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

CHAPTER 6
Impact of Regulatory Provisions
This chapter assesses the likely impact of provisions in the U.S.-Korea FTA related to the
regulatory environment. These provisions cover nine FTA chapters (10, 11, 16–22) and
include the following topics: trade remedies, investment, competition policy, government
procurement, intellectual property rights, labor, environment, transparency, and dispute
settlement.
FTA Chapter 10–Trade Remedies
Assessment
Under the provisions of the trade remedies chapter, each party would retain all rights and
obligations of Article XIX of GATT 1994, the WTO Agreement on Safeguards and
Countervailing Measures, and the WTO Agreement on Implementation of Article VI of the
GATT 1994 (the Anti-dumping Agreement). The trade remedies chapter of the U.S.-Korea
FTA, like earlier FTAs that the United States has entered into, would authorize a party to
apply a safeguard measure against the goods of the other party during the transition period
of the agreement if, as a result of the reduction or elimination of a duty under the agreement,
an article is being imported from the other party in such increased quantities as to be a
substantial cause of serious injury or threat thereof to a domestic industry producing a like
or directly competitive good.
The agreement does not mandate any changes to U.S. antidumping and countervailing duty
(AD-CVD) law or change domestic processes for making such changes. The chapter would
provide, in a departure from past FTAs, for certain consultations in the course of AD-CVD
investigations, exchanges of information concerning AD-CVD practices, and the possibility
of accepting undertakings on price or quantity instead of imposing AD and CVD duties. In
another departure from other FTAs, the chapter would also provide for the establishment of
a Committee on Trade Remedies that would oversee implementation of this chapter and
facilitate exchange and cooperation among the parties related to trade remedy issues.
The U.S. industry sectors most likely to be affected by this chapter, positively or negatively,
are those that would seek relief, particularly under the bilateral safeguard provision, and
those whose exports to Korea would be the subject of any measures applied by Korea under
the agreement. The specific industry sectors affected would depend on the products that are
the subject of any such measures.
Summary of Provisions
Section A of Chapter 10 contains a bilateral safeguard provision similar to bilateral safeguard
provisions in other free trade agreements that the United States has entered into in recent
years. It would allow a party to increase a rate of duty or suspend further reductions in the
rate of duty if its designated competent authority finds, as a result of the reduction or
elimination of a duty under the agreement, that imports of a good are in such increased
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