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

fees and charges on trade in goods must be published on the Internet. Korea must recognize
Bourbon Whiskey and Tennessee Whiskey as distinctive U.S. products, and the United
States must recognize Andong Soju and Gyeongju Beopju as distinctive Korean products.
Korea is required to amend its Special Consumption Tax and Annual Vehicle Tax to exempt
certain goods and reduce the taxes on other goods; it is barred from amending its Subway
Bond and Regional Development Bond (specified in a footnote) to increase the existing
disparity in purchase rates over categories of vehicles as of the time the FTA enters into
force. A Committee on Trade in Goods is established to consider all matters arising under
this chapter, chapter 6 (rules of origin), or chapter 7 (customs administration and trade
facilitation). It would also promote bilateral trade in goods, review changes to the
Harmonized System 2007 nomenclature, 1 and carry out certain consultations between the
parties.
FTA Chapter 3—Agriculture
Chapter 3 of the U.S.-Korea FTA would dictate the administration of agricultural tariff-rate
quotas (TRQs), the application of agricultural safeguard measures, and the establishment of
a Committee on Agricultural Trade.
The chapter is intended to ensure that the administration of TRQs occurs in a fair,
reasonable, and transparent manner. Categories of products covered by TRQs would range
from immediate duty-free access for most in-quota quantities to an 18-year TRQ phaseout
period for most over-quota quantities. A few U.S. exports would always have duty-free inquota
access limited by expanding TRQs. There would be no change in treatment for Korean
imports of rice and rice products from the United States under the FTA. 2
Additionally, chapter 3 would define the application of quantity-based agricultural safeguard
measures on originating agricultural goods. Provisions would require that any safeguard
under the FTA not coincide with other safeguards, and that safeguard duties not exceed
relevant MFN rates. Once applied, each country must implement the safeguard in a
transparent manner and provide the other party notification and relevant data within 60 days.
Agricultural products originating in either country would be exempt from any safeguards
taken under the WTO Agreement on Agriculture. No safeguard duty could be applied to inquota
shipments. Phaseout periods for safeguards on U.S. agricultural exports would range
from 8 to 24 years.
Chapter 3 also would establish the Committee on Agricultural Trade as an annual forum for
monitoring implementation, mutual consultation, and any additional work the committee
deems necessary. Committee decisions would be taken by consensus.
1 The Harmonized Commodity Description and Coding System (HS) of the World Customs Organization
(WCO) serves as the basis of both parties’ national tariff schedules; the 2007 revision of the HS serves as the
basis of interpretation for classification purposes in future. The WCO conducts a regular review of the HS
every 5 years with a view toward updating and simplifying the nomenclature structure and attaining
consistent classifications of goods in trade.
2 Rice would continue to follow minimum market access commitments established in the 2005 WTO
Certification of Modifications and Rectifications to Schedule LX—Republic of Korea.
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