KOREA – MEASURES AFFECTING GOVERNMENT PROCUREMENT
Document: Request for Consultations by the United States
Date: 22 February 1999
Document codes: WT/DS163/1
Complainant: U.S.
Respondent: South Korea
Third parties: EU, Japan
Dispute stage: Panel
Agreements cited: Annex I, Art. III, VIII, XI, XVI, XX, XXII:2  Government Procurement (GPA)

GPA/D4/1

KOREA – MEASURES AFFECTING GOVERNMENT PROCUREMENT
Request for Consultations by the United States
The following communication, dated 16 February 1999, from the Permanent Mission of the
United States to the Permanent Mission of the Republic of Korea and to the Chairman of the Dispute
Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
My authorities have instructed me to request consultations with Korea pursuant to Article 4 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and
Article XXII of the Agreement on Government Procurement (GPA) with respect to certain
procurement practices of the Korean Airport Construction Authority (KOACA) and other entities
concerned with the procurement of airport construction in Korea, which are inconsistent with Korea's
obligations under the GPA. Procurement practices of which we are aware include:
- Qualification: Requirements that, in order to be eligible to bid as a prime contractor, an
interested supplier must have a license which in turn requires that the supplier have
manufacturing facilities in Korea. This requirement appears to be inconsistent with
Article III(1), Article VIII and Article XVI of GPA.
- Domestic partnering: Requirements that foreign firms partner with local Korean firms in
order to qualify to participate in tendering procedures. For example, one solicitation for bids
states that: "Foreign firms should participate in a bid with local firms (leading or prime
company) as consortium members or subcontractors." We are also aware of other examples
of partnering requirements. Such requirements appear to be inconsistent with Article III(1),
Article VIII, and Article XVI of the GPA.
- Absence of access to challenge procedures: The GPA requires that member countries provide
effective procedures enabling suppliers to challenge alleged breaches of the GPA arising in
the context of procurements. However, such procedures do not exist for airport construction
procurements. This appears to be inconsistent with Article XX of the GPA.
- Inadequate bid deadlines: There are impositions of deadlines for the receipt of tenders that
are shorter than 40 days. This appears to be inconsistent with Article XI of the GPA.
KOACA and other entities procuring airport construction are within the scope of Korea's list
of central government entities, as specified in Annex 1 of Korea's coverage of obligations in
Appendix I of the GPA. Consequently, pursuant to Article I(1) of the GPA, Korea's obligations under
the GPA apply in full with respect to the procurement of airport construction. The above practices
nullify or impair benefits accruing to the United States under the GPA, whether or not they violate
Korea's GPA obligations.

GPA/D4/1

During negotiations with Korea for its membership into the GPA, the United States bargained
in good faith for the coverage of airport construction. The United States' GPA commitments with
respect to Korea and its acceptance of Korea as a party to the Agreement were based on a balance of
opportunities and obligations which included Korea's coverage of airport construction. Korea's
subsequent assertion that KOACA and other entities responsible for airport construction are not
covered by the GPA seriously disrupts that mutually-agreed balance.
We look forward to receiving your reply to the present request, and propose that
representatives of our governments meet for consultations during the week of 22 February 1999.