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

use of electronic authentication in their respective markets; and (3) includes principles that
ensure consumers’ reasonable access to the Internet to conduct electronic commerce.
First, under the U.S.-Korea FTA, the parties would commit to nondiscriminatory treatment
of digital products and agree not to impose customs duties, fees, or other charges on such
products, whether traded in physical form or electronically over the Internet. In addition, the
parties would agree not to accord less favorable treatment to some digital products than are
accorded to other like products because they were created, stored, transmitted, published, or
first made commercially available outside its territory, or because of the nationality of the
author, performer, producer, developer, or distributor of such digital products.
Second, the U.S.-Korea FTA is aimed at ensuring that the parties accept the validity of
electronic authentication and electronic signatures. Neither party, for example, may deny the
legality of a signature solely because it is in electronic form.
Finally, the U.S.-Korea FTA includes provisions that are intended to promote and maintain
online consumer protection, including those that foster cooperation in enforcing laws against
fraudulent and deceptive e-commerce practices. The FTA introduces principles not included
in previous FTAs that would promote consumer access to the Internet to conduct electronic
commerce, and that would emphasize the importance of maintaining unrestricted crossborder
information flows. Such principles likely reflect the rapid growth of both business-tobusiness
and business-to-consumer electronic commerce in Korea in recent years. 65
FTA Chapter 16—Competition-Related Matters
Chapter 16 of the FTA would address competition policy, designated monopolies, and state
enterprises, with the objective of proscribing anticompetitive business conduct in order to
promote economic efficiency and consumer welfare. 66 The chapter would obligate the United
States and Korea to maintain competition laws that protect and promote competitive business
conditions by proscribing anticompetitive business conduct that might hinder bilateral trade
and investment, to maintain authorities responsible for enforcement of these laws on terms
of national treatment and MFN treatment, and to provide transparent and nondiscriminatory
due-process means to remedy disputes under the FTA concerning violations of these
competition laws.
The chapter would permit either party to establish or maintain a designated monopoly or
state enterprise, but would obligate each party to ensure that such designated enterprises
operate in accordance with normal commercial practices that do not abuse their special
status, which might otherwise, as a result, create obstacles to bilateral trade and investment. 67
Under the agreement, designated monopolies and state enterprises would be permitted to
charge different prices in the marketplace where such differences are based on normal
commercial considerations such as supply and demand conditions. The chapter’s provisions
governing designated monopolies do not apply to government procurement. Upon request,
a party would need to provide public information on designated monopolies and state
enterprises at any government level, or on exemptions and immunities to its competition
65 KIEC, Republic of Korea, “Korea e-Commerce: Infrastructure.”
66 USTR, “Final - United States - Korea FTA Texts,” 2007, Article 16.1.
67 Ibid., Article 16.2, and Article 16.4.
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