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

accessories, not knitted or crocheted) and made from certain nonoriginating cotton velveteen
and corduroy fabrics, handwoven wool Harris Tweed, combed wool or fine-animal-hair
fabrics, and polyester batiste fabrics, provided that the outer shells of the garments, exclusive
of collars or cuffs, are wholly of such fabrics and that the garments are cut and assembled
in the FTA region. The FTA would also grant duty preferences to men’s and boys’ woven
shirts made from nonoriginating fine-count woven fabrics of cotton or man-made fibers.
FTA chapter 4 also contains a temporary provision that would grant duty preferences to
specified quantities of imports of fabrics and apparel that are made in the FTA region from
fibers, yarns, or fabrics not commercially available in the United States or Korea (Article 4.2
and Annex 4-B). It would require an importing party to grant duty preferences to such
nonoriginating fabrics and apparel on the same basis as originating goods, but not to exceed
an aggregate of 100 million square meters equivalent for fabrics and an identical amount for
apparel in each of the first 5 calendar years of the FTA, unless the parties agree to extend the
period for application of the annex. Annex 4-B contains each party’s list of fibers, yarns, and
fabrics not available in commercial quantities in a timely manner in its territory (Appendix
4-B to Annex 4-B) and sets out procedures that allow each party to add or delete a fiber,
yarn, or fabric from its list (neither party’s list currently contains any fibers, yarns, or fabrics
not available in commercial quantities). 9
FTA Chapter 5—Pharmaceuticals and Medical Devices
The pharmaceutical products and medical devices chapter of the U.S.-Korea FTA (FTA
chapter 5) would require each party to promote access to both innovative (patented) and
generic pharmaceuticals and medical devices through transparent and accountable pricing
and reimbursement procedures, 10 regulatory cooperation, and ethical business practices.
With respect to transparency, the chapter provisions would require both parties to ensure that
their laws, regulations, and general procedures related to pricing, reimbursement, and
regulation are promptly published or otherwise made available so that interested persons and
the other party may become familiar with them. 11 Further, each party would be required to
publish in advance any such measures it proposes to adopt and provide interested persons
and the other party a reasonable opportunity to comment on them and to have their
comments taken into account in the final regulations. 12
9 A side letter to FTA chap. 4 of June 30, 2007, from the U.S. Special Textile Negotiator to the Korean
Deputy Minister for Major Manufacturing Industries states that Korea expressed interest in adding certain
cotton sheeting fabrics, man-made fiber knit fabrics, polyester and other synthetic filament fabrics, and wool
fabrics to the U.S. list in app. 4-B. The letter further states that the United States will, upon receipt of a
request from the Government of Korea or another interested entity after the date of entry into force of the
FTA, consider the request in accordance with the procedures set out in annex 4-B of the FTA, under which
the United States will make its decision on the request within 30 business days of receiving the request
unless it has insufficient information, in which case it will make its decision within an additional 30 business
days.
10 This FTA would be the second, after the U.S.-Australia FTA, to include a section on the pricing and
reimbursement of pharmaceutical products. Chap. 5 of the U.S.-Korea FTA expands and clarifies many of
the provisions of Annex 2-C of the U.S.-Australia FTA and includes medical devices in addition to
pharmaceutical products.
11 USTR, “Final - United States - Korea FTA Text,” 2007, Article 5.3.1–5.3.4.
12 With respect to regulations of its central level of government, respecting pricing, reimbursement, or
regulation, each party would publish the proposed regulations, including their purpose, in a single national
journal, not less than 60 days before the comment due date in most cases; address in writing significant,
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