Parties may request the establishment of an arbitral panel.  The panel will comprise 
three members normally selected from a roster of up to 15 individuals established by mutual 
agreement between the Parties no later than six mont hs after the entry into force of the Agreement. 
69. The panel will present to the Parties a final re port which will be binding and not subject to 
appeal.  This report will be made publicly available within 15 days of its delivery to the Parties.  
Unless the Parties decide otherwise, they will impl ement the panel decision in the manner and within 
the timeframe contained in the report.  Should th e Party complained against fail to implement the 
panel decision with respect to an inconsistent measure or the Parties fail to reach a mutually 
satisfactory agreement with respect to a measure causing nullification or impairment, within the 
timeframes set out in the Agreement, the complaini ng Party may suspend the application of benefits 
of equivalent effect.  (For furt her details, see the text-box below.) 
70. Section B of Chapter 19 sets out the institutional arrangements that apply to domestic 
proceedings and private commercial dispute settlements.   With respect to questions of interpretation 
or application of the Agreement in domestic judici al or administrative proceedings of a Party, the 
Commission will attempt to agree on an appropriate response.  Should that fail any Party may submit 
its own views on the matter to the judicial or administrative body.  The Agreement does not confer to private parties of a Party the right of action, unde r its domestic law, against the other Party on the 
grounds that a measure of the other Party is incons istent with the Agreement.  With respect to the 
settlement of international commercial disputes betwee n private parties in the free trade area, Article 
19.18 encourages the Parties to resort  to the use of arbitration or other alternative dispute resolutions 
and to provide appropriate procedur es to ensure observance of agre ements to arbitrate and for the 
recognition and enforcement of arbitral awards in such disputes. WT/REG169/3 
Page 18  
 
Dispute Settlement at a Glance  
Dispute Settlement Levels 
Chapter 19 of the Agreement provides for two levels of dispute resolution: 
• Level 1:  Consultation, good offices, conciliation and mediation.  
o Article 19.4 provides that a Party may request in writing consultations  with the other Party regarding any matter 
that it considers might affect the operation and application of the Agreement.  If at the end of the timeframes set 
out in Article 19.6 the matter has not been resolved, then a Party may request in writing the establishment of an 
arbitral panel. 
o Article 19.5 allows the Parties to undertake on a volunt ary basis and by agreement procedures of good offices, 
conciliation and mediation .  Once these procedures are concluded without an agreement between the Parties, the 
complaining Party may request the establishment of a panel. 
• Level 2:  Arbitration.  
o Article 19.6 sets out the conditions for a Party to request the establishment of an arbitral panel .  The written 
request of an arbitral panel mandates its establishment.   
o The required qualifications of panellists and the procedures  for the selection of a panel are outlined in Articles 
19.8 and 19.9 respectively. 
o Once a panel has been established, it will present to the Parties an initial report (Article 19.12) containing 
findings of facts, its determination of the matter befor e it and its recommendations, if any.  The Parties may 
submit written comments on this report.  Upon consider ation of these comments the panel may reconsider its 
report.  It will then issue the final r eport (Article 19.13) which will be binding on the Parties and not subject to 
appeal (Article 19.14). 
o Annexes 19.7 and 19.10 set out respectively the code of conduct for members of panels and the panel rules of 
procedures 
The Parties may have recourse to arbitration once the procedur es of level one have been exhausted.  In this respect, 
Article 19.1 emphasises that the Parties will seek to reso lve any matter affecting the operation of the Agreement through 
co-operation  and consultations . 
Effect of Panel Decision and Countermeasures  
• The final report of a panel is binding  on the Parties and not subject to appeal .  Unless the Parties decide otherwise, 
the panel decision will be implemented in the manner and within the time-frame prescribed in the final report (Article 
19.14). 
• In case of non-implementation of the panel's final report, ei ther in terms of a measure found inconsistent with the 
obligations of the Agreement or the Parties failing to r each a mutually satisfactory agreement with respect to a 
measure found to cause nullification or impairment, the co mplaining Party may suspend the application of benefits of 
equivalent effect  to the Party complained against.  Such suspension of benefits will last until the dispute is resolved 
(Article 19.15). 
Jurisdiction and Reference to WTO 
• The Agreement provides for compulsory jurisdiction  in the sense that upon delivery of a written request by a Party 
for the establishment of an arbitral panel, such panel will be established (Article 19.6). 
• With respect to matters arising under both the Ag reement and the WTO Agreement, a forum election clause  applies 
granting discretion to the complaining Party as to the choice  of the forum where the dispute is to be settled (Article 
19.3).  In addition to the choice of forum, Article 19.3 includes an exclusive forum clause  whereby once dispute 
settlement procedures have been initiated under either fo rum (Article 19.6 or the WTO Agreement), the forum 
selected shall be used to the exclusion of the other. 
 
5. Relationship with other agreements concluded by the Parties 
71. Article 1.3 states that the Parties affirm their ri ghts and obligations with respect to each other 
under the WTO Agreement and other international agre ements to which both Parties are party.  In 
case of inconsistency between such agreements and this Agreement, the latter will prevail to the 
extent of the inconsistency. 
72. The Agreement does not contain any reference to the relationship between the KCFTA and 
other regional trade agreements (RTAs) to which either Chile or Korea are presently parties (see Table II.10).  WT/REG169/3 
 Page 19 
 
 
Table II.10 – Chile and Korea: Participat ion in RTAs (notified and in force)  
GATT/WTO Notification Partner/Agreement Date of entry 
into force Type of agreement  
Year Provision(s) 
CHILE 
EFTA 1-Dec-04 Goods & services 2004 GATT Art. XXIV & GATS Art. V 
United States 1-Jan-04 Goods & servic es 2003 GATT Art. XXIV & GATS Art. V 
European Communities 1-Feb-03 Goods 2004 GATT Art. XXIV 
El Salvador 1-Jun-02 Goods & servic es 2004 GATT Art. XXIV & GATS Art. V 
Costa Rica 15-Feb-02 Goods & services 2002 GATT Art. XXIV & GATS Art. V 
Mexico 1-Aug-99 Goods & services  2001 GATT Art. XXIV & GATS Art. V 
Canada 5-Jul-97 Goods & services 1997 GATT Art. XXIV & GATS Art. V 
LAIA 18-Mar-81 Goods 1982 Enabling Clause 
CHILE AND KOREA  
GSTP 19-Apr-89 Goods 1989 Enabling Clause 
PTN 11-Feb-73 Goods 1971 Enabling Clause 
KOREA  
Bangkok Agreement 17-Jun-76 Goods 1976 Enabling Clause 
 WT/REG169/3 
Page 20  
 
ANNEX 
 
Indicators of trade liberalization under the KCFTA 
 
1. The aim of this Annex is to investigate the overall scope of tariff liberalization under the 
Agreement and to explore, from several angl es, its potential impact on mutual trade. 
2. The elimination of tariffs applicable between the Parties is revealed in the corresponding 
KCFTA schedules.  The scope of tariff liberalization can be measured in terms of the number of affected tariff lines at each liberalization stage and in  terms of the value of affected imports.  The 
share of imports at duty-free rates offers an insight into the liberalization of products currently traded 
among the parties, while the percentage of duty-free tariff lines points to the longer-term potential 
trade effects of the Agreement. 
3. Indicators of Chile 's tariff elimination schedule under the KCFTA are contained in Charts A.1 
and A.2.  Chart A.1 is based on a total of 7,936 tariff lines (HS 2002, at the 8-digit level).
21  Chart A.2 
is based on the corresponding value of imports into Chile from Korea for 2003.22 
Chart A.1 – Chile:  Schedule for tariff lib eralization, in terms of tariff lines 
(44.7%)
(31%)
(0.0%) (0.3%)(19.1%)
(3.7%)
05001000150020002500300035004000
entry into
force2007 2009 2011 2014 2017Number of tariff lines
020406080100
Per cent
Left-hand scale:  Number of tariff lines liberalized at each stage (% of total)
Right-hand scale:  Cumulative percentage
 
4. Upon entry into force of the Agreement, Chile freed Korean products from duties on 3,546 
tariff lines (44.7 per cent of the total), or 50.3 per cent of Chile's imports from Korea in 2003.  By year five (2009), the Agreement provides for the e nd of progressive duty elimin ation on a further 31 
per cent of tariff lines, corresponding to 15 per cent of 2003 imports.  By 2017, 98.8 per cent of tariff 
lines will be duty free; these account for 96.2 per cent of imports. 
                                                     
 
21 Schedule provided by the Chilean Authorities. 
22 The source for imports is COMTRADE (HS 6-dig it level).  Where multiple staging categories in 
Chile's tariff liberalization schedule apply to a single import, the longest staging period has been used, thus 
understating somewhat the pace of liberalization.  Such items account for 2.7 per cent of imports from Korea.  WT/REG169/3 
 Page 21 
 
 
Chart A.2 – Chile:  Schedule for tariff liber alization, in terms of import shares 
(11.2%)(18.9%)
(0.8%)(15.0%)
(0.0%)(50.3%)
0102030405060
entry into force 2007 2009 2011 2014 2017Per cent
020406080100
Per cent
Left-hand scale:  Percentage of 2003 imports liberalized at each stage
Right-hand scale:  Cumulativ e percentage
 
 
5. A comparison of Charts A.1 and A.2 above indicates a remarkable parallelism in the scope of 
Chile's trade liberalization at entry into force of the Agreement, in terms of tariff lines and of actual 
imports.  Such a parallelism becomes less pronounced  afterwards; in particular, duty-free concessions 
scheduled for the last stage (up to 2017), corresponding to just 3.7 per cent of tariff lines, affect nearly 
one-fifth of Chile's total imports from Korea in 2003. 
6. Indicators corresponding to Korea 's tariff elimination schedule under the KCFTA are 
contained in Charts A.3 and A.4.  Chart A.3 is based on a total of 11,281 tariff lines (HS 2002, at the 
10-digit level).23  Chart A.4 is based on the corresponding va lue of imports into Korea from Chile for 
2003.24  A vertical dotted line distinguishes in both ch arts the data relative to those products which 
will only be scheduled for tariff elimination at the end of the current DDA negotiations.25 
7. On the date of entry into force of the Agreem ent, 87.2 per cent of Korea's tariff lines became 
duty-free for imports from Chile, corresponding to 45 .5 per cent of 2003 imports.  The additional 6.7 
per cent of tariff lines that will be subject to tari ff elimination in years five and seven (i.e. by 2011) 
account for 47 per cent of those imports.  In 2020, 96 .3 per cent of Korean tariff lines will be duty free 
for Chilean exporters; this translates into 99.9 per cent of Korea's 2003 imports from Chile.  In the 
case of Korean commitments under the KCFTA, the ta riff-line method of capturing the scope of trade 
liberalization shows a considerably faster pace of  liberalization than the trade value indicator. 
 
                                                      
23 Schedule provided by the Korean Authorities.  The figures used in the main text are based on the 
tariff liberalization schedule in HS 1996, also provided by  Korea, which contains a total of 11,170 tariff lines. 
24 The source for imports is COMTRADE (HS 6-dig it level).  Where multiple staging categories in 
Korea's tariff liberalization schedule (which is at an HS 10-digit level) apply to a single import (at an HS 6-digit 
level), the longest staging period has been used, thus understating somewhat the pace of liberalization.  Such items account for 1.1 per cent of all trade.  
25 For tariff-rate quotas, only the pr evailing preferential tariff rate ha s been taken into account in Table 
A.3.  Such tariff quotas applied to $151,920 of imports from Chile into Korea in 2003. WT/REG169/3 
Page 22  
 
Chart A.3 – Korea:  Schedule for tariff liberalization, in terms of tariff lines 
(87.2%)
(6.3%)
(0.4%) (0.0%)(2.4%)(0.1%)(3.5%)
020004000600080001000012000
entry into
force2009 2011 2013 2014 2020 Post-DDANumber of tariff lines
020406080100
Per cent
Left-hand scale:  Number of tariff lines liberalized at each stage (% of total)
Right-hand scale:  Cumulative percentage
 
 
Chart A.4 – Korea:  Schedule for tariff lib eralization, in terms of import shares 
(0.1%) (0.0%)(7.4%)
(1.5%)(45.5%) (45.5%)
(0.0%)
0102030405060
entry into
force2009 2011 2013 2014 2020 Post-DDAPer cent
020406080100
Per cent
Left-hand scale:  Percentage of 2003 imports liberalized at each stage
Right-hand scale:  Cumulative percentage
 
 
  WT/REG169/3 
 Page 23 
 
 
8. Though implied by the above exploration of the overall scope of tariff liberalization under the 
KCFTA, more detailed statistics are necessary to grasp the competitive gains offered by KCFTA 
preferential concessions.  This requires a comparis on between the scheduled elimination of tariffs 
applied to the Parties' mutual imports and the dut y rates applied by Chile and Korea to MFN imports.  
Such a comparison is shown in Tables A.1 (Chile) and A.2 (Korea) below, broken into agricultural, 
industrial and total products.  Applied MFN duty rates in 2004, the year of entry into force of the 
KCFTA, serve as a basis to the comparison. 
9. In 2004, Chile had a flat MFN rate (6 per cent) that a pplied to over 99 per cent of tariff lines, 
as suggested in Table A.1.  Immedi ately after entry into force of the Agreement, Korean exporters 
enjoyed an (unweighted) average margin of preferen ce of over 4 percentage points, as well as a sharp 
increase (to nearly 45 per cent) in the share of Chile's duty-free lines.  This development was 
particularly marked in the case of agricultural prod ucts, where virtually 95 per cent of Chile's tariff 
lines became duty free upon entry into force; the additional liberalization scheduled until 2017 is 
minimal.  Contrastingly, a slower pace has been scheduled for the tariff liberalization of industrial 
imports into Chile from Korea, though as from year fi ve (2009) they will be granted, on average, a 
margin of preference representing 5.1 percentage points on the MFN rate applied in 2004, with 
Korean imports entering duty free for ov er two-thirds of Chile's tariff lines. 
Table A.1– Chile:   Indicators of tariff rates applied to MFN and Korean imports 
ALL PRODUCTS Agricultural products Industrial products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of 
goods Year 
Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines  
(%) Overall  
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines  
(%) Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines  
(%) 
MFN 2004 6.0 6.0 0.4 6.1 6.1 0.0 5.9 6.0 0.5 
2004 1.9 3.3 44.7 0.3 4.8 94.2 2.2 3.3 33.8 
2007 1.6 3.0 44.7 0.3 5.5 94.2 1.9 2.9 33.8 
2009 0.8 3.3 75.7 0.3 5.3 94.6 0.9 3.3 71.6 
2011 0.4 1.6 76.0 0.3 5.1 94.6 0.4 1.4 71.9 
2014 0.2 3.2 95.1 0.3 6.0 95.7 0.1 2.7 95.0 Korea 
2017 0.1 6.0 98.8 0.3 6.0 95.7 0.0 6.0 99.5 
a   "On dutiable" excludes duty-free tariff lines  
Source : IDB (2003 MFN); data furnished by Chile (MFN 2004, preferential rates for  2004). 
 
10. Table A.2 provides similar data for Korea , on MFN rates and the preferential rates applied to 
Chile.  Korea has a variable MFN tariff structure.  Its (unweighted) average MFN rate of 12 per cent 
thus masks a diversity of duty levels.  The (unw eighted) average MFN rate applied to agricultural 
products is 42.5 per cent, while that applied to i ndustrial products is 6.6 per cent.  That diversity 
complicates the interpretation of the information cont ained in Table A.2, which basically consists of 
(unweighted) averages. 
11. Nevertheless, Table A.2 indicates that, as from entry into force of the Agreement, Chilean 
exporters into Korea enjoyed a relative margin of  preference of 98 per cent in industrial products vis-
à-vis  the average MFN applied tariff in 2004, and a re lative margin of preference of 81 per cent in 
agricultural products.26  In the following years, the schedul ed pace of liberalization of Chilean 
industrial products into Korea is faster than the liber alization applied to agricultural products, which is 
the reverse of Chile's liberalization profile.  Th e (mainly agricultural) products that are to be 
scheduled for liberalization by Korea at the end of   the DDA negotiations include those for which the 
applied MFN tariffs are the highest. 
 
                                                      
26 Relative margins of preference are used for Korea given its variable tariff structure. WT/REG169/3 
Page 24  
 
Table A.2– Korea:   Indicators of tariff rates applied to MFN and Chilean imports 
ALL PRODUCTS Agricultural Products Industrial Products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of 
goods 
 Year 
Overall  
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff 
lines Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff 
lines Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff 
lines 
MFN 2004 12.0 13.8 13.4 42.5 43.3 1.8 6.6 7.8 15.4 
2004 1.4 10.2 86.8 8.2 10.8 24.0 0.1 6.1 98.1 
2009 0.4 5.6 93.1 2.4 5.8 58.7 0.0 3.5 99.3 
2011 0.2 3.5 93.5 1.4 3.7 61.1 0.0 2.1 99.3 
2013 0.1 1.6 93.5 0.7 1.7 61.1 0.0 0.7 99.3 
2014 0.0 1.1 96.1 0.3 1.2 75.7 0.0 0.0 99.8 
2020 0.0 0.4 96.2 0.1 0.4 76.5 0.0 0.0 99.8 Chile 
Post-
DDA 150.9 150.9 0 150.7 150.7 0 154.6 154.6 0 
a  "On dutiable" excludes duty-free tariff lines. 
Source:  IDB (2003, 2004 MFN);  data furnished by Korea (preferential rates for 2004) 
 
12. How do the market openings described above tr anslate into market access opportunities in 
each of the Parties for goods of export interest to th e other?  Tables A.3 and A.4 attempt to illustrate 
those opportunities for a subset of Korea's and Chile's  products.  These, the top 25 products (at the HS 
6-digit level) exported to the world in 2002-2003, are deemed to closely reflect the comparative 
advantage of the Parties' exports. 
13. Table A.3 shows the market access opportunities in Chile  for Korea's top 25 exports, which in 
2002-2003 accounted on average for 49.4 per cent of  Korea's global exports.  The table shows at 
which year all  HS 8-digit tariff lines corresponding to the product definition (i.e. applying to the 6-
digit HS code used to capture the volume of trade)  will become duty-free in Chile, and the applicable 
rules of origin. 
14. Under the KCFTA, a margin of preference varyin g from 0 to 6 percentage points has been 
granted by Chile for Korea's top 25 export products.  Of these, which cover a total of 123 HS 8-digit 
tariff lines, in 77 Korea gains immediate duty-free access in Chile; for a further 41, Korea gains progressive reductions in the tariff rate starting in 2004 with duty-free access as of 2009.  Only 3 
products, including some types of vessels and four-w heel road vehicles, will get full duty-free access 
in Chile in 2017 (though duty re ductions begin in 2010).  Korea gains immediate duty-free access in 
Chile's market for its top five global exports (w hich accounted for 27 per cent of global exports in 
2002-2003). 
15. Table A.4, built up on the same basis as Table A.3, shows the market access opportunities in 
Korea  for Chile's top 25 exports (at the HS 6-digit level) in 2002-2003, which accounted on average 
for 68.4 per cent of Chile's exports to the world.  The table shows at which year all
 HS 10-digit tariff 
lines corresponding to the product definition (i.e. applyi ng to the 6-digit HS code used to capture the 
volume of trade) will become duty-free in Korea, and the applicable rules of origin. 
16. The margin of preference granted to Chile's  top 25 exports under the KCFTA varies from 0 to 
45 percentage points.  Among these e xports, one product (apples) is ex cluded from tariff liberalization 
under the KCFTA by Korea.  The other 24 products correspond to 55 HS 10-digit tariff lines.  On 31 
of these, Chile gains immediate duty-free access in Korea, and for 17 additional tariff lines, it will 
benefit from progressive reductions in the duty rate starting in 2004 with total liberalization as of 
2009 or 2011 (the latter in the case of a single tari ff line).  The remaining eight tariff lines will have 
duty-free access in Korea by 2014; these comprise fr esh grapes and some fish products.  Duty-free 
access in Korea for Chile's leading global export, copper cathodes, which accounted for 22 per cent of  WT/REG169/3 
 Page 25 
 
 
total exports in 2002-2003, is scheduled for 2011.  Longer liberalization pe riods tend to apply to 
products where Korea's MFN tariff rates are relatively higher. 
Table A.3 – Chile:  Market access opportunities under the Agreement, for Korea's top 25 exports 
Korea's top 25 export products in 2002-2003 Conditions of access to Chile's import market 
Under the KCFTA 
Duty-free in: Share in 
global 
exports 
Avge MFN 
applied tariff 
2004 
2009 
2017 
(%) HS number & 
description of the product 
(%) Number of HS 8-
digit lines Origin rules* 
6.81 854221  Electronic integrated circ uits and micro-assemblies, 
digital  6% 3   change in subheading 
and RVC of 45% or 30% 
6.75 852520  Transmission apparatus incorporating reception 
apparatus 6% 4   CTH and RVC of 35% or 
30% 
5.06 870323  General purpose, off road and similar vehicles 
equipped with four wheel drive, of a cylinder capacity > 1500 cc but < 3000 cc  6% 6   RVC of 45% or 30% 
4.54 847330  Parts and accessories of automatic data processing 
machines 6% 4   CTH 
3.39 890120  Tankers, of a gross tonnage exceeding 3.500 tons 
and/or of a length of 120 m or more 0% 2   CTC; or CTH and RVC of 
45% or 30% 
3.14 847160  Input or output units, whether or not containing 
storage units in the same housing 6% 13   CTH from any other 
heading except 84.13; or 
a CTH and RVC of 45% or 30% 
2.69 271019  Petroleum oils and oils obtained from bituminous 
minerals, other than crude; pr eparations not elsewhere 
specified or included 6% 1 12  CTH 
2.21 852990  Parts suitable for use solely or principally with 
transmission apparatus, other 6% 8   CTH 
2.14 890190  Other vessels for transport of goods and other 
vessels for transport of both persons and goods :  vessels exceeding 3.500 tons and/or 120m length 3% 3  3 CTC; or CTH and RVC of 
45% or 30% 
1.23 870899  Parts and accessories of the motor vehicles of 
headings 87.01 to 87.05, other 6%  7  CTH; or no change in 
tariff classification but RVC of 45% or 30% 
1.20 852812  Reception apparatus for television, whether or not 
incorporating radio-broadcast receivers or sound or video 
recording or reproducing apparatus; video monitors and video projectors, colour 6% 8   CTH provided RVC of 
45% or 30% 
1.16 870322  General purpose, off road and similar vehicles 
equipped with four wheel drive :  of a cylinder capacity > 
1000 cc but < 1500 cc  6% 5  1 RVC of 45% or 30% 
1.12 870324  General purpose, off road and similar vehicles 
equipped with four wheel drive :  of a cylinder capacity 
exceeding 3 000 cc 6% 5 1  RVC of 45% or 30% 
0.89 847170  Storage units 6% 3   CTH except from heading 
84.13; or a CTH from 
84.13 and RVC of 45% or 
30% 
0.86 271011  Light oils and preparations 6%  7  CTH 
0.84 854229  Electronic integrated circuits and microassemblies, 
other 6% 1   change in subheading 
and RVC of 45% or 30% WT/REG169/3 
Page 26  
 
Korea's top 25 export products in 2002-2003 Conditions of access to Chile's import market 
Under the KCFTA 
Duty-free in: Share in 
global 
exports 
Avge MFN 
applied tariff 
2004 
2009 
2017 
(%) HS number & 
description of the product 
(%) Number of HS 8-
digit lines Origin rules* 
0.74 710813  Gold (including gold plated with platinum), 
unwrought or in semi-manufactured forms, or in powder 
form;  other semi-manufactured forms 6% 1   CTC 
0.68 841510  Air conditioning machines, comprising a motor-
driven fan and elements for changing the temperature and 
humidity, including those machines in which the humidity 
cannot be separately regulated;  window or wall types, self-contained or "split-system" 6% 1 1  CTH; or change in 
subheading and RVC of 
45% or 30% 
0.67 847130  Portable digital automatic data processing 
machines, weighing not more than 10 kg, consisting of at least a CPU, a keyboard and  display 6%  1  CTH except from heading 
84.13; or change from heading 84.13 and RVC of 45% or 30% 
0.66 854060  Other cathode-ray tubes 6% 1   CTH or subheading and 
RVC of 45% or 30% 
0.60 540761  Of polyester only, single, measuring per single yarn 
more than 75, but less than 80 decitex, and 24 filaments per yarn, and a twist exceeding 900 turns per metre 6%  8  CTC 
0.58 870332  General purpose, off road and similar vehicles 
equipped with four wheel drive : of a cylinder capacity > 1,500 cc but < 2,500 cc 6% 5  1 RVC of 45% or 30% 
0.53 852290  Printed circuit assemblies for apparatus under 
headings 8519; 8520 or 8521 6% 2   CTH 
0.49 847989  Mixing, kneading, crushing, grinding, screening, 
sifting, homogenizing, emulsifying or stirring machines 6%  4  CTH; or in subheading 
and RVC of 45% or 30% 
0.48 390330  Acrylonitrile-butadiene-st yrene (ABS) copolymers 6% 1   CTH; or no change in 
tariff classification but a RVC of 45% or 30% 
 TOTAL OF ABOVE  77    41 5 
* CTH=Change in tariff heading, CTC=Change in tariff chapter, RVC=Regional value content.  RVC is based on either a 
build-down method or a build-up method.  (See Section B.2 for further details). 
Source :  Trade data 2002, 2003 (Comtrade), MFN rates and libera lization schedule taken from data provided by Chile. 
 
 
Table A.4 - Korea:   Market access opportuniti es under the Agreement, for Chile's top 25 exports 
Chile's top 25 export products in 2002-2003  Conditions of access to Korea's import market  
Under the KCFTA  
Duty-free in:  Share in 
global 
exports  
Avge MFN 
applied tariff  
2004 
2009 
2011 
2014 
(%) HS number & 
description of the product  
(%) Number of HS 10-digit lines Origin rules*  
22.27 740311  Copper cathodes and sections of 
cathodes 5%   1  CTC 
11.05 260300  Copper ores and concentrates 1% 1    CTC 
3.34 080610  Fresh grapes 45%    1a CTC 
2.99 220421  Wine in containers holding 2l or less 15%  3   CTH but a RVC of 45 
% or 30%   WT/REG169/3 
 Page 27 
 
 
Chile's top 25 export products in 2002-2003  Conditions of access to Korea's import market  
Under the KCFTA  
Duty-free in:  Share in 
global 
exports  
Avge MFN 
applied tariff  
2004 
2009 
2011 
2014 
(%) HS number & 
description of the product  
(%) Number of HS 10-digit lines Origin rules*  
2.86 470321  Chemical wood pulp, soda or 
sulphate, semi-bleached or bleached, coniferous 0% 2    CTH 
2.74 9999AA  unclassified       
2.23 290511  Methanol 3% 1    CTH; or no change in 
tariff classification but 
a RVC of 45 % or 30% 
1.99 440710  Wood sawn or chipped lengthwise, 
coniferous 5%  8   CTH 
1.89 740200  Unrefined copper 0% 2    CTC 
1.82 030410  Fish, fresh or chilled 20% 6    CTC 
1.70 230120  Flours, meals and pellets of fish or of 
crustaceans 5%    2 CTC 
1.53 030420  Frozen fish fillets 10% 1 3  2 CTC 
1.39 710812  Gold, other unwrought forms 3% 2    CTC 
1.33 080810  Apples 45% Excluded 
1.14 261310  Molbdenum ores and concentrates, 
roasted 1% 1    CTC 
1.09 740319  Refined copper and copper alloys, 
other 5% 3    CTC 
1.08 271011  Light oils and preparations 3.6% 6    CTH 
1.05 440910  Wood (including strips and friezes 
for parquet flooring, not assembled), coniferous 8%  1   CTH 
0.89 470329  Chemical wood pulp, non-coniferous 0% 2    CTH 
0.83 030319  Frozen fish, other  10%  1   CTC 
0.73 030490  Fish fillets and other fish, fresh, 
chilled or frozen, other 10%    3 CTC 
0.70 280120  Iodine 5.5% 1    CTH; or no change in 
tariff classification but a RVC of 45% or 30% 
0.63 283421  Nitrates, of potassium  5.5% 1    CTH; or no change in 
tariff classification but a RVC of 45% or 30% 
0.61 440122  Wood in chips or particles, non-
coniferous 2% 1    CTH 
0.58 470311  Chemical wood pulp, soda or 
sulphates, unbleached, other than dissolving grades, coniferous 0% 1    CTH 
 TOTAL OF ABOVE 31         16          1          8 
* CTH=Change in tariff heading, CTC=Change in tariff chapter, RVC=Regional value content.  RVC is based on either a 
build-down method or a build-up method.  (See Section B.2 for further details). 
a Duty elimination aaplies on a seasonal basis (1 November to 30 April of each year). 
Source :  Trade data 2002, 2003 (Comtrade), MFN rates  2004 (IDB), liberalization schedule taken from data provided by 
Korea  
 
 
 WT/REG169/3 
Page 28  
 
17. Chart A.5 portrays the rules of origin applied to  the top 25 exports of both Chile and Korea.  
While the main origin rule criterion facing market access at preferential rates for these exports is the 
change of HS heading (CTH), change of HS chap ter is also of importance, especially for Chile's 
exports (many of which are agricultural and minera l products, generally subject to change of HS 
chapter requirements).  In some cases, two requirement s apply jointly.  Alternative rules of origin are 
available for ten top exports of Korea and three of Chile.  
Chart A.5:  Rules of origin applicable to the top 25 exports of Chile and Korea  
0510152025
Chile's exports Korea's exportsRVC
Change of Subheading and RVC
Change of Chapter
CTH and exception
CTH and RVC
Change of Heading  (CTH)
 
__________ Note: First rules of ori gin onl y