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

opportunities for U.S. lawyers and law firms to supply legal services in Korea and partner
with Korean law firms. 91 He asserted that reservations in an annex to the agreement temper
opportunities with regard to opening Korea’s legal services market, yet not severely enough
to cause the U.S. legal services industry to withhold its support for the agreement. Korea’s
ambassador to the United States cited legal services among the service industries for which
market access opportunities would expand further under the U.S.-Korea FTA. 92
Audiovisual Services 93
Assessment
The U.S.-Korea FTA would likely provide U.S. audiovisual service firms increased levels
of market access and national treatment by minimizing or freezing most local content quotas
and substantially liberalizing foreign ownership restrictions in the Korean broadcasting and
film industries. The effect of FTA provisions on U.S. cross-border exports, however, is likely
to be modest in the short term, owing to Korea’s relatively mature and domestically oriented
audiovisual services market (box 4.6). 94 Similarly, the FTA would likely have minimal
impact on U.S. cross-border imports of audiovisual services from Korea, largely due to the
predominance of domestic television programs and films in the United States. 95 In 2005, U.S.
cross-border imports of film and television tape rentals from Korea reached $4 million, while
U.S. cross-border exports to Korea amounted to $65 million.
Improvement in U.S. firms’ access to the Korean audiovisual services market under the FTA
is significant. The Korean government has committed to lock in most local content
requirements in television programs and films at the least restrictive level under current law,
including a motion picture screen quota that would not exceed 73 days (down from
146 days). 96 In addition, the FTA’s provisions may encourage further investment in Korea’s
broadcasting and cable sectors, as Korea has made commitments to phase in up to
100 percent foreign ownership of Korean channel operators and to permit U.S. investment
in Korea’s rapidly growing digital media services market (which includes Internet-protocol
television [IPTV]). 97 Moreover, the FTA strengthens intellectual property rights protections
relating to audiovisual services by including side letters that dedicate additional resources
to fight online piracy. 98
91 Goyer, testimony before the USITC, June 20, 2007, 79, 93.
92 Ambassador Lee, testimony before the USITC, June 20, 2007, 13.
93 Audiovisual services refers to terrestrial, cable, and satellite television program broadcasting and
motion picture production and distribution.
94 Generally, most broadcasting and film quotas are filled to the maximum allowed level in Korea.
Animation programming, however, is below its full capacity because of the dominance of Korean animation.
U.S. industry representative, e-mail messages and telephone interview with Commission staff, June 19, 2007.
95 USDOC, BEA, Survey of Current Business, October 2006, 69. The U.S. audiovisual services market is
already largely open to foreign firms, except with regard to radio and transmission services, where a single
company is prohibited from owning a combination of newspapers, radio, and television broadcast stations in
a single local market. WTO, “General Agreement on Trade in Services, United States of America, Schedule
of Specific Commitments,” April 15, 1994.
96 This screen quota reduction was made prior to the commencement of FTA negotiations. Korea requires
that Korean motion pictures must be projected for at least 73 days per year at each Korean screen. USTR,
“Final - United States - Korea FTA Texts,” 2007.
97 Mergent, “The Asia-Pacific Media Sectors,” March 2007, 24–5.
98 USTR, “Final - United States - Korea FTA Texts,” 2007.
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