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

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Views of Interested Parties A number of interested parties provided testimony and written submissions to the Commission on the IPR chapter of the U.S.-Korea FTA. With regard to the copyright provisions, the Entertainment Industry Coalition for Free Trade (EIC), a group of entertainment companies and trade associations, and the Motion Picture Association of America (MPAA) testified at the Commission’s hearing that the infringement of copyrights on their materials represents the single largest trade barrier that the entertainment industries face and that enforcement is particularly difficult given the prevalence of broadband access in Korea. They said that the U.S.-Korea FTA would help to address these problems by providing high standards of copyright protection and by requiring the parties to ensure strong enforcement. 112 The EIC and MPAA particularly cited as a “tremendous move forward” the side letter in which Korea undertakes to issue a policy directive establishing clear jurisdiction for effective enforcement against online piracy and to prosecute persons who profit from developing services to induce infringement. 113 In a written submission to the Commission, the IIPA, also representing industries that depend on copyright protection, stated that if the provisions of the FTA are fully implemented, increased U.S.-Korea trade in copyright materials with accompanying positive effects on U.S. employment is likely to be achieved. IIPA added that the copyright-dependent industries consider the U.S.-Korea FTA to be one of the strongest and most progressive ever negotiated and expect its value to be substantial given Korea’s large and dynamic economy. 114 Similarly, Time Warner reported in a written submission to the Commission that access to the significant media market in Korea has been held back by widespread piracy. Time Warner stated that implementation of the IPR provisions, and the market access commitments, is likely to bring significant benefits to U.S. and Korean companies. Time Warner particularly cited as the important the copyright term extensions, which it said would support a continuing return on investment on older content that still has market value. 115 With regard to the patent provisions of the IPR chapter, the testimony of the Pharmaceutical Research and Manufacturers of America (PhRMA) cited three provisions as particularly important: the provision establishing a patent linkage system to prevent patent-infringing products from gaining market access, the data exclusivity provision, and the provision allowing for extension of the patent term to compensate for unreasonable delays in the patent or marketing application process. 116 112 Frazier, “Korea-U.S. Free Trade Agreement: Benefits to America’s Entertainment Industries,” written submission to the USITC, June 6, 2007, 5; and Frazier, testimony before the USITC, June 20, 2007, 56–58. 113 Frazier, “Korea-U.S. Free Trade Agreement: Benefits to America’s Entertainment Industries,” written submission to the USITC, June 6, 2007, 7. 114 IIPA, “Comments submitted to the U.S. International Trade Commission in inv. TA-2104-24,” written submission to the USITC, June 25, 2007, 2–3; See also USKFTABC, “Views on the Economic Impact of a United States-Korea Free Trade Agreement,” written submission to the USITC, June 27, 2007, 7. 115 Time Warner, “Comments of Time Warner, Inc., United State-Korea Free Trade Agreement Investigation TA-2104-24,” written submission to the USITC, June 21, 2007, 2. The Information Technology Industry Council (ITI) also notes that the IPR chapter is one of the strongest to be achieved and supports its provisions. Dawson, testimony before the USITC, June 20, 2007, 69. 116 PhRMA, “PhRMA Statement on the U.S.-Korea Free Trade Agreement (April 3, 2007),” 3; May, testimony before the USITC, June 20, 2007, 275–77. 6-28
In another submission to the Commission regarding the patent provisions, the Semiconductor Industry Association (SIA) urged further definition of the “inequitable conduct” basis for patent revocation included in the IPR chapter. SIA seeks an exchange of notes between the two governments to clarify what it believes would otherwise be a vague term that could erode protection for semiconductor patents. 117 Several of the Trade Advisory Committee Reports commented on the IPR chapter. The Industry Trade Advisory Committee on Intellectual Property Rights (ITAC 15) stated that it “strongly supports” the IPR chapter, stating that it “restores key provisions that had not been included in recent Trade Promotion Agreements (TPAs) or FTAs.” 118 The report added that ITAC 15 particularly supports the copyright text of the agreement, which it believes “materially advances the U.S. national interest.” 119 The report cited some “limitations” of the FTA, including the exception to the national treatment obligation for particular analog communications; a 2-year transition period for copyright term extension; and the lack of provisions on compulsory licensing, patent disclosure, and parallel importation. The report, however, noted that the FTA, taken as a whole, is “very strong” and ITAC 15 strongly supports its approval by Congress. 120 In its report, the Advisory Committee for Trade Policy and Negotiations (ACTPN) stated that it strongly endorses the IPR chapter. The ACPTN report said that the FTA contains “the strongest ever bilateral protections for intellectual property,” and cited particularly the enforcement provisions and state-of-the-art protections for trademarks, patents, Internet domain names, and copyrighted works. 121 The Industry Trade Advisory Committee for Information and Communications Technologies, Services, and Electronic Commerce (ITAC 8) and the Industry Trade Advisory Committee on Consumer Goods (ITAC 4) also expressed support for the IPR chapter in their respective reports. 122 The Industry Trade Advisory Committee for Chemicals, Pharmaceutical, Health/Science Products and Services (ITAC 3) said that most of its members support the IPR provisions of the FTA and particularly the provisions relating to patent linkage, data exclusivity, and patent-term extension, which they consider necessary to promote pharmaceutical innovation. 123 The report noted, however, that one of ITAC 3’s members, the Generic Pharmaceutical Association (GPHA), believes that while the standard of IPR protection in the United States carefully balances the goals of fostering pharmaceutical innovation with ensuring access to medicine, the FTA imposes barriers to the generics industry that do not exist in U.S. law. 124 117 SIA, “Comments Re: No. TA-2104-24, U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects,” written submission to the USITC, June 25, 2007, 4. 118 ITAC (15) on Intellectual Property Rights, Advisory Committee Report, April 27, 2007, 2–3. 119 Ibid., 13. 120 Ibid., 6. 121 ACTPN, Report, April 26, 2007, 5. 122 ITAC (8) for Information and Communications Technologies, Services and Electronic Commerce, Report, April 27, 2007, 13; and ITAC (4) on Consumer Goods, Report, April 26, 2007, 5. 123 ITAC (3) on Chemicals, Pharmaceuticals, Health/Science Products and Services, Advisory Committee Report, April 24, 2007, 15. 124 ITAC (3) on Chemicals, Pharmaceuticals, Health/Science Products and Services, Advisory Committee Report, April 24, 2007, 16. 6-29
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U.S. International Trade Commission
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This report was prepared principall
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CONTENTS-Continued Chapter 3. Secto
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CONTENTS—Continued Chapter 5. Imp
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CONTENTS-Continued Chapter 7. Liter
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CONTENTS-Continued Tables—Continu
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Abbreviations and Acronyms 3G third
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Abbreviations and Acronyms—Contin
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Abbreviations and Acronyms—Contin
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vehicles) would likely be diverted
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Sector-specific Assessments The U.S
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total increased fish imports from K
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Korea would likely limit the impact
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Intellectual property rights (IPR):
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sector barriers. 5 These merchandis
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Table 1.1 U.S.-Korea FTA: Location
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Table 1.2 Korean tariff rates on im
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Table 1.4 U.S.-Korea FTA: Summary o
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observed GDP for model regions). Th
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Box 2.1 Interpreting the model resu
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Table 2.1 U.S.-Korea FTA: Simulated
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2-8 This page has been updated to r
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Figure 2.2 U.S-Korea FTA: Simulated
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As shown in figure 2.2, the largest
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2-14 This page has been updated to
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Economy-wide Impact of Implementing
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Grain (Wheat, Corn, and Other Feed
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Korea imported 3.8 million mt of wh
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U.S. oilseed product exports to Kor
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Table 3.2 U.S. oilseed product expo
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Table 3.3 Animal feed exports to Ko
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consumed domestically by the U.S. l
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ates. For corn starch, the United S
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quota rates have been effectively e
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Noncitrus Fruit 87 Views of Interes
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3-20 Table 3.9 U.S.-Korea trade and
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Korean grapes are much more costly
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Potato Products 122 Assessment The
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ate is 304 percent ad valorem. 141
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Other Vegetables 162 Assessment The
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U.S. exports of other fresh and pro
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tariff concessions that could accru
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Dairy Products 215 Similarly, the p
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TRQ for food whey, 223 based on cur
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potential changes in trade based so
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Figure Figure 3.1 Korea: Beef and v
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Views of Interested Parties The inc
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are subject to the same food safety
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enefit under the provisions of this
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Box 3.2 Potential price and quantit
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50 percent, while the vegetable jui
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and major supplier, and U.S. tariff
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textiles and apparel through 2005.
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U.S. Exports The impact of the FTA
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passage. NCTO indicated that, even
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In its report, the ITAC on Distribu
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of the U.S. footwear market, with C
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of these producers. 362 RPFMA noted
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prohibit improper inducements by ph
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Machinery, Electronics, and Transpo
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U.S. exports of auto parts would be
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imports from and exports to Korea.
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Passenger Vehicles 433 Assessment U
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Table 3.16 Korean passenger vehicle
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import activities have continued
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Box 3.4 Automotive-related FTA Prov
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access. The FTA affirms the parties
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gaining U.S. market share regardles
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keep the products out.” 492 Mr. B
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these vehicles to Korea. The commit
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Brown expressed concern about the r
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goods; and high-technology medical,
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device pricing, reimbursement, and
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CHAPTER 4 Impact of Market Access P
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elative to GDP than do China, Japan
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services as a substantial improveme
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Box 4.2 Financial services: Competi
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Summary of Provisions Chapter 13 of
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national treatment, full establishm
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Box 4.4 Competitive conditions in t
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and cross-connect links 70 are more
Page 167 and 168: Box 4.5 U.S. legal services trade w
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Page 171 and 172: Box 4.6 Competitive conditions in t
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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
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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
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Page 204 and 205: Section C of Chapter 11 and the lac
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Page 208 and 209: FTA Chapter 17—Government Procure
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Page 214 and 215: Box 6.2 Recent conditions of IPR pr
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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
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Page 247 and 248: The California Table Grape Commissi
Page 249 and 250: order activity, and facilitate expa
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Page 253 and 254: Information Technology Industry Cou
Page 255 and 256: With respect to tariff and nontarif
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Page 259 and 260: PhRMA identified what it views as t
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Page 263 and 264: access to the market. The Council a
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Page 267 and 268: Bibliography Advanced Medical Techn
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AT&T. “AT&T Reaction to Free Trad
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______. “Korea-U.S. Free Trade Re
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______. “Country Finance: South K
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Global Trade Information Services I
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International Labor Organization (I
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Jones, Laura E. Executive Director.
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Lee, Hyunok, and Daniel A. Sumner.
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Nam, In-Soo. “Helio's Losses To W
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Powers, Mark. Northwest Horticultur
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Smith, Brad. American Council of Li
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U.S.-Korea Business Council (USKBC)
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______. “Korea, Republic of Oilse
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U.S. International Trade Commission
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Ward, David. American Council on Ed
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APPENDIX A Request Letter from USTR
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APPENDIX B Federal Register Notices
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pwalker on PROD1PC71 with NOTICES 2
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APPENDIX C Hearing Participants
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ORGANIZATION AND WITNESS: PANEL 1 (
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APPENDIX D U.S.-Korea FTA: Chapter-
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fees and charges on trade in goods
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determines the tariff classificatio
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The transparency provisions would a
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necessary duties within 1 year of i
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technical regulation or conformity
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procedures), and practices of a par
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aviation, fisheries, or maritime ma
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of standards and criteria and on te
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of the FTA that impose unilateral o
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use of electronic authentication in
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parties’ rights and obligations u
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establishment of Uniform Domain-Nam
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government to take appropriate meas
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environmental laws. 102 In the U.S.
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not limited to, policies on commerc
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Economic indicators 2002 2006 Popul
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Table E.1 Leading U.S. exports to K
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APPENDIX F GTAP Model
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Updating the GTAP Database The curr
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Key Assumptions Agency. 4 The price
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Table F.2 U.S.-Korea FTA benchmark
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Measuring the Impacts of the FTA an
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General Effects of Trade Agreements
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APPENDIX H Tariff Equivalents in Ko
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Previous Literature The method for
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For the purposes of this report, a
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Table H.1 Tariff equivalents in Kor
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APPENDIX I Services Nonconforming M
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Table I.1 U.S.-Korea FTA: Korean se
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APPENDIX J Description of Possible
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are in effect import prices, and th
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APPENDIX K Overview of Agricultural
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Additionally, although current regu
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About This Report The United States
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