U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

More documents

Recommendations

Info

Professional Services 75 Assessment The professional services provisions of the FTA would likely contribute to increased market access and national treatment for U.S. professional services practitioners engaged in crossborder trade, especially in such services historically reserved for Korean-licensed practitioners and firms. Moreover, certain professional services are likely to benefit from the FTA’s establishment of a process that promotes the creation of mutual recognition agreements 76 in professions such as engineering and law. Additionally, as noted earlier, the FTA’s negative list approach extends trade disciplines to certain professional services, such as legal services (box 4.5), for which Korea made no commitments or only limited commitments under GATS. 77 Nevertheless, the FTA is likely to have a small effect on bilateral services trade in the near term because Korea’s professional services market would be opened only gradually and for a limited range of services. In addition, certain U.S. professional services firms providing engineering services and major worldwide networks of accounting firms already participate in the Korean market through means such as contractual associations with licensed Korean firms. 78 Bilateral trade in professional services 79 is relatively small, with U.S. exports to Korea measuring $930 million and U.S. imports from Korea measuring $120 million in 2005. 80 Summary of Provisions Provisions of the FTA related to cross-border trade in professional services are not included in a separate chapter, but instead Annex 12-A to chapter 12 covers measures related to licensing and certification of the other party’s professional services suppliers. The annex would commit each party, upon request, to provide information including the appropriate regulatory or other bodies to consult on standards and criteria 81 for licensing and certification of professional services suppliers. Upon agreement, each party must encourage relevant bodies to develop mutually acceptable standards and criteria for licensing and certification of professional services suppliers, to make recommendations on mutual recognition, and to develop procedures for the temporary licensing of the other party’s professional service suppliers, in particular those supplying engineering, architectural, and veterinary services. 75 Chapter 12 of the FTA defines professional services as services, the supply of which requires specialized postsecondary education, or equivalent training or experience or examination, and for which parties grant or restrict the right to practice, but not to include services supplied by tradespersons or vessel and aircraft crew members. 76 An agreement whereby each party recognizes the education or experience obtained, requirements met, or licenses or certifications granted in the territory of the other party. 77 WTO, “General Agreement on Trade in Services, Republic of Korea, Schedule of Specific Commitments,” April 15, 1994. 78 Professional services firms’ Internet sites, such as Bechtel Corporation, “About Bechtel”; Samil PricewaterhouseCoopers, Annual Report 2005; and Samjong KPMG, “What's New at KPMG.” 79 Trade data include business, professional, and technical services, and thus report trade on a wider range of services than solely professional services. 80 USDOC, BEA, Survey of Current Business, October 2006, 65–6. 81 Such standards and criteria may address education, examinations, experience, conduct and ethics, professional development and recertification, scope of practice, local knowledge, and consumer protection. 4-16
Box 4.5 U.S. legal services trade with Korea and the climate for opening the Korean market for legal services In 2005, U.S. cross-border exports of legal services to unaffiliated consumers in Korea amounted to $102 million, while U.S. imports of such services from unaffiliated suppliers in Korea totaled $21 million. Korea accounted for 2 percent of the total value of both U.S. exports and imports of legal services in 2005. The European Union Chamber of Commerce in Korea stated that Korea is the last economy in northeast Asia (including North Korea) and one of the last in the world to partially open its legal services market to foreign participation. About 8,000 Korea-licensed lawyers serve the market, or one lawyer for every 6,100 people, compared to one lawyer per 268 people in the United States. Korean law offices are generally smaller than those in the United States. The largest Korean law firm, Kim & Chang, employs 300 lawyers, tax lawyers, accountants, and patent and trademark attorneys. The firm states that many of its attorneys practiced previously with major law firms abroad and graduated from foreign universities. Only a few Korean law firms reportedly have experience serving multinational clients, resulting in a shortage of legal expertise relative to demand for the execution of large and complex financial and corporate transactions. The shortage of legal expertise often compels multinational clients to absorb the additional costs of engaging both Korean and non-Korean law firms in connection with such transactions. Such inefficiency and cost duplication likely place Korea at a comparative disadvantage relative to other Asian economies in meeting Korea’s policy goal of attracting significantly higher FDI. About 400 foreign lawyers are employed in Korea as consultants by Korean law firms, supplementing Korean-licensed practitioners. Foreign lawyers, however, rarely pass the difficult Korean bar examination required of anyone seeking to practice law in Korea. Likewise, few U.S. law firms have long-term experience serving clients in Korea because Korean law prohibits non-Korean law firms from establishing an office in Korea or entering into partnerships with or hiring Korean-licensed lawyers. Accordingly, a small number of U.S. and other non-Korean law firms serve Korean clients from offices in Japan, Hong Kong, China, or elsewhere, which reportedly inflates U.S. and other non-Korean law firms’ costs substantially. To minimize such cost effects and serve clients faster, U.S. law firms such as Paul, Hastings, Janofsky & Walker LLP, DLA Piper, and Akin Gump Strauss Hauer & Feld LLP reportedly plan to open foreign legal consultant (FLC) offices rapidly upon the FTA’s entry into force. Certain other U.S. law firms with Korean clients, such as Orrick, Herrington & Sutcliffe LLP, reportedly are likely to defer a decision on opening an FLC office in Korea because Korea is only gradually opening its legal services market, and more substantial trade opportunities for U.S. lawyers and law firms exist elsewhere in Asia, especially in China. Sources: Elinson, “Trade Pact News Spurs U.S. Law Firms' Interest in South Korea,” April 6, 2007; European Union Chamber of Commerce in Korea. “Legal Services Committee, Overview,” 2006; European Union Chamber of Commerce in Korea. “Legal Services Committee, Press Conferences 2006,” 2006; Hogarth, “Expansion-Minded Law Firms Look to Korea,” March 17, 2006; Kim and Chang (law firm), “Firm Profile,” 2007; Pettersson, “Seoul Poised to Admit Foreign Law Offices,” November 8, 2006; USDOC, BEA, “U.S. International Services: Cross-Border Trade in 2005 and Sales Through Affiliates in 2004”; and Yoo, “Korea, U.S. Grapple with Sensitive FTA Issues,” July 12, 2006. To facilitate these activities, the annex would commit the parties to establish a Professional Services Working Group, 82 comprising representatives of both parties, which is to meet by mutual consent within 1 year of the FTA’s entry into force. The Working Group would consider issues pertaining to professional services generally as well as individual professional services. The scope of work would include developing procedures to encourage mutual recognition arrangements and model procedures for licensing and certification, addressing regional-level government measures inconsistent with market access and national treatment, and discussing other mutual interests affecting the supply of professional services. The Working Group must consider bilateral, plurilateral, and multilateral agreements related to professional services. Within 2 years after the FTA’s entry into force, the Working Group must report on progress, including any recommendations on promoting mutual recognition 82 USTR, “Final Text of the U.S.-Australia Free Trade Agreement,” 2007. The U.S.-Australia Free Trade Agreement provided for a similar working group on professional services. 4-17
Page 2 and 3:
U.S. International Trade Commission
Page 4 and 5:
This report was prepared principall
Page 6 and 7:
CONTENTS-Continued Chapter 3. Secto
Page 8 and 9:
CONTENTS—Continued Chapter 5. Imp
Page 10 and 11:
CONTENTS-Continued Chapter 7. Liter
Page 12 and 13:
CONTENTS-Continued Tables—Continu
Page 15 and 16:
Abbreviations and Acronyms 3G third
Page 17 and 18:
Abbreviations and Acronyms—Contin
Page 19:
Abbreviations and Acronyms—Contin
Page 22 and 23:
vehicles) would likely be diverted
Page 24 and 25:
Sector-specific Assessments The U.S
Page 26 and 27:
total increased fish imports from K
Page 28 and 29:
Korea would likely limit the impact
Page 30 and 31:
Intellectual property rights (IPR):
Page 32 and 33:
sector barriers. 5 These merchandis
Page 34 and 35:
Table 1.1 U.S.-Korea FTA: Location
Page 36 and 37:
Table 1.2 Korean tariff rates on im
Page 38 and 39:
Table 1.4 U.S.-Korea FTA: Summary o
Page 40 and 41:
observed GDP for model regions). Th
Page 42 and 43:
Box 2.1 Interpreting the model resu
Page 44 and 45:
Table 2.1 U.S.-Korea FTA: Simulated
Page 46 and 47:
2-8 This page has been updated to r
Page 48 and 49:
Figure 2.2 U.S-Korea FTA: Simulated
Page 50 and 51:
As shown in figure 2.2, the largest
Page 52 and 53:
2-14 This page has been updated to
Page 54 and 55:
Economy-wide Impact of Implementing
Page 56 and 57:
Grain (Wheat, Corn, and Other Feed
Page 58 and 59:
Korea imported 3.8 million mt of wh
Page 60 and 61:
U.S. oilseed product exports to Kor
Page 62 and 63:
Table 3.2 U.S. oilseed product expo
Page 64 and 65:
Table 3.3 Animal feed exports to Ko
Page 66 and 67:
consumed domestically by the U.S. l
Page 68 and 69:
ates. For corn starch, the United S
Page 70 and 71:
quota rates have been effectively e
Page 72 and 73:
Noncitrus Fruit 87 Views of Interes
Page 74 and 75:
3-20 Table 3.9 U.S.-Korea trade and
Page 76 and 77:
Korean grapes are much more costly
Page 78 and 79:
Potato Products 122 Assessment The
Page 80 and 81:
ate is 304 percent ad valorem. 141
Page 82 and 83:
Other Vegetables 162 Assessment The
Page 84 and 85:
U.S. exports of other fresh and pro
Page 86 and 87:
tariff concessions that could accru
Page 88 and 89:
Dairy Products 215 Similarly, the p
Page 90 and 91:
TRQ for food whey, 223 based on cur
Page 92 and 93:
potential changes in trade based so
Page 94 and 95:
Figure Figure 3.1 Korea: Beef and v
Page 96 and 97:
Views of Interested Parties The inc
Page 98 and 99:
are subject to the same food safety
Page 100 and 101:
enefit under the provisions of this
Page 102 and 103:
Box 3.2 Potential price and quantit
Page 104 and 105:
50 percent, while the vegetable jui
Page 106 and 107:
and major supplier, and U.S. tariff
Page 108 and 109:
textiles and apparel through 2005.
Page 110 and 111:
U.S. Exports The impact of the FTA
Page 112 and 113:
passage. NCTO indicated that, even
Page 114 and 115:
In its report, the ITAC on Distribu
Page 116 and 117: of the U.S. footwear market, with C
Page 118 and 119: of these producers. 362 RPFMA noted
Page 120 and 121: prohibit improper inducements by ph
Page 122 and 123: Machinery, Electronics, and Transpo
Page 124 and 125: U.S. exports of auto parts would be
Page 126 and 127: imports from and exports to Korea.
Page 128 and 129: Passenger Vehicles 433 Assessment U
Page 130 and 131: Table 3.16 Korean passenger vehicle
Page 132 and 133: import activities have continued
Page 134 and 135: Box 3.4 Automotive-related FTA Prov
Page 136 and 137: access. The FTA affirms the parties
Page 138 and 139: gaining U.S. market share regardles
Page 140 and 141: keep the products out.” 492 Mr. B
Page 142 and 143: these vehicles to Korea. The commit
Page 144 and 145: Brown expressed concern about the r
Page 146 and 147: goods; and high-technology medical,
Page 148 and 149: device pricing, reimbursement, and
Page 151 and 152: CHAPTER 4 Impact of Market Access P
Page 153 and 154: elative to GDP than do China, Japan
Page 155 and 156: services as a substantial improveme
Page 157 and 158: Box 4.2 Financial services: Competi
Page 159 and 160: Summary of Provisions Chapter 13 of
Page 161 and 162: national treatment, full establishm
Page 163 and 164: Box 4.4 Competitive conditions in t
Page 165: and cross-connect links 70 are more
Page 169 and 170: establish offices in Korea to provi
Page 171 and 172: Box 4.6 Competitive conditions in t
Page 173 and 174: equirements and foreign ownership r
Page 175 and 176: CHAPTER 5 Impact of Trade Facilitat
Page 177 and 178: publication and administration of t
Page 179 and 180: Views of Interested Parties In its
Page 181 and 182: Summary of Provisions This chapter
Page 183 and 184: use of TBTs to protect Korea’s au
Page 185 and 186: conformity assessment procedures el
Page 187 and 188: FTA Chapter 15-Electronic Commerce
Page 189: Views of Interested Parties The U.S
Page 192 and 193: quantities as to be a substantial c
Page 194 and 195: that such transshipment could imped
Page 196 and 197: Box 6.1 Foreign investment in Korea
Page 198 and 199: in the FTA. The awards made by any
Page 200 and 201: Table 6.1 U.S.-Korea FTA: Industry
Page 202 and 203: (ITAC 5) report cited as particular
Page 204 and 205: Section C of Chapter 11 and the lac
Page 206 and 207: practices, and violations of consum
Page 208 and 209: FTA Chapter 17—Government Procure
Page 210 and 211: Both the United States and Korea ar
Page 212 and 213: 8) 87 also expressed support for th
Page 214 and 215: Box 6.2 Recent conditions of IPR pr
Page 216 and 217:
protection to life of the author pl
Page 218 and 219:
Views of Interested Parties A numbe
Page 220 and 221:
GPHA stated in testimony before the
Page 222 and 223:
Box 6.3 Labor market conditions in
Page 224 and 225:
FTA Chapter 20—Environment 131 As
Page 226 and 227:
trade measures are the least disrup
Page 228 and 229:
FTA Chapter 22-Institutional Provis
Page 230 and 231:
Views of Interested Parties The Ind
Page 233 and 234:
CHAPTER 7 Literature Review and Sum
Page 235 and 236:
7-3 Table 7.1 Model, liberalization
Page 237 and 238:
terms. Much of the increase in U.S.
Page 239 and 240:
Liberalization generated small incr
Page 241 and 242:
Sander Levin, Member of the U.S. Ho
Page 243 and 244:
Regarding footwear and travel goods
Page 245 and 246:
Korea’s establishment as a region
Page 247 and 248:
The California Table Grape Commissi
Page 249 and 250:
order activity, and facilitate expa
Page 251 and 252:
At the Commission’s hearing, Mr.
Page 253 and 254:
Information Technology Industry Cou
Page 255 and 256:
With respect to tariff and nontarif
Page 257 and 258:
deterring illegal transshipments. I
Page 259 and 260:
PhRMA identified what it views as t
Page 261 and 262:
the TIA stated that it supports the
Page 263 and 264:
access to the market. The Council a
Page 265 and 266:
United States, Spain, Chile, Brazil
Page 267 and 268:
Bibliography Advanced Medical Techn
Page 269 and 270:
AT&T. “AT&T Reaction to Free Trad
Page 271 and 272:
______. “Korea-U.S. Free Trade Re
Page 273 and 274:
______. “Country Finance: South K
Page 275 and 276:
Global Trade Information Services I
Page 277 and 278:
International Labor Organization (I
Page 279 and 280:
Jones, Laura E. Executive Director.
Page 281 and 282:
Lee, Hyunok, and Daniel A. Sumner.
Page 283 and 284:
Nam, In-Soo. “Helio's Losses To W
Page 285 and 286:
Powers, Mark. Northwest Horticultur
Page 287 and 288:
Smith, Brad. American Council of Li
Page 289 and 290:
U.S.-Korea Business Council (USKBC)
Page 291 and 292:
______. “Korea, Republic of Oilse
Page 293 and 294:
U.S. International Trade Commission
Page 295 and 296:
Ward, David. American Council on Ed
Page 297:
APPENDIX A Request Letter from USTR
Page 301:
APPENDIX B Federal Register Notices
Page 304 and 305:
pwalker on PROD1PC71 with NOTICES 2
Page 307:
APPENDIX C Hearing Participants
Page 310 and 311:
ORGANIZATION AND WITNESS: PANEL 1 (
Page 313:
APPENDIX D U.S.-Korea FTA: Chapter-
Page 316 and 317:
fees and charges on trade in goods
Page 318 and 319:
determines the tariff classificatio
Page 320 and 321:
The transparency provisions would a
Page 322 and 323:
necessary duties within 1 year of i
Page 324 and 325:
technical regulation or conformity
Page 326 and 327:
procedures), and practices of a par
Page 328 and 329:
aviation, fisheries, or maritime ma
Page 330 and 331:
of standards and criteria and on te
Page 332 and 333:
of the FTA that impose unilateral o
Page 334 and 335:
use of electronic authentication in
Page 336 and 337:
parties’ rights and obligations u
Page 338 and 339:
establishment of Uniform Domain-Nam
Page 340 and 341:
government to take appropriate meas
Page 342 and 343:
environmental laws. 102 In the U.S.
Page 344 and 345:
not limited to, policies on commerc
Page 347 and 348:
Economic indicators 2002 2006 Popul
Page 349 and 350:
Table E.1 Leading U.S. exports to K
Page 351:
APPENDIX F GTAP Model
Page 354 and 355:
Updating the GTAP Database The curr
Page 356 and 357:
Key Assumptions Agency. 4 The price
Page 358 and 359:
Table F.2 U.S.-Korea FTA benchmark
Page 360 and 361:
Measuring the Impacts of the FTA an
Page 363 and 364:
General Effects of Trade Agreements
Page 365:
APPENDIX H Tariff Equivalents in Ko
Page 368 and 369:
Previous Literature The method for
Page 370 and 371:
For the purposes of this report, a
Page 372 and 373:
Table H.1 Tariff equivalents in Kor
Page 375:
APPENDIX I Services Nonconforming M
Page 378 and 379:
Table I.1 U.S.-Korea FTA: Korean se
Page 381:
APPENDIX J Description of Possible
Page 384 and 385:
are in effect import prices, and th
Page 387:
APPENDIX K Overview of Agricultural
Page 390 and 391:
Additionally, although current regu
Page 392:
About This Report The United States
show all

U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?