The U.S.-South Korea Free Trade Agreement (KORUS FTA), which was approved by Congress in P.L. 112-41 and entered into force on March 15, 2012, follows current U.S. free trade agreement (FTA) practice in containing two types of dispute settlement: (1) State-State, applicable to disputes between the Parties to the KORUS FTA, and (2) investor-State, applicable to claims by an investor of one Party against the other Party for breach of a KORUS FTA investment obligation. Investor-State dispute settlement procedures have been a key element of U.S. bilateral investment treaties (BITs) and, with the inclusion of investment obligations in most U.S. FTAs, they have become a feature of these agreements as well. The United States originally decided to include reciprocal investor-State dispute settlement in its BITs, as described by one commentator, "to provide investors with a stable and secure dispute settlement device and to de-politicize investment disputes." As further noted, "[c]ompulsory arbitration provisions can deter some disputes, and can resolve others without the necessity of State Department involvement." The KORUS FTA also contains language relevant to dispute settlement stemming from a bipartisan understanding on trade policy between congressional leaders and the George W. Bush Administration finalized on May 10, 2007, setting out various provisions to be added to completed or substantially completed FTAs pending at the time. Aimed at, among other things, expanding and further integrating labor and environmental obligations into the FTA structure, the May 10 understanding provides that labor and environmental obligations in an FTA are to be subject to the same State-State dispute settlement provisions, enforcement mechanisms, and remedies for non-compliance as the agreement's commercial obligations. The same approach to labor and environmental disputes is also found in the U.S.-Peru Trade Promotion Agreement, which entered into force on February 1, 2009, and in U.S. FTAs with Colombia and Panama, approved by Congress in October 2011 along with the KORUS FTA. The potential scope of KORUS FTA dispute settlement is limited by the scope of the KORUS FTA obligations that would be taken on by the Parties, and it is thus important to consider the nature and scope of these obligations in considering the potential ramifications of the dispute settlement articles. Exceptions to KORUS FTA obligations are also an element in assessing the scope of the commitments undertaken by each Party. For example, general exceptions contained in World Trade Organization (WTO) agreements—namely, Article XX of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article XIV of the General Agreement on Trade in Services (GATS)—are incorporated into the KORUS FTA for purposes of obligations involving trade in goods and services. The KORUS FTA also contains an "essential security" exception, which a dispute or arbitral panel must find to apply if it is invoked by the defending Party to justify the challenged measure. In general, resort to panels under FTA State-State dispute settlement has been uncommon and thus there has been relatively little experience with the operation of this mechanism over a range of agreements and issues. This may be the case because of FTA consultative arrangements that facilitate the informal resolution of disputes or questions over the scope of an agreement or its application in a particular instance before resort to more structured dispute settlement procedures is considered necessary. In addition, the fact that a party may ultimately seek a panel may provide leverage for settlement at an early stage of the dispute. In addition, WTO dispute settlement is generally available where a dispute arises under both a WTO agreement and an FTA. South Korea and the United States have each initiated disputes against each other in the WTO since the WTO agreements entered into force on January 1, 1995, the cases illustrating the types of trade issues that have been particularly significant to each country. Of the 15 WTO complaints brought by South Korea against WTO Members, nine disputes have been instituted against the United States, each involving a trade remedy, most often the imposition of an antidumping or countervailing duty on South Korean products. It should be noted, however, that in general WTO complaints brought against the United States have increasingly involved trade remedy issues. The United States has instituted 100 WTO disputes, with six of these brought against South Korea. Five U.S. complaints have challenged restrictive Korean requirements on trade in agricultural products or alcoholic beverages, including restrictions on imports of beef, with one case addressing a government procurement issue. FTA investor-State claims have been the most prevalent under the North American Free Trade Agreement (NAFTA), with cases filed against all three NAFTA Parties, that is, the United States, Canada, and Mexico. The U.S. State Department currently lists 17 claims against the United States, all but one instituted by a Canadian investor or investors. In addition, five investor-State cases have been filed under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), the regional agreement to which Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua are also party. One DR-CAFTA cases has been brought against the Dominican Republic, two against El Salvador, and two against Guatemala, each filed by a U.S. investor. One claim under the U.S.-Peru Trade Promotion Agreement, filed by the U.S. investor Renco Group, is currently pending. To date, investor-State claims have not been filed under other U.S. FTAs. The United States has entered into BITs and most of its FTAs with developing countries and, thus, with countries that import capital from the United States rather than exporting it to this country. As is the case with its NAFTA partners, however, the United States imports capital from South Korea to a greater degree than it does from parties to these other U.S. investment agreements and Korean investment in the United States may indeed grow over the course of the FTA. While this situation may thus create a greater potential for investor-State disputes than exists under most other U.S. investment agreements, the extent to which disputes involving Korean investors will in fact arise would seemingly depend upon a variety of factors and interests unique to an investor's individual situation and thus for now remains only a matter for conjecture. To date, the United States has prevailed in all investor-State cases brought against it. State-State dispute settlement procedures in most U.S. free trade agreements generally follow the pattern of dispute settlement set out in the World Trade Organization (WTO) Dispute Settlement Understanding and thus provide for (1) initial consultations; (2) a dispute panel if consultations fail to resolve the dispute; (3) an implementation period if the challenged Party is found to be in violation of an agreement obligation; and (4) remedies for non-compliance. State-State or general dispute settlement is set out in Chapter Twenty-Two, Section B, of the KORUS FTA, which applies to disputes involving the interpretation or application of the agreement or wherever a Party considers (1) that a measure of the other Party is inconsistent with KORUS FTA obligations; (2) that the other Party has otherwise failed to carry out its KORUS FTA obligations; or (3), with some exceptions, that an enumerated KORUS FTA benefit that the complaining Party could reasonably have expected to accrue to it—for example, a tariff reduction—is being nullified or impaired by a measure of the other Party that is not inconsistent with the agreement. Dispute settlement begins with a consultation request by the complaining Party, to which the other Party must promptly respond. The consultation request must set out the reason for the request, identify the measure or other matter at issue, and indicate the legal basis for the complaint. If the dispute is not resolved within 60 days of the initial request (20 days for matters involving perishable products), either Party may request a meeting of the U.S.-South Korea Joint Committee, an administrative body established under agreement consisting of cabinet-level trade officials of the Parties or their designees. A Party may also refer a matter to the Joint Committee if the Parties fail to resolve a matter within 60 days under the consultations provisions of the labor chapter (Art. 19.7) or the environmental chapter (Art. 20.9) of the agreement. In either case, the Joint Committee is to "promptly meet and endeavor to resolve the matter." If the Joint Committee has not resolved a matter within 60 days after a referral, within 30 days where perishable goods are involved, or within another agreed-upon period, the complaining Party may refer the matter to a dispute settlement panel. The panel is automatically established upon delivery of a panel request to the other Party. The agreement sets out requirements and procedures for constituting a panel unless the Parties agree on other terms. Panels will consist of three members. The complaining and defending Parties appoint one panelist each. If either fails to do so within 28 days after the panel is established, the panelist is to be selected by lot from a roster of panelists, referred to in the agreement as the "contingent list." Peremptory challenges are also available if an originally designated panelist is not on the contingent list. The Parties are expected to agree on a third panelist to chair the panel, but if they cannot agree to do so within 28 days after the second panelist is chosen, the Parties are to meet within seven days and choose a chair by lot from among individuals on the contingent list who are not nationals of either the United States or South Korea. The United States and South Korea agree to establish model rules of procedure for panels by the date the agreement enters into force.