WORLD TRADE  
ORGANIZATION   
WT/REG296/M/1 
5 July 2012  
 
(12-3579) 
Committee on Regional Trade Agreements 
Sixty-fifth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
THE EUROPEAN UNION AND THE REPUBLIC OF KOREA,  
GOODS AND SERVICES 
 
Note on the Meeting of 19 June 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 65th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/3940 dated 8 May 2012. 
2. Under Agenda Item B.III of this session, the CRTA considered the Free Trade Agreement 
(FTA) between the European Union and Korea (her einafter the 'Agreement'), goods and services.  
3. The Chairman said that the Agreement had entere d into force on 1 July 2011.  It had been 
notified to the WTO by the Parties on 7 July 2011 under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an Agreement establishing 
a free trade area (document WT/REG296/N/1) and under GATS Article V:7(a) as an Agreement providing for the liberalization of trade in services within the meaning of Article V of the GATS (document S/C/N/594).  The text of the Agreement w as available, together with its Annexes, on the 
Parties' official websites.  The Factual Presentation on the goods and services aspects 
(document WT/REG296/1 dated 29 Ma rch 2012) had been prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671).  In addition, 
written questions and replies on this Agreement had been distributed in document WT/REG296/2 
dated 14 June 2012. He proposed to organize the cons ideration of the Agreement by first asking the 
Parties and then other Members to give any general comments and then use the Factual Presentation, 
document WT/REG296/1, to guide the debate.  
4.  The representative of Korea said it was a ple asure to have the opportunity to discuss the 
Korea-EU Free Trade Agre ement.  He said Korea was a str ong supporter of the WTO multilateral 
trading system and an active participant in the current DDA negotiations.  At the same time, it was 
actively pursuing an FTA policy because it believed th at FTAs could be compatible with, and even 
supplementary to, the WTO.  Of course, not all FTAs were necessarily so, which was why the CRTA 
reviewed RTAs to see whether they were compatib le with WTO principles.  The Korea-EU FTA was 
the most comprehensive, high-level trade deal that e ither Korea or the EU had concluded.  The Parties 
were of the view that it was fully consistent w ith the principles and rules of the WTO and fully 
satisfied the WTO requirement to cover "substantially  all the trade" in goods and "substantial sectoral 
coverage" in services as provided for in GATT Article XXIV and GATS Article V.   
5. In trade in goods, the Parties had achieved a hi gh level of liberalizati on in terms of tariff 
elimination.  Within five years, 93.6% of Korean tariffs and 99.6% of EU ta riffs would be removed.  
In terms of trade, these numbers were equal to 97% of Korean imports from the EU and 100% of WT/REG296/M/1 
Page 2  
 
  Korean exports to the EU.  In particular, 90.7% of  Korea's industrial tariffs and 97.3% of the EU's 
industrial tariffs had been removed immediately upon the provisional application of the Agreement on 
1 July 2011.   
6. In services, the Agreement covered all the sectors described in the Services Sectoral 
Classification List (document MTN.GNS/W/120) except h ealth related and social services for Korea.  
It also covered all four modes of supply of ser vices.  In this way, the Agreement had achieved 
liberalization that went beyond the Parties' ex isting GATS commitments.  While Korea had made 
commitments in 98 of 155 services sectors in its GATS Schedule, it had made specific commitments in 115 sectors under the FTA.  As the Factual Presentation showed, Korea had made additional 
commitments exceeding those under the GATS in a num ber of sub-sectors including legal services, 
veterinary services, and research and de velopment services on natural sciences.   
7. As a comprehensive Agreement, the FTA's disci plines and commitments went beyond market 
access commitments in trade in goods and services and extended to other important trade areas such 
as government procurement and intellectual property ri ghts.  With regard to government procurement, 
the Parties had agreed to early implementation of th e recent amendments to the WTO GPA.  The texts 
had already been incorporated into the Ko rea-EU FTA and specific commitments would 
automatically be merged into the Agreement when  the amended GPA entered into force.  For the 
protection of intellectual property rights, the Part ies had committed to high standards that went 
beyond those of the TRIPS Agreement.  For example,  the Korea-EU FTA expanded the duration of an 
author's rights to 70 years from 50 years after th e author's death.  The Korea-EU FTA also had 
introduced a Chapter on trade and sustainable developm ent.  Based on this Chapter, the Parties would 
make joint efforts to find a balanced approach to trade liberalization while respecting equally 
important social values such as labour rights and e nvironment protection.  To further facilitate the 
participation of civil society in this process, the Ko rea-EU FTA also established a civil society forum.  
It appeared to be too early to evaluate the effect s of the Agreement on bilateral trade and investment, 
since the Agreement had entered into force in July 2011.  However, Korea was of the view that this 
FTA would play a substantial role in contributing to  the growth of bilateral trade in goods, services 
and investment, laying an excellent foundation for the Parties to develop a strong economic 
relationship.  He concluded  by saying that this FTA reflected the strong will of the Parties to choose 
trade liberalization instead of protectionism as a way to overcome current economic difficulties.  He 
believed that this firm belief in free trade was shar ed by all Members at this meeting and that this 
would serve as a catalyst to facilitate furt her progress in the current DDA negotiations. 
8. The representative of the European Union said that the EU-Korea FTA had been signed on 
6 October 2010 and had been provisionally applied si nce 1 July 2011.  Indeed, the Parties would soon 
be celebrating the first year anniversary of the Ag reement's implementation.  To date 14 of 27 EU 
Member States had ratified the FTA;  once all Member States had completed ratification, the Agreement would be concluded.  It was the mo st comprehensive Agreement that the EU had 
completed and provided for the elimination of impor t duties on nearly all products with far reaching 
liberalization of trade in services and industrial sectors.  It also provided strong disciplines in important areas such as intellectual property rights, p ublic procurement, competition, transparency in 
regulation, strengthened co-operation in customs a nd sanitary and phytosanitary matters and technical 
barriers to trade.  Specific commitments on no n-tariff barriers in sectors such as automotive, 
pharmaceuticals and electronics had been agreed.  Comprehensive provisions on sustainable 
development had been included, which provided a balanced approach to liberalizing trade while 
confirming the Parties' commitments to labour and environmental standards.  Finally, it included a 
Cultural Cooperation Protocol building on UNESCO. 
9. The Agreement's trade in goods provisions covered products in all Chapters of the 
Harmonized System.  Only a few exceptions, con cerning agricultural products, would not be fully 
liberalized.  The FTA established a free-trade area over a transition period of a maximum of five years  WT/REG296/M/1 
 Page 3 
 
 
  for industrial products, with a limited number of pr oducts to be liberalized over longer time periods.  
Agricultural products would be fully liberalized except products such as rice or garlic over a 
maximum of twenty years.  Overall only 42 EU and 57 Korean tariff lines were excluded from tariff elimination, representing respectively less than 0.1%  and 0.03% of imports by value from Korea and 
from the EU.  Upon provisional application of the FTA on 1 July 2011, 93.8% of the EU's tariff was 
duty-free for imports from Korea, corresponding to 87.6% of imports by value from Korea.  At the 
end of the implementation period, 99.5% of imports  from Korea and from the EU in terms of tariff 
lines, representing 99.9% of the value of imports from Korea and from the EU, would be duty free.  
10. As already indicated, the Agreement was not limited to the elimination of duties and 
non-tariff restrictions on bilateral trade, important  though that was.  It included commitments on 
services covering all modes of supply.  While in  its GATS schedule the EU  had covered 115 out of 
155 services sectors, the FTA significantly enlarged the scope of coverage.  However, some services, 
such as audiovisual services remained excluded.  
11. In intellectual property rights, the EU -Korea FTA included provisions covering inter alia  
copyright, designs and geographical indications  which complemented and updated the TRIPS 
Agreement.  A strong section on enforcement of intellectual property rights was also included.  With 
regard to government procurement, the FTA offered the opportunity to expand procurement 
opportunities to public works concessions and "Build -Operate-Transfer" (BOT) contracts not yet 
covered by the existing Government Procuremen t Agreement (GPA) commitments and envisaged 
automatic incorporation of the recent amendments to the GPA once they were in force.  In the 
competition chapter, the Parties had agreed to prohi bit and sanction certain practices and transactions 
involving goods or services which distorted competiti on and trade between them .  This implied that 
anti-competitive practices such as, for instance, cartels or abusive behaviour by companies with a 
dominant market position and anti-competitive mergers,  would not be tolerated by the Parties and 
would be subject to effective enforcement action, as they harmed consumers a nd led to higher prices.  
The section on subsidies provided that the Parties agreed to remedy or remove distortions to 
competition caused by subsidies in so far as they aff ected international trade.  Overall, the EU was 
confident that this Agreement would significantly contribute to growth and enhancement of the EU's 
strong trade and economic relationship with Korea.  In  fact, overall bilateral trade between the EU and 
Korea had risen from the date of provisional applica tion of the FTA when the first tariff cuts kicked 
in. The EU was committed to supporting the mu ltilateral system and believed that bilateral 
agreements, such as the EU-Korea FTA, could comple ment this system, if they were comprehensive 
and far reaching.  It also shared Korea's assessment  that this Agreement covered "substantially all the 
trade" in goods and "substantial sect oral coverage" in services and was therefore fully consistent with 
the provisions of Article XXIV of GATT and Article V of GATS. 
12. The representative of Australia thanked the Pa rties for the answers to the questions his 
delegation had submitted which were still being analy sed in capital.  He looked forward to receiving a 
response to the question which had not yet been answered.  
13. The representative of Japan said her delegation un derstood that the EU, as stated in its trade 
strategy in 2006, had been seeking to conclude a ne w generation of high level, comprehensive RTAs.  
Japan considered that the EU-Korea FTA represented an  achievement in this regard.  As cited by EU 
Trade Commissioner Karel de Gucht, this FTA was recognized as a benchmark.  As Japan was 
engaged in a scoping exercise with the EU it had a si gnificant interest in this FTA and attached great 
importance to its review under the TM.  Japan ha d submitted questions, some of which had already 
been replied to by the Parties.  With regard to trade in goods, Japan was interested in the scope of 
international standards setting bodies envisaged in the Agreement.  For trade in services, Japan had 
submitted questions on for example, the scope of MFN treatment and the inclusion of the ratchet 
effect.  On intellectual property rights, Japan had submitted questions on geographical indications, 
especially Korea's relevant domestic laws and regu lations in this area and the inter-relationship in WT/REG296/M/1 
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  application.  Regarding trade and sustainable development, Japan had submitted questions on the 
incorporation of other international agreements  into this FTA, such as ILO Conventions and UN 
Framework Convention on Climate Ch ange and its Kyoto Protocol.   
14. The representative of Canada thanked the Parties for their responses and said that if his capital 
had follow-up questions, he would forward them to the Parties. 
15. The representative of the United States expre ssed appreciation for the responses received 
from the Parties.  Her delegation would re-submit question 57 in the Q&R document pertaining to the 
GATS to which the Parties had not responded. 
16. The representative of Japan said her delegati on would re-submit question 40 in the Q&R 
document on the movement on natural persons. While  appreciating the information provided by 
Korea, Japan wanted to know if Korea had amende d its domestic legislation to comply with the 
commitment regarding graduate trainees under the Agreement. 
17. In response, the representative of the European Union said that a reply to question 57 was still 
under discussion as the Parties had complementary interpretations, but that it would be provided.  The 
United States had asked the Parties to explain ho w local presence requirements of the kind described 
in the footnote to subparagraph 2(a) of Article 7.5 were included within the category of measures that 
created "limitations on the number of service supp liers".  The EU's response was that the quoted 
footnote clarified that local presence requirements required a service supplier of the other Party to 
have an establishment or to be resident in a Part y's territory as a condition for the cross-border supply 
of services and as such were prohibited between the Parties unless they were included in the respective lists of commitments.  Regarding the second part of question 57 submitted by the United 
States which made reference to Article XVI.2 of the GATS and the provisions of the Agreement, he 
said that it was not the intention in the Agreement to interpret the provisions of the GATS. 
18. The representative of Korea said that the Partie s had done their best to provide responses in 
time for the meeting and that they would provide replies to outstanding questions in writing.  On 
question 57, he clarified that the position of Kor ea was not the same as that of the EU;  Korea's 
response to question 57 woul d be provided in writing. 
19. The representative of the United States thanked the EU for its response and made note of the 
fact that Korea did not yet have a response.  She i ndicated that she would need to raise the issue at a 
future meeting if she did not get writte n responses to her delegation's questions. 
20. The representative of Australia said his de legation had a follow-up question which it would 
pursue bilaterally with the Parties. 
21. The Chairman said that the consideration of the goods and services aspects of the Free Trade 
Agreement between the European Union and Korea had allowed the Committee to clarify a number of 
questions and that oral discussion of the Agr eement could be concluded in accordance with 
paragraph 11 of the TM.  If any delegations wished  to ask follow up questions they were invited to 
forward submissions in writing to the Secretariat by 26 June 2012 and the Parties were asked to 
submit replies in writing by no later than 10 Ju ly 2012.  If responses had not been submitted by 
10 July, the Committee would revert to this Agreem ent at its next meeting.  In accordance with 
paragraph 13 of the TM all written submissions, as we ll as minutes of the meeting would be circulated 
promptly, in all WTO official languages, and would be made available on the WTO website. 
22. The Committee took note of the comments made. 
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