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

quantities as to be a substantial cause of serious injury, or a threat of serious injury, to a
domestic industry producing a like or directly competitive good. No duty could be increased
to an amount that exceeds the lesser of the current MFN rate of duty or the rate in effect
immediately preceding the date of entry into force of the agreement. The duration of any
measure could not exceed 2 years, except that the period could be extended by up to 1 year
if certain conditions are found to be present. A measure that exceeds 1 year must be
progressively liberalized at regular intervals. A party could not apply a bilateral safeguard
measure more than once against the same good, and a measure could not be applied beyond
the transition period except with the consent of the other party.
A party applying a measure must provide compensation to the other party in an amount
mutually agreed upon; if the parties are unable to agree on compensation, the other party
could suspend concessions with respect to originating goods of the party applying the
safeguard measure that have trade effects substantially equivalent to the safeguard measure.
The FTA allows a party to apply a measure on a provisional basis (for up to 200 days) when
critical circumstances are found to exist. The agreement defines terms and sets out certain
procedural requirements, including notification consultation requirements. Each party would
retain its rights and obligations under Article XIX of the GATT 1994 and the WTO
Safeguards Agreement. The chapter, however, would provide that a party applying a (global)
safeguard measure under the WTO Safeguards Agreement could exclude imports of a good
from the other party if such imports from the other party are not a substantial cause of
serious injury or threat thereof.
Section B states that each party would retain its rights and obligations under the WTO
agreement with regard to the application of antidumping and countervailing duties. It states
that, with the exception of paragraphs 3 and 4 of Article 10.7 (which relate to notification
and consultations and certain “undertakings”), no provision of the agreement should be
construed as imposing any rights or obligations on a party with respect to antidumping or
countervailing duty measures. In a departure from previous FTAs, paragraph 3 would require
that a party, upon receipt of an application and before initiating an investigation, provide
notice to the other party and opportunity for a meeting. 1 Also new in this FTA, paragraph 4
of Article 10.7 would require the parties, after making a preliminary affirmative
determination of dumping or subsidization and injury caused by such dumping or
subsidization, to consider “undertakings” with respect to price and, in countervailing duty
investigations, quantity, which may result in suspension of the investigation without the
imposition of antidumping or countervailing duties. 2
1 More specifically, paragraph 3 of Article 10.7 requires that a party, upon receipt of a properly
documented antidumping or countervailing duty application with respect to imports from the other party, and
before initiating an investigation, provide written notification to the other party of its receipt of the
application and afford the other party a meeting or similar opportunity regarding the application, consistent
with the party’s law.
2 Paragraph 4 lists three “undertakings.” First, after initiation of an antidumping or countervailing duty
investigation, a party agrees to transmit to the other party’s embassy or competent authorities written
information regarding their procedures for requesting consideration of an undertaking on price or, as
appropriate, quantity, including the time frames for offering and concluding any such undertaking. Second,
in an antidumping investigation in which a party’s authorities have made a preliminary affirmative
determination of dumping and injury, the party must afford “due consideration, and adequate opportunity for
consultations” to exporters of the other party regarding proposed price undertakings, which, if accepted, may
result in suspension of the investigation without imposition of antidumping duties, through the means
provided for in the party’s laws and procedures. Third, in a countervailing duty investigation in which party
authorities have made a preliminary affirmative determination of subsidization and injury, the party must
(continued...)
6-2