RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG169/M/1 
24 November 2005 
 
 (05-5587) 
Committee on Regional Trade Agreements 
Fortieth Session  
 
 
 
EXAMINATION OF THE FREE TRADE AGREEMENT  
BETWEEN THE REPUBLIC OF KOREA AND CHILE 
 
Note on the Meeting of 26 July 2005  
 
Chairman: Mr. R. Saborío (Costa Rica) 
  
1. The meeting was convened in document WTO/AIR/2624. 
2. Under Agenda Item C.VI of its Fortieth Session, the Committee on Regional Trade 
Agreements (hereinafter CRTA or  the Committee) took up the first round of examination of the goods 
and services aspects of the Free Trade Agreement (FTA) between the Republic  of Korea and Chile 
(KCFTA).  The following topics were discussed: 
 A. General Remarks 
 
 Good Aspects
: 
 B. Background Information on the Agreement  C. Trade Provisions   Services Aspects
: 
 D. Background information on the Agreement 
 3. The Chairman
 said that the Agreement had been si gned on 15 February 2003 and had entered 
into force on 1 April 2004;  it had been notified to the WTO on 19 April 2004, as document with double symbol WT/REG169/N/1 – S/C/N/302.  The text of the Agreement could be f ound in document 
WT/REG169/1 and Corrigendum 1. 
4. The Chairman
 indicated that the Parties were the fi rst to avail themselves of a Factual 
Presentation (hereinafter also referred to as Secretariat Presentation) prepared by the Secretariat for the goods aspects of the Agreement, which had been pr epared in accordance with the Guidelines on 
Procedures to Improve and Facilitate the Examin ation Process (WT/REG/W/15/Add.1). The Chairman 
proposed to organize the examination by first ask ing the Parties and other Members for general 
comments, and then to turn to the specifics of  the Agreement looking first at the goods aspects 
followed by the services aspects, using the r espective Secretariat's Factual Presentation 
(WT/REG169/3) and Standard Format (WT/REG169/4) to guide the debate. The examination would therefore depart from the norm in that the Factual Presentation would replace the Standard Format as the basis for the examination of the goods  aspects of the Agreement which he hoped would allow for a more 
thorough examination, and a better understanding of  not only this Agreement, but others to be 
considered by the Committee in the future.  He thanked the Parties fo r having been the first to use the 
new procedure and hoped that other Members would follow their example.  He also thanked the 
Secretariat for the excellent work done in preparing the Factual Presentation.  WT/REG169/M/1 
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 5. A representative of the Secretariat
 said that the Factual Presentation by the Secretariat had 
been prepared in accordance with the wishes of  the Negotiating Group on Rules (NGR) on RTAs to 
serve transparency, a vital element for a better understanding of the impact of RTAs on the 
multilateral trading system.  He stressed, however, that  this had come at the cost of placing a heavier 
workload on the Secretariat and hoped that Members would find the document useful in the conduct 
of the examination of the Agreement.   
A. GENERAL REMARKS  
6. The representative of Korea  commended the Secretariat for the excellent work in preparing 
the Factual Presentation on the goods aspects of the Agreement.  She indicated that the KCFTA, 
which was Korea's first FTA, had been concluded w ith the aim of liberalizing and promoting trade in 
goods, services and investment between the two countri es;  facilitating economic growth and mutual 
benefit;  improving the already excellent bilateral relations;  and contributing to the expansion and 
development of world trade under the WTO.  The Agreement was comprehensive in scope, 
substantially liberalizing trade between the Parti es, and establishing a more secure and predictable 
framework for the conduct of business in the FTA.  The effects of the Agreement, observed over a 
period of a year, had been very positive.  Since th e Agreement came into force in April 2004, both 
countries had witnessed rapid expansion of economi c activity which had served the interests of 
workers and consumers in both countries.  Specifically , in the year to March 2005, bilateral trade had 
increased by 48.2 per cent;  Chile's exports to Korea had grown by 44.4 per cent to a record high of 
1.9 billion dollars while Korea's exports to Chile had risen by 57.8 per cent to 0.8 billion dollars 
during that same period.  She said that such a succe ssful outcome was due to the fact that the KCFTA 
had been built upon the complementarities of the Parties' trade economies, thus enabling the 
businesses and industries of the two countries to take  advantage of the Agreement to its fullest 
potential.  The high standards of the KCFTA were indicative of the Parties' commitment to economic 
liberalization and openness.  She stressed that th e Agreement was a high-level FTA, consistent with 
WTO rules.  Both countries had agreed to eliminat e tariffs on more than 95 per cent of goods in terms 
of tariff lines within ten years.  In Korea's case that figure was 96.1 per cent while for Chile it was 
95.1 per cent.  In terms of actual input, Korea a nd Chile had agreed on tariff liberalization on more 
than 96 per cent of goods over the trade liberalizati on period.  With respect to rules of origin, the 
Agreement set clear and predictable criteria for determining the eligibility of goods receiving 
preferential treatment.  These were based on the prin ciple of substantial transformation and included 
comprehensive product specific rules of origin for all goods.  She indicated that both Parties had 
undertaken not to adopt or maintain import and expo rt restrictions, except in  accordance with Article 
XI of the GATT or as otherwise provided in the Agre ement.  To further facilitate trade, the KCFTA 
also provided for customs procedures and customs cooperation and for predictable dispute settlement 
arrangements, with which both Parties could effect ively resolve disputes regarding the interpretation 
of the Agreement and the implementation of the obligations rising under the Agreement.  The 
Agreement covered a wide range of  areas such as trade in servic es, investment, competition policy, 
government procurement, and intellectual property rights.  The Agreement had substantial services 
sectoral coverage and provided for the absence or elim ination of substantially all discrimination.  She 
indicated that this was a negative list Agreement wh ich meant that all sectors were liberalized unless a 
Party made a specific reservation or took a non- conforming measure.  The Agreement covered the 
four modes of services delivery established in the GATS.  Therefore the Agreement included 
coverage of substantially all the trade in the goo ds and substantial sector coverage in services in 
conformity with GATT Article XXIV and GATS Article  V.  To date, the Agreement had played a 
substantial role in contributing to growth in bila teral trade in goods, services and investment and had 
laid a stable foundation for the Par ties to explore, raise and enhance mutual interests and benefits to 
close cooperation.  She was of the opinion that the Agreement was fully consistent with the Parties' 
WTO obligations and complementary to the multila teral trading system.  She looked forward to 
listening to other Members’ views and responding to their questions.  WT/REG169/M/1 
 Page 3 
 
 
 7. The representative of Chile  thanked the Secretariat for its efforts in preparing the Factual 
Presentation which he regarded as a substantial improvement on existing procedures in terms of 
quantity and quality of the information provided.  He  hoped that this exercise would continue in the 
future and that other Members would volunteer for su ch a process.  In that r espect, he remarked that 
although it had entailed a lot of work for the Secretariat, it had not resulted in much work for the 
Parties.  He remarked that the KCFTA was Chile's  first trans-pacific Agreement as well as its first 
with an Asian country.  Throug h the Agreement, Chile had gained access to 47 million consumers in 
Korea, while Korea had gained acc ess to 1.2 billion potential consumers if all of Chile's FTAs were 
taken into account.  Hence, he considered the Agre ement as a positive development for both Parties.  
Commenting on the type of products which had experienced an increase in bilateral trade, he noted 
that in the case of Chile's exports to Korea the gr eatest increases were pork, followed by sea products 
(fisheries), fruit and wine.  Chile had increased imports from Korea in high-tech products such as 
mobile phones, cars, and sophisticated machinery.   He emphasized that the objective of the 
Agreement was not limited to increasing bilateral trad e in goods but also to enhance trade in services 
and investment as well as laying down the rules a nd disciplines governing their commercial relations.  
He indicated that Chile's experiences in FTAs to date  had been a deepening of the relationship with its 
partners on all fronts.  That was exactly what ha d happened with Korea from the very first year of 
operation of the Agreement.  Cooperation had in creased at government level, non-governmental 
agencies, strategic and trade alliances were being forged between the Parties' businesses, and there 
had even been an increase in th e exchanges between the Parties'  respective academic centres and 
universities.  In short, the Agreement was an a lliance that went well be yond a mere commercial 
relationship and he thanked Korea for having accep ted to be a partner in such an alliance. 
8. The representative of Chinese Taipei  congratulated the Parties for their success in reaching a 
very wide Agreement.  He also conveyed his dele gation's appreciation of the efforts made by the 
Secretariat for making the Factual Presentation ava ilable.  His delegation we lcomed the fresh ideas 
included in the Presentation, the ex tent of the information containe d therein, and its function in 
deepening Members' understanding of the Agreement.   At the same time his delegation was a bit 
worried about the comments made earlier concerning the burden that such a process had placed on the 
Secretariat.  He noted that the Presentation included two parts, one consisting of a summary of the provisions of the Agreement and the other consisting of  a brief factual analysis of the trade data, and 
he wondered whether it was the latter part which had placed most of the burden on the Secretariat.  In 
that respect he noted that the Secretariat had relie d in several circumstances on information from the 
United Nations COMTRADE databa se and he wondered what kind of additional information the 
Secretariat had had to search for in the process of  preparing the Factual Presentation and whether it 
had had to ask the Parties to produce information which was not available elsewhere.  He wondered 
whether the Secretariat could provide Members with its experience on these points as well as an indication of the number of days or hours put into the preparation of the Presentation. 
9. The representative of Australia
 congratulated the Parties not only for having concluded a very 
good Agreement, but also for volunteering for the new Factual Presentation process.  She also 
commended the Secretariat for preparing a very u seful Factual Presentation of the Agreement which 
answered several questions that her delegation would have normally had.  She re ferred in particular to 
those elements of the document which had proven very useful such as the Annex setting out the 
indicators of trade liberalization;  the charts and tabl es with the coverage of the FTA by tariff line and 
share of bilateral trade which provided a summary of trade liberalization on entry into force and 
throughout the phase-in period;  and especially th e tables listing the products subject to the schedule 
of elimination and those showing the co mparison of preferential and MFN rates. 
10. The representative of the United States  commended the Secretariat for its Factual Presentation 
which she regarded as a cogent, thorough and ba lanced description of the Agreement.  She 
appreciated the information in the Annexes, in particularly the table listing the Parties' top 25 export 
products and how they were treated.  She added th at the Factual Presentation had significantly helped WT/REG169/M/1 
Page 4  
 
 her delegation in reviewing the KCFTA.  In that re gard she remarked that her delegation's review of 
the KCFTA, in particularly the Annexes, had been  initially based on a third party source, because 
neither of the websites listed in the notification we re valid and it had taken her delegation a while to 
actually find the Agreement and its Annexes.  She acknowledged that the URL addresses to those 
websites had been published in the Secretariat's F actual Presentation but that had only been available 
since early July.  In the interest of transparency and in light of the discussions on that topic in the 
NGR, she encouraged Members to make sure th at the URL addresses to the websites of their 
agreements were valid. 
11. The representative of the European Communities
 congratulated the Parties for their 
Agreement and for having utilized the new procedures  for the presentation of agreements provided by 
the Secretariat.  He welcomed Korea into what  he referred to as a "very questionable club of 
RTA users" and appreciated the fact that it had notified the Agreement under GATT Article XXIV 
given that the Parties, depending on how they wanted  to define themselves, could have also used the 
legal cover provided by the Enabling Clause.  He congratulated the Secretariat for its Factual 
Presentation which he regarded as serious, balanced and factual, and fully concurred with previous 
delegations about its usefulness in enhancing transpar ency which, by itself, was a contribution to the 
work that the WTO could do on RTAs.  He noted that the Factual Presentation might benefit from some work on its digestibility and he compared its first reading to EC Treaties where footnotes and 
annexes had to be read more carefully than the bul k text.  With respect to the question of resources 
needed to provide a factual presentation, he suggested  that the Secretariat report to the NGR about its 
experiences in drafting the Factual Presentation in order to have a discussion on lessons learned, 
taking into account that this exercise was a learni ng curve.  That would allow Members to make an 
informed choice of the resource implications for th e Secretariat and should these prove to be very 
resource intensive, due considerati on would have to be given to ways to make the procedure more 
efficient. 
12. The representative of Canada
 praised the Parties to the KCFTA for entrusting the Secretariat 
with the Factual Presentation of the Agreement.  He remarked that the Factual Presentation was of 
double interest to Canada since it had an FTA with  Chile and was engaged in  FTA negotiations with 
Korea and the Factual Presentation had provided his de legation with a wealth of useful information.  
He added his concern about the question of resource implications;  in consideration of the fact that 
this exercise was a learning curve he hoped that this would evolve for the better. 
13. The representative of Hong Kong, China  congratulated the Parties for volunteering for the 
new procedures for the presentation of their Agreem ent and thanked the Secretariat for what she 
considered a very informative Factual Presen tation.  She supported the suggestion by the 
representative of the EC for a possible fine-tuning of the format of the Factual Presentation in future 
discussions in the NGR;  among possible changes she mentioned the inclusion of some of the information contained in the Annexes in the main body of the Factual Presentation.  With respect to 
the issue of resources she said that it might be neces sary to wait for a few more factual presentations 
before drawing the long-term resources implications for the Secretariat and Members. 
14. The representative of Japan
 congratulated the Parties for a very good FTA and the Secretariat 
for drafting the Factual Presentation.  On the latter, he said that he was impressed with the clear-cut 
explanation and with the well arra nged data, charts and tables.  The representative of Switzerland  
welcomed the Factual Presentation by the Secretaria t and congratulated the Parties for presenting their 
Agreement during that Session of the Committee.  Sp eaking on behalf of EFTA, he indicated that the 
EFTA-Korea FTA had been concluded a few days ear lier and that the agreement would be presented 
in 2006. 
 
  WT/REG169/M/1 
 Page 5 
 
 
 Goods Aspects  
 
15. The Chairman  recalled that the terms of reference for the examination of the goods aspects of 
the Agreement had been adopted on 5 July 2004 by the Council for Trade in G oods, and were  
contained in document WT/REG169/2. 
16. A representative of the Secretariat , having taken note of the many comments made on the 
question of resources, clarified that his previous in tervention had not been meant to raise alarm bells 
and that the issue was not as bad as it may have initia lly sounded.  He indicated that the question of 
resources had already been raised  in the NGR and would continue to be under its review.  He 
informed Members that there had been a slight in crease in the resources available to the RTA Section 
in the Trade Policy Review Division, and that some  reorganization was taking place so as to make the 
work process more efficient;  he emphasized that at that moment in time the Section could handle the workload.  He acknowledged that the process of fa ctual presentations was a learning curve and that 
the time that went into the preparation of subse quent factual presentations might decrease, though not 
by much.  He stressed that the question of resources might have to be addressed depending on the 
number of requests for factual presentations.   
17. Another representative of the Secretariat provide d Members with an overview of the process 
undertaken in drafting the Factual Presentation whic h had been prepared under the sole responsibility 
of the Secretariat and had been sent to the Partie s for their comments before circulation.  Three 
documents had guided its preparation;  the draft outline for the goods aspects (circulated to the NGR 
on 21 March 2003);  the data elements relating to  tariff and trade included in the NGR's paper on 
transparency (which was an evolving draft);  a nd the "mock" on the goods aspects of the Canada-
Chile FTA (prepared by the Secretariat and circul ated on 23 April 2004).  Due account had also been 
taken of the comments and suggestions made by de legations on the "mock".  With respect to the 
structure of the Factual Presentation, although it closely followed the draft outline, a few minor 
changes had been made.  For instance, the section on  the relationship of the Agreement vis-à-vis other 
RTAs had been integrated into the main text inst ead of the Annex as in the outline.  However, the 
main changes vis-à-vis  the mock prepared the previous year was the expansion of the section on trade 
environment and the inclusion of additional tables in the Annex.  In terms of trade environment, the 
Factual Presentation presented a short overview of th e Parties' merchandise trade balances, both on a 
global and bilateral basis whic h had been sourced from COMTRADE data, an internationally 
available statistical source, not by the Parties themselves.  Turning to Section II.B on National 
Treatment and Market Access Provisions of the Agreement, she pointed out that the Parties' 
liberalization schemes were laid out in detail on a tari ff-line basis.  She noted that such an approach 
was only possible if data were made available at the same tariff level as the concessions had been 
made - in the case of Chile it was the 8-digit HS le vel, while for Korea it was the HS 10-digit level.  
Moving on to Section II.2 on Rules of Origin, she indicated that the comments made by delegations 
on the "mock" had been taken into account and an a ttempt had been made in the Factual Presentation 
to focus on the descriptive elements  of the rules of origin and to  provide more details on customs 
procedures under Other Regulations.  Furthermore, te xt boxes had been added for rules of origin and 
dispute settlement in order to provide a snapshot  of the key applicable provisions.  The Annex 
provided a fuller treatment of trade liberalizati on indicators for the KCFTA than what had been 
provided in the Canada-Chile "mock".  She stressed that  that reflected the fact that data had been more 
readily available for the KCFTA.  In that regard, she noted that for the tariff liberalization charts they 
had used statistics on tariff lines which had been pr ovided by the Parties as well as the tables on tariff 
concessions included in the Factual Presentation.  Sh e stressed that the cooperation by the Parties and 
their timely provision of statistics, other needed information, as well as comments on the draft, had been invaluable and it had showed that good cooper ation greatly facilitated the drafting of such a 
Factual Presentation.  In terms of resources needed  to prepare the factual presentation, she gave an 
estimate of 20-25 working days.  She added that th e Secretariat was still in the phase of "learning by 
doing" and she expected that preparation of future  factual presentations would take less time.  Having WT/REG169/M/1 
Page 6  
 
 said that, the time required would also be dependent  on other factors such as the complexity of the 
agreement concerned, the availability of inform ation and the timing required to process that 
information. 
18. The representative of the United States
 suggested that a copy of the Factual Presentation with 
a foreword by the Secretariat on how it approach ed it, by including for instance the sources of 
information, be made available to the NGR since it would be useful to its work and to other Members 
that were absent that day.  The Chairman  supported this suggestion, especially since the Factual 
Presentation had been a suggestion of the NGR and it was important that it got some feedback not 
only on the drafting of the Factual Presentation but on its importance to the work of the CRTA and its contribution to the examination of RTAs.  The representative of Australia
 backed the suggestion. 
B. GOODS ASPECTS – BACKGROUND INFORMATION ON THE AGREEMENT  
19. The representative of the European Communities  asked the Parties to provide in writing the 
specific reasons, preferably on a product-by-pro duct basis, why the KCFTA included transition 
periods beyond ten years, more specifically 13 years in the case of Chile and 16 years in the case of Korea.  Adding to that point, the representative of Chinese Taipei
 noted that according to Chart A.2 of 
the Annex, at the tenth year of implementation of  the KCFTA, Chile would have liberalized less than 
80 per cent of its trade based on import shares from Korea while most of the remaining trade would be liberalized at the 13th year.  He asked Chile to expl ain the reasons for such an approach given that the 
general principle applicable to transition periods was ten years.  
20. The representative of Chile
 replied that the issue of transition periods had to be discussed in 
the NGR since Article XXIV of the GATT 1994 was not  clear enough in that regard;  he gave the 
example of some open questions such as whether the measurement of substantially all the trade for the 
purposes of transition periods was to be based on a pe rcentage of tariff lines or actual trade;  and 
whether actual trade was the trade at the beginning or the end of the RTA negotiations.  With respect 
to the KCFTA, and by considering both tariff li nes and actual trade, with actual trade being the 
average of the three years previous to the start of the negotiations of the Agre ement, the depth of trade 
liberalization was slightly less than 90 per cent.  In  that sense, it was his opinion that the requirements 
of Article XXIV of the GATT 1994 were fulfilled.  He  stressed that what was important was that the 
Agreement, even if it provided for longer phase-out periods, envisaged very few and minor exceptions 
to the process of trade liberalization.  In reply to the representative of Ch inese Taipei, he emphasised 
that the type and quantity of products benefiti ng from longer phase-out periods was the outcome of 
the negotiations and not pre-establishe d modalities.  In that respect he indicated that Chile's approach 
to RTAs’ trade liberalization was usually based on th ree phase-out periods;  the first one provided for 
zero tariffs from year one and usua lly covered 85 per cent of both tariff lines and actual trade;  the two 
other phase-out periods, which were respectively five and ten years, would cover the remaining 15 per 
cent of trade and tariff lines.  He stressed that these were linear phase-out periods, in other words 
percentage tariff reductions on a yearly basis, an asp ect, he pointed out, that was not reflected in the 
Factual Presentation by the Secretariat.  The representative of Korea  added that the Parties had agreed 
to eliminate tariffs on more than 95 per cent of ta riff lines and that the pr oducts benefiting from longer 
phase-out periods were few.  In general, within  ten years, 96.2 per cent of tariff lines would be 
liberalized in the case of Korea and in her opinion that fulfilled the requirement of Article XXIV of 
the GATT 1994. 
21. The representative of the United States  had a suggestion for the Secretariat on how to present 
data in a format that reflected the concerns raised  by the delegate of Chile.  She referred to the 
standard formats provided for the United Stat es-Chile and United States-Singapore FTAs which 
contained tables listing by liberalization phase, the va lue of trade flows and the number of tariff lines 
and their percentages which showed in positive prog ression how much was liberalized at each phase.  WT/REG169/M/1 
 Page 7 
 
 
 22. The representative of th e European Communities  said that his understanding from the answer 
provided by the representative of Chile was that  there was no definition of what constituted 
"exceptional circumstances" and that hence, the KCFTA reflected Chile’s an d Korea’s interpretation 
of the term.  He said that he would provide hi s question in writing since he considered that 
"exceptional circumstances" had to be determined  on a product-by-product basis. The representative 
of Chile  replied that at the end of the ten year tr ansition period the KCFTA would cover around 90 per 
cent of trade thereby fulfilling the requirements of  GATT Article XXIV.  In her opinion the question 
deserving discussion was therefore whether the parti es to an RTA had to stop the process of trade 
liberalization at the end of the ten year tran sition period or subject more products to trade 
liberalization through longer phase-out periods.  
23. The representative of the European Communities  considered the point raised by the 
representative of Chinese Taipei as valid because accordi ng to the information provided in Chart A.2, 
the schedule for tariff liberalization in terms of import shares, in 2014 duties would be eliminated on 77.3 per cent of goods.  While Chile might consider this  to be "substantially all the trade", particularly 
if a combined average was used si nce Chile's figures in terms of tariff lines were much higher, what 
mattered in terms of the consis tency requirement was eliminati on, not reduction. Although he 
acknowledged that Chile had only a 6 per cent tariff ra te to start with, he considered the Agreement 
back-loaded because upon entry into force Chile had lib eralized 50.3 per cent in terms of imports and 
44.7 per cent in terms of tariff lines.  The representative of Japan
 had similar questions, especially 
with regard to the tariff reduction schedule, reprod uced in Tables II.2 and II.4 and their relation with 
Charts A.1 and A.2 in the Annex.   
24. On the liberalization process, the representative of the United States  asked from what base 
rate the tariff reductions had begun for bot h Parties.  The representative of Chile  answered that the 
basic rate from which both Parties had started was th e applied MFN tariff, which was 6 per cent in the 
case of Chile.  On the issue of using tariff lines or trade volumes, he explained that it was Chile's practice to use tariff lines not only because of the GATT Article XXIV requirement but because Chile 
had in mind all potential trade and not just produc ts it already exported and imported.  Although 
acknowledging that others were of a different opini on, Chile believed tariff lin es were more important 
than actual trade. 
25. The representative of th e European Communities
 sought clarification on paragraph 22 of the 
Factual Presentation, which read: "Several agricultu ral products, particularly those in HS Chapters 8 
(edible fruit and nuts), 20 (preparations of ve getables and fruit), and 21 (miscellaneous edible 
preparations) are subject to multiple categories for ta riff liberalization".  He asked the Secretariat to 
confirm that the meaning of this was that each of the products was subject to a different category of 
tariff liberalization and that it was just within the categories that products were different.  A 
representative of Secretariat  confirmed this point. 
26. The representative of Canada  drew the attention of the Par ties to paragraph 23 of the main 
text and to the Annex, which stated that on the part  of Korea, 391 tariff lines were scheduled for tariff 
elimination after the conclusion of the current Doha Round.  He asked the parties to confirm that this 
meant that there was already a commitment for ta riff elimination on these 391 lines and that only the 
scheduling of that commitment needed to be negotia ted.  In addition, he wanted to know whether 
Korea applied TRQs on any of those lines and if  so, on which ones.  The representative of Japan  
supported the question.  The representative of Chile  explained that those products under the category 
of post-DDA were basically agricultural products wh ich were sensitive for Korea.  In Chile’s view, 
since these products were part of the negotiations in  the DDA, it was logical to wait till the end of the 
DDA process and then engage in negotiations on those products.  The representative of Canada  asked 
the Parties to provide answers in writing.  He ask ed for confirmation that a commitment existed to 
bring those 391 tariff lines to zero or whether some tariffs could be ultimately excluded from the 
commitment to eliminate tariffs.  He made referenc e to paragraph 23 of the Secretariat's Presentation, WT/REG169/M/1 
Page 8  
 
 which stated that: "Almost all 391 tariff lines on  which the KCFTA provides that Korea's tariff 
elimination schedule(s) will be decided upon afte r completion of the Doha Round are agricultural 
products (see Table II.6)."  The representative of Korea
 replied that the commitment was just to 
engage in negotiations after the outcome of the DDA.  Korea had not committed to the full 
liberalization of all these products , which would be decided during th e course of negotiations after the 
DDA.  The representative of Chile  disagreed with the representativ e of Korea on this point since it 
had been Chile’s understanding during the negotiati ons, and it was still now, that tariffs on those 
products would be eliminated. 
C. GOODS ASPECTS – TRADE PROVISIONS  
27. The representative of the United States  asked the Parties to describe what types of import 
measures were envisioned under Article  3.4.6 which allowed the Parti es to adopt or maintain import 
measures to allocate in-quota imports made pursuant to  a tariff rate quota (TRQ).   She added that she 
had further questions that she would submit in writing.  The representative of Chile  indicated that in 
the case of Chile no TRQs were foreseen under the terms of the Agreement.  He acknowledged that 
Korea maintained certain TRQs, but added that they  were not the general rule under the Agreement.  
The representative of Korea  added that the inclusion of TRQs on 24 products in Korea's liberalization 
scheme was the result of the negotiations as well as c onsideration of the impact that the tariff rate 
structure would have on the trade and industry of both Parties.  The representative of the United States  
pointed out that Korea had WTO TRQs for some products such as bovine meats, poultry meat, whey and mandarins, for which TRQ access was also provide d to Chile as part of the Agreement.  She 
asked if preferential access provided under TRQs in  the Agreement was in addition to Korea's WTO 
commitments.  Following up on the point raised by  the representative of Canada, the representative of 
the United States noted that some Korean products that were due to be discussed after the Doha 
Round were also subject to TRQs in the Agreement so  she asked the Parties to explain the relationship 
between the DDA Approach and the TRQs containe d in the Agreement.  Regarding TRQs, the 
representative of Korea
 explained that 24 products were subject  to tariff quotas, 18 of which were not 
only subject to tariff quotas but also to futu re discussions after the conclusion of the DDA 
negotiations.  Basically, for those 18 produc ts, TRQs and post-DDA category would be more 
accurate.   
28. The representative of Australia  expressed her concern about the use of the system of 
auctioning of preferential TRQs, as her delegation consid ered this an inefficient and additional cost on 
the system.  The representative of Korea  suggested that this question should be raised in the context of 
Korea's trade policy review rather than in the CRTA because the Parties had agreed to use TRQs for a 
limited number of products as a result of negotiations. 
29. The representative of Australia  asked the Parties whether they had conducted negotiations at 
different tariff levels, as she had noted that Chile's liberalization was calculated at the HS 8-digit level 
and Korea's at the 10-digit level.  The representative of Chile  explained that ne gotiations had taken 
place bearing in mind the reality of both sides, which meant that Chile had negotiated under the 8-
digit system and Korea under 10-digit, which was the reason why there was no exact mirror between 
the two lists.  He acknowledged that there would be  some differences and asymmetries in the process, 
which the Parties were prepared to accept.   
30. The representative of Australia  asked if the provision regarding the acceleration of the 
elimination of customs duties had been used and if so, if the Parties could provide more information 
on that.  The representative of Chile  replied that since the Agreemen t had been in place for just one 
year, the Parties had not yet had the opportunity  to accelerate the elimination of tariffs.   
31. The representative of the United States  requested confirmation that Korea did not provide 
access to Chile from 1 May to 31 October on all the products for which seasonal restrictions applied,  WT/REG169/M/1 
 Page 9 
 
 
 which were identified in Tables II.4 and II.5.  The representative of Chile  confirmed that Chile had 
duty-free entry in the period between 1 November and 30 April, which was precisely the period when 
Chile produced and exported.  Therefore, from Chile ’s perspective, this was really free trade. 
32. The representative of Hong Kong, China  asked the Parties to provide the trade values of 
agricultural and non-agricultural products, 96 tariff lines for Chile and 21 tariff lines for Korea, that 
were excluded from duty elimination under the Agreement.  The representative of Chile  replied that 
he did not have the exact figure but believed it was not very high, less than 10 per cent by definition.  
The representative of Switzerland  asked the Parties if those excluded products were subject to the 
evolutionary clause and if their elimination would be discussed one day.  The representative of Chile  
replied in the affirmative and said that the reason for adding that specific wording in the Agreement 
was to make sure that that would be the case.   
33. The representative of Chinese Taipei  noted that the Secretariat's Presentation stated that only 
exceptions in accordance with GATT Article XI w ould be allowed.  However, he requested the 
Parties to confirm whether Article 3.9 of the Agre ement referred to other exceptions, for example, 
Chapter 20.  The representativ e of the European Communities  asked if that meant that exports would 
only be subject to a quantitative restriction, so th ere was a complete prohibition of all export taxes 
under the Agreement or did it mean that Article XI type exemptions applied to export taxes as well.  
The representative of Chile  replied that the Parties were not be allowed to maintain or adopt in the 
future any export restriction.  The only exception to the rule was GATT Article XI.  The representative of Korea
 clarified that the exact wording of Artic le 3.9 stated that "Except as otherwise 
provided in this Agreement neither Party may a dopt ... except in accordance with Article XI of 
GATT".  Therefore, the Parties could only take im port or export restrictions if they were in 
accordance with GATT Article XI or if it was provi ded in the Agreement.  With regard to the 
representative of the EC's question on export tax, he said that this was treated in Article 3.11 of the 
Agreement which made no referen ce to GATT Article XI, so neither Party could adopt export taxes. 
34. The representative of the United States  said she would provide detailed questions in writing, 
but had a general question in reference to Article 8.7.3 of the Agreement, which appeared to create 
rights and obligations beyond those established in th e WTO SPS Agreement.  She wanted to know if 
the Parties believed that the SPS Ag reement was insufficient and that they needed to create additional 
rights and obligations, and if so, why?  The representative of Chile  replied that the question of what it 
meant to go beyond the WTO had to be dealt with at some point.  In his view, the core of any trade 
agreement was to go beyond the WTO, since it made no sense to just copy the WTO.  For instance, in 
the area of tariffs, it was clear that they had to be e liminated.  In the area of investment, Parties had to 
go beyond the WTO because there were no investment  provisions in the WTO.  In services, again 
Parties had to go beyond Article V of the GATS.  Ho wever as regards disciplines such as SPS, it was 
complicated to identify what going beyond WTO meant.  In his view, it meant two things.  First, the Parties assumed that the SPS Agreement was at the core of Chapter 8, so they accepted, recognized 
and reasserted all the rules and disciplines of th e SPS Agreement.  However, the SPS Agreement 
might have some vacuums or unclear language that c ould be interpreted bilate rally by the Parties,  
keeping in mind the principles of the SPS Agreement that all rules should be based on technical or scientific rulings or decisions.  The second issue in this area wa s to create a permanent working 
system between the two Parties, for example th rough a Committee where the Parties could further 
develop SPS issues, for instance, to recognize disease -free areas.  That was how the Parties viewed 
this Article and Chapter in general, which always had to be consistent with  the SPS Agreement.  The 
same applied to TBT.  The repres entative of the European Communities
 agreed and considered that 
the explanation given was very good.  If the repr esentative of the United States did not provide a 
written question he would do so, as he wanted to have  an answer in writing.  He suggested that the 
representative of the United States contemplate putting it in writing for submission to the NGR. WT/REG169/M/1 
Page 10  
 
 35. The representative of Australia
 requested clarifications on the agricultural safeguard.  First, 
she asked how the provisions in the bilatera l agricultural safeguard differed from the WTO 
Agreement on Safeguards, and second, whether the ag ricultural safeguard mechanism had been used, 
and if so, on what products.  The representative of Korea  replied that page 15, paragraph 45 of the 
Factual Presentation stated that the agricultural safeguard mechanism provided only for increases in 
tariff rates;  other types of measures had simpler no tification requirements.  In addition, the Parties 
had to refer the matter to the Commission, which sh ould allow for possible consultations with a view 
to seeking a mutually acceptable solution.  Also, th e measure could be taken in circumstances when a 
product originating in a Party was being imported into  the other Party in such increased quantities and 
under such conditions so as to cause or threaten to ca use serious injury or disturbance in the markets 
of like or directly competitive products.  With re gard to the second question, the mechanism had not 
yet been used.   
36. The representative of Chinese Taipei  wondered whether the concept of "disturbance" in 
paragraph 45 was an invention by the Parties or if it was part of a WTO Agreement because in the view of his delegation, there seemed to be a big gap between "serious injury" and "disturbance" and 
the latter seemed to allow for flex ibility in the use of these safeguard measures.  The representative of 
Chile
 replied that this apply to a bilateral saf eguard measure among the Parties (not a global 
measures), where the tariff could be raised to MFN level, but could not exceed  it or the bound tariff, 
which was even higher in the case of Chile. 
37. The representative of the European Communities  asked about the maximum time for using 
the safeguard measure once emergency actions were a pplied.  If the injury continued for ever, could 
the Parties keep the measures for ever?  The representative of Chile  replied that this Agreement was 
not like the EC-Chile Agreement, so the measures were applicable during the phase-out period.  The 
representative of the European Communities  clarified that his question was whether the Parties could 
maintain a measure of, for instance 16 years in the c ase of Korea, or if there was any kind of review 
mechanism after a certain period?  The representative of Chile  confirmed that there was a deadline but 
he did not remember the exact limit.  The representative of Korea  indicated that the Agreement 
specified no limit for the use of th e agricultural safeguard.  However, in order to invoke the safeguard 
mechanism, Parties had to prove the casual link be tween tariff elimination and the injury.  Naturally, 
it would not last forever but no limit was specified in the text.  The Chairman  asked for confirmation 
from both Parties on whether there was a time limit or not.  The representative of Chile  explained that 
his country had internal limits in accordance w ith domestic rules.  The representative of Korea  stated 
that since the Agreement did not provide a limit, Korea had not provided for it domestically.  The 
representative of Chile  clarified that the safeguard would only be used when the outstanding 
circumstances prevailed.  In her view, it was a re stricted safeguard mechanism because it could never 
go beyond the MFN level and it provided for compensa tion to the other Party.  Another representative 
of Chile pointed out that if bilateral mechanisms  such as this foresaw compensation, it made them 
almost impossible to apply.  Finally, th e representative of the European Communities  asked whether 
the limit was the applied MFN tariff, which the representative of Chile  confirmed. 
38. The representative of th e European Communities  requested the Parties, especially Chile, to 
provide a comparison of customs related procedures under this Agreement with those in the US-Chile 
Agreement, which he knew was quite ambitious in its trade facilitation, judging from the Standard 
Format.  Referring to paragraph 59 on government procurement, he enquired about the lowering of 
the threshold value.  He presumed that that was re flected in Korea's law for government procurement, 
and if so, that it would be de facto  multilateralized, irrespective of Korea's commitments under the 
WTO Agreement on Government Procurement (GPA).  The representative of Chile  replied that the 
bilateral thresholds were lower than Korea's GPA thresholds, because Chile was not a member of the 
GPA.  The aim was to create trade between the Part ies and to provide preferential access.  Further, he 
emphasized that Chile's system was open and transp arent, everything was on the internet and there 
was no discrimination, which was forbidden under Ch ile's Constitution.  The representative of Korea   WT/REG169/M/1 
 Page 11 
 
 
 concurred.  Korea had lowered the threshold ba rrier to Chile because it needed to increase the 
government procurement opportunities between the two countries.  The representative of the 
European Communities  clarified that his question was not why, but rather whether this was enshrined 
in national law and hence applicable to any thir d party even though it was only a binding commitment 
in a bilateral agreement.  He understood that this  was enshrined in the Agreement and he gave the 
example of services, where many Members' economies were more open than their GATS 
commitments, including their FTAs.  The representative of Korea  said that her preliminary answer 
was that it was only applicable to Chile in the KC FTA context but she indicated that she would be 
happy to provide the answer in writing if the question was submitted. 
39. The representative of the United States  asked if the provisions laid down in Article 3.10 of the 
Agreement, which created the parameters for the establishment of customs user fees, applied to 
custom user fees relevant to non-parties as well, i.e.  would the Parties enjoy different custom user fees than would be applied to non-parties.  On th e same issue, the repres entative of the European 
Communities  requested confirmation from Chile that it di d not apply custom fees under its FTAs.  He 
also asked when the Agreement would be implemented.  The representative of Chile  explained that 
the only legitimate fee that applied to imports was the tariff.  Additional charges would be the price 
paid for the services received.  The representative of Korea  said that as far as Korea was concerned, it 
might have custom user fees for processes which were  conducted after or before working hours, for 
the very reason that they were not conducted dur ing working hours, and these services were provided 
in the same way to other non-FTA partners.  The representative of th e European Communities  asked 
Chile if it applied any fees at all to RTA partners.  He recalled that Chile did not charge any fee under 
RTAs irrespective of working hours.  Thus, these fe es were basically zero and he presumed that Chile 
applied them to non-RTA partners but not to  RTA partners.  The representative of Chile  replied that it 
did not discriminate, that was the key point.  There were some services that were charged but at market-value.  Another representative of Chile expl ained that manipulation of cargo or any services 
provided in any import process would incur costs, and of course, those costs would be charged for.  
But the charge would just be for what those services actually cost, not more and on a 
non-discriminatory basis.  The representative of the European Communities
 considered that the key 
was that these costs were not discriminatory.   
40. Referring to Article 14.8 of the Agreement, the representative of Switzerland  drew attention 
to the competition policy aspects of the KCFTA, which affirmed the right of a Party to designate or 
maintain public or private monopolies according to th eir respective laws.  He was intrigued about the 
kind of monopolies it referred to: did it apply to monopolies in the agricultural field? The 
representative of Chile  asked for the question to be subm itted in writing, because there was a 
difference between a state-owned enterprise and a mo nopoly, so the technical and juridical definition 
of monopoly came into play. 
41. Referring to Article 21.6 of the Agreement,  which permitted a party to terminate the 
Agreement with six months written notice,  the representative of the United States  asked what would 
happen to the tariff reductions foreseen if the Agreem ent was cancelled:  would they remain at the 
level of the last year the Agreement was in effect or would they return to the prevailing MFN rate or 
something else?  Would the same apply to tariff rate quotas?  The representative of Chile  replied that 
the Parties had not discussed this but that his interp retation was that the MFN rate would apply, but in 
his view the Agreement would not be terminated. 
42. Referring to Table II.10 in Section E, Partic ipation in RTAs, the representative of the 
European Communities  recalled that in the previous day's NGR meeting, while discussing a proposal 
by China on retroactivity, the Chilean representative had indicated that Chile was party to 16 RTAs 
while Table II.10 listed eight plus tw o.  He asked for details of the ot her RTAs that Chile participated 
in.  The representative of Chile  explained that Chile had other ag reements under the Latin American 
Integration Association (LAIA), which was an association in Latin Am erica created under the WT/REG169/M/1 
Page 12  
 
 Enabling Clause system.  All agreements under LAIA were under the umbrella of the Enabling Clause 
and were notified not to the WTO but to LAIA.  Some, like the Mexico-Chile Agreement, had been 
improved by introducing more disciplines, like services and other issues, in such a way as to fulfil the 
standards of GATT Article XXIV, under which they were then notified.  However, most of the 
agreements that were under the LA IA umbrella were the old genera tion preferential trade agreements 
and focused more on market access in goods.  Th e representative of the European Communities
 
thanked the representative of Chile for the explanation.  As he viewed it, the preferential trade agreements to which Chile was a party were not pa rt of the original LAIA notification under the 
Enabling Clause but rather subsequent additions to it. Since these agreements modified relationships 
with other countries, he presumed that there w as a requirement to notify them under the Enabling 
Clause.  The representative of Chile
 replied that LAIA notified not only Chile's agreements, but also 
the agreements of other LAIA countries, once a year to the CTD.  She stressed the fact that Chile no 
longer negotiated this kind of agreement, but signed wider agreements, based on a negative list 
approach, including services and more disciplines.  However, the agreements under LAIA were in 
force and any change in them was notified to LAIA, which in turn notified them  annually to the CTD.  
Another representative of Chile highlighted that th ese kind of agreements had been negotiated in the 
early 1990s and they represented Chile's first genera tion of agreements, which were basic, limited to 
goods only, and in some cases did not provide for tariff elimination.  Nowadays Chile's policy had changed and it concluded more comprehensive FTAs. 
43. The representative of Chinese Taipei
 wondered why the Secretariat had used COMTRADE 
import data at the HS 6-digit level, when the Par ties had confirmed that their negotiations had been 
based on Chile's 8-digit and Korea's 10-digit code s and how the Secretariat had prepared these 
comparative diagrams of the liberalizati on.  The representative of the Secretariat  clarified that the 
6-digit level had been used because it was the normal level at which one could find trade statistics.  
However, she pointed out that items at the 6-digit level had been counted only when they were fully 
liberalized, which might have distorted a little bit th e statistics and the charts.  This had been found as 
the best way to do this exercise as opposed to count ing lines that were only partially liberalized.  She 
pointed out that the explanation on when tariff lines became fully liberalized was included in the main 
text of the Factual Presentation.  Also Tables A.3 and A.4 which dealt with the 25 top exports 
indicated when tariff lines became fully libera lized.  She acknowledged that it was always 
complicated to put statistics back into the 6-digit level.  At least, these statistics were available and 
COMTRADE was a fairly good source.  Nevertheless, she suggested that the Secretariat could reflect 
a bit further on this.   
44. With reference to Tables A.3 and A.4 which treated the 25 top exports, the representative of 
the United States  wished to know whether they referred to th e 25 top products that were liberalized or 
the top 25 products exported globally.  The representative of the Secretariat  confirmed that it had used 
the top 25 exports of each Party. 
45. The Chairman  expressed his satisfaction at having carried out this Factual Presentation for the 
first time at the CRTA.  In his opinion it had proved satisfactory and he considered the work 
undertaken by the Secretariat as valuable a means to enrich the discussion.  He congratulated the 
Secretariat for their work and the Parties to th e Agreement who had replied to many questions.  
Together with the other delegati ons, they had contributed to enriching the discussion for everyone.   
46. The representative of Chile  made a brief compilation of some of the doubts that had emerged 
from the preparation of the Factual Presentation, su ch as what data was used, how some information 
was calculated, what the Secretar iat had asked from the Parties, what methodologies had been used.  
In terms of resources, she pointed out that since the Secretariat had invested some resources, the 
Parties had not, so there had been a lot of cost-savi ng from their side.  She also voiced the benefits the 
Factual Presentation generated in terms of transpar ency compared with the standard formats provided 
to the Committee.  She announced that she would ask in the next meeting of the NGR to have a  WT/REG169/M/1 
 Page 13 
 
 
 presentation by the Secretariat so that the issue of the Factual Presentation could be discussed in the 
other fora.  She clarified that she wanted to high light this issue so Members could think a little more 
on how to bring this experience to th e NGR, which was what was needed.   
47. The representative of the European Communities  concurred.  As the representative of 
Hong Kong, China had noted at the beginning, there was some streamlining to do with the Factual 
Presentation to increase its digestibility.  There we re also some methodological questions that would 
immediately follow like, for instance, the point just  raised by the representative of Chinese Taipei on 
trade statistics.  This was important because it ha d a direct implication on the methodology envisioned 
for "substantially all trade" calculations.  Again, he took the opportunity to express his opinion that 
the Factual Presentation had proved very useful and comprehensive in terms of information.  
Normally Chile produced very comp rehensive reports but this represen ted one step in addition.  His 
delegation would appreciate if the Secretariat coul d provide some information to the NGR.  In his 
opinion the issue of workload was a relevant one because if the Secretariat could devote just one 
person a year, that person could only prepare fact ual presentations for 10 or 11 agreements, which 
was not much, and that raised some questions in hi s mind.  However, since the Chairman of the NGR 
was about to start informal discussions, he believe d that these issues could be integrated into the 
formal discussions, including the systemic issues, because there was a direct link between some of 
them and what had just been discussed in terms of methodology.   
48. The representative of the United States  agreed to a large extent with what the EC 
representative and previous speakers had just said.  In her opinion, the presentation had been very 
helpful, in particular the presentation of the data.  She considered that the number of questions raised 
should not reflect badly on the Factual Presentation because delegations always had specific questions 
on issues that were relevant to their own particular interests.  As more and more factual presentations 
were prepared, it would allow delegations a quicker  view, because it would be standardized.  Thus it 
would be possible to see a continuity or a lack of continuity among agreements.  She would find it 
helpful to have this discussed at the NGR and she encouraged delegations to take notes on this.  
Finally, she commended the Secretariat for its work.   
49. The representative of the Chinese Taipei  highlighted two points.  The first resulted from his 
experience of providing comments, since consid ering all the agreements under review, it was 
impossible for his colleagues in capital to read th rough the Factual Presentation.  At least he could 
benefit from the work of the Secretariat in that he could communicate with his colleagues in capital 
and learn from the experience of other agreements .  His second point was that his delegation found 
that there was a real need for th e Secretariat to communicate with the NGR.  He would appreciate if 
the Secretariat could suggest how to streamline th e process in order not to frighten other Members, 
not as experienced as Chile and Korea, away from th is process.  Even though a streamlined Factual 
Presentation might result in some loss of informati on, this loss would be compensated by maintaining 
a systemic analysis of agreements in a way that would benefit all Members. 
50. The representative of Australia  said that the day's meeting had been one of the best CRTA 
meetings she had attended in three years.  The reason for this change wa s that delegations now 
understood what was in the Agreement, which pr ovided a balanced and informed discussion.  
Therefore, although overall there would be extra wo rk involved in streamlining the process, it would 
be worthwhile to continue it. 
51. The representative of Canada  agreed with delegations that considered this a beneficial 
process, but shared the concern that the process shoul d be streamlined.  However, in response to the 
representative of Chinese Taipei's comment that it coul d frighten the parties, he wanted to make two 
observations.  First, he was heartened by the comme nts from the Parties themselves that they did not 
think that the preparation for this exercise had put a burden on them, which was the opposite of what 
he had anticipated.  The second point was that it was true that the examination itself had taken time, WT/REG169/M/1 
Page 14  
 
 more than the norm, but he thought this was due to the openness of the Parties to provide as many 
answers as possible to questions in oral form, and he  thanked them for their effort.   
52. The representative of Hong Kong, China
 also thanked the Parties and the Secretariat and said 
that the discussions had been very interactive.  His delegation looked forward to further discussions, 
possibly in the NGR, to see how the process could be fine-tuned to make it even more informative.   
53. The representative of Japan  fully shared the view that this process had been efficient and that 
Members had learnt a lot from it.  In terms of tr ansparency, this process had worked very well.  He 
considered it important that the process did not frighten other Members – and result in a negative 
impact – because of the strict examination.  In addition, he was of the view that this Factual 
Presentation was a consequence of the contributio n and cooperation from the Parties.  He also 
understood that part of this Factual Presentation made use of publicly available information from 
COMTRADE.  Perhaps the Secretariat could make a pa rtial presentation, which would lead to a less 
strict questions and answers process.  Thus, he  looked forward to seeing the Secretariat undertake 
presentations that did not represent such a heavy burden of work.  
54. Before ending the exercise, the Chairman  asked the Parties for their views.  In his opinion, the 
Trade Policy Review – even though it was a differe nt examination - had enormous value both for  
Members and for the Members being reviewed.  Wh en his country had been reviewed, he had found 
extremely valuable the work done  by the Secretariat and by them selves.  The representative of Chile  
replied that the exercise had been interesting because although Chile had a fairly high number of 
agreements, whenever these agreem ents were examined, it obliged Chile to think again because 
Members read what was written in these agreements, and this was always a useful experience.  The 
larger issue was not the KCFTA but the topic of FTAs themselves, which th e WTO needed to deal 
with.  RTAs were responsible for a number of dist ortions but, in his view, Members engaged in them 
because the WTO did not respond to their needs.  And if this was the case for Chile then it must be the 
case for the vast majority of Members so it was some thing that needed to be dealt with and developed 
because otherwise the future of the WTO could be called into question. 
55. The Chairman , without attempting to summarize everything that had been said, concluded 
that the experiment had worked well on this fi rst occasion, although he took note of the comments 
made by the delegations on the importance of fine-t uning the documents prepared by the Secretariat.  
Members had mentioned the importance of taking up th e issue in to the NGR so it could continue to 
work on the relationship between RTAs and the multilateral trade liberalization.  He asked the 
Committee if it agreed that he transmit to the NGR th e results of this first experiment that had been 
undertaken.  He invited the delegations that wished  to submit questions to do so in writing before 
23 September and for the Parties to provide answers by 31 October. 
56. The Committee took note  of the comments made. 
Services Aspects 
57. The Chairman  recalled that the decision to refer th is Agreement for examination to the CRTA 
had been taken on 25 March 2004 by the Council fo r Trade in Services, as contained in document 
S/C/M/73.  Pursuant to paragraph 7(a) of Article V of the GATS, the CRTA should examine the services aspects of the Free Trade Agreement between the Republic of Korea and Chile and report to the Council for Trade in Services on its consistency. 
D. 
SERVICES ASPECTS – BACKGROUND INFORMATION ON THE AGREEMENT  
58. The representative of Chile  explained that the Agreement c ontained two important sections:  
one on investment, independently of the sector r eceiving the investment;  and the other on services.   WT/REG169/M/1 
 Page 15 
 
 
 These were independent Chapters but shared a number  of Annexes:  Annex I referred to measures in 
force that were incompatible or discriminatory for services and investment;  Annex II referred to 
future incompatible measures for services and investment and;  Annex III, which did not represent a 
commitment, but had been included for transparen cy purposes, referred to quantitative restrictions.  
Although the WTO did not deal with investment, he e xplained that the Chapter, in particular with 
regard to Mode 3, contained pre and post-establishm ent conditions relating to Korean investment in 
Chile;  it guaranteed openness through national tr eatment and MFN;  it laid down procedures and 
regulated expropriations and the need to obtain fair  compensation in such cases and;  it regulated, with 
a few minor exceptions, the free transfer of capital for services and investment.  He then moved on to 
services which, he said, were governed by the prin ciple of national treatment and did not require the 
local presence of the other Party.  The Parties ha d agreed upon the transparency of information with 
regard to non-discriminatory quantitative restric tions and to the objective criteria for obtaining 
licences and certificates.  Given that professional services were one of the main activities of the 
services sector, the Agreement contained disciplines oriented at facilitating and promoting the provision of this type of service.  With the obj ective of eliminating unnecessary obstacles to trade in 
professional services, the Agreement included some  provisions for granting professional licences and 
certificates.  With a view to ensuring the quality  of services, licences and certificates should be 
granted in an objective and transparent manner, should not be more onerous than necessary and 
should not constitute a restriction for the provision of any service.  The Chapter on cross-border trade 
in services was not applicable to trade in some services, like financial services and air transport, 
which had been excluded.  He said that Chile and Ko rea had agreed to evaluate the appropriateness of 
including financial services four years after the entr y into force of the Agreement, as was reflected in 
the Chapter on final provisions.  Moreover, the Ch apter on cross-border trade included a section on 
temporary entry, which would guarantee the entry into the territory of the other Party of investors or services providers who were divided into three categor ies:  traders and investors;  business visitors;  
and intra-corporate staff transfers.  Finally,  there was a Chapter on telecommunications which 
regulated access to, and use of, telecommunication tran sport networks.  This Chapter included articles 
that dealt with the conditions for the provision of improved or value-added services;  transparency in 
the application of relevant regulations;  techni cal cooperation and other c onsultations and;  the 
standardization of terminal or used  equipment in public networks.   
59. Noting that both Parties had scheduled fina ncial services commitments under the GATS, the 
representative of the United States
 was curious to know why financial services were excluded from 
this Agreement, because given their exclusion a nd the reservations taken by both Parties, she 
wondered whether the Agreement met the conditions set  forth in the GATS Article V:1(a).  Thus, she 
asked the Parties to comment on th e large number of reservations, despite the negative list nature of 
the Agreement.  The representative of Chile  replied that financial services had not been excluded, 
only postponed for four years.  Second, he consider ed that the Parties' reservations were limited in 
comparison to other agreements with other trading partners.  In this case, there were only 39 or 40 
reservations and because both Parties were unitari an states, the commitments of the Agreement 
applied to the integrity of the territory, from the central Government down to the municipal level, 
which represented a huge difference with other countries that were or ganized as federal systems.  
Therefore, he did not share the assertion that there were a large number of exceptions or reservations. 
60. As regards accession, the representative of Chile  said that the Agreement had been concluded 
two years previously, which was why there was no accession clause.  Recently APEC members had 
agreed upon some "Best Practices" for FTAs, whic h had as an objective the convergence of FTAs.  
One of the best practices identified was that ev ery FTA concluded in the framework of APEC or 
between APEC members had to contain an accessi on clause.  Therefore, had this been a new 
Agreement, the Parties would have had an acce ssion clause as had been included in another 
agreement which had been signed between Chile, New Zealand, Singapore and Brunei Darussalam.  
He considered that this was a good practice whic h should be spread.  The representative of Chinese 
Taipei  encouraged the Parties to seriously consider this provision due to the growing number of WT/REG169/M/1 
Page 16  
 
 bilateral agreements.  His delegation was of the vi ew that if the Doha Round did not go far enough, 
Members should agree upon an accession clause that rea lly worked so those who were ambitious in 
trade liberalization could use that mech anism to facilitate global trade.   
61. The Chairman
 said that the Committee had concluded the first round of examination of the 
services aspects of the Free Trade Agreement between Chile and Korea.  He invited the delegations 
that wished to submit questions to do so in writi ng before 23 September and the Parties to provide 
answers by 31 October.   
62. The Committee took note  of the comments made.  
__________