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

trade measures are the least disruptive necessary to meet the goals of the MEAs. 139 In its
report, ITAC 7 said that the environment provisions and the associated ECA provide an
opportunity to demonstrate the parties’ commitment to improving global forestry practices
and taking steps to eliminate illegal logging, associated illegal border trade, and the use of
illegally obtained timber in the manufacturing of forest products. The report noted that the
ECA cites joint initiatives related to these global forestry practices and to combating the
illegal trade in wildlife and wildlife parts as a priority issue under the ECA. 140 In its report,
ITAC 3 stated that it believes that approaching environmental issues through bilateral FTAs
is inadvisable. The industry members of ITAC 3 also indicated that inclusion of
environmental provisions in future trade agreements in such a way as to lead to trade
sanctions is misguided. 141
FTA Chapter 21–Transparency
Assessment
Lack of transparency in Korea’s regulatory system has been cited as a fundamental and
longstanding impediment to the operation of a wide range of U.S. firms in the country,
including those, for example, in the financial services, information technology,
pharmaceutical, and telecommunications industries. 142 Provisions in the U.S.-Korea FTA
regarding transparency would likely offer far-reaching improvements over the policies and
practices that they are intended to replace, enhancing the security of business transactions
and creating the potential to foster U.S.-Korea trade and investment. 143 For example, the FTA
would likely provide the public with improved access and information in dispute-settlement
cases. Such dispute-settlement mechanisms provide for public hearings, public access to
documents, and the opportunity for third parties to submit views in an open forum.
Additional transparency provisions apply in the areas of customs administration,
pharmaceutical pricing and reimbursement, technical regulations, financial services, and
telecommunications. 144 For instance, included in the agreement are provisions that would
improve transparency in customs procedures, which have been a significant impediment to
the transport of express delivery shipments, and that would require more open and public
processes for customs rulings and administration. Similarly, transparency provisions on
financial services would likely improve market access for foreign firms by requiring that
application requirements for financial service suppliers be made publicly available, and by
requiring that such suppliers have the opportunity to comment on proposed regulations. 145
Finally, the FTA would continue the U.S. effort to obtain bilateral commitments to
transparency disciplines applicable to domestic regulation, including provisions that are
intended to enhance and ensure communication and disclosure between parties.
139 ITAC (9) on Non-ferrous Metals and Building Materials, Advisory Committee Report, April 27,
2007, 5.
140 ITAC (7) on Forest Products, Advisory Committee Report, April 26, 2007, 6.
141 ITAC (3) on Chemicals, Pharmaceuticals, Health/Science Products and Services, Advisory Committee
Report, April 24, 2007, 13.
142 USTR, “Korea,” 2007 National Trade Estimate Report on Foreign Trade Barriers, April 2, 2007, 369;
and USITC hearing transcript, June 20, 2007, 23–29, 48, 69, and 189.
143 Reis, testimony before the USITC, June 20, 2007, 29.
144 USTR, Free Trade with Korea - Summary of the KORUS FTA, April 2007.
145 Vastine, testimony before the House Committee on Ways and Means, March 20, 2007.
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