Beef imports, opening of international legal channels among points covered
The Ministry of Foreign Affairs and Trade, which is proceeding with plans for a Korea-U.S. Free Trade Agreement (FTA), decided upon a draft for the agreement which is expected to be exchanged with the U.S. by May 19. The ministry and disclosed its four-page summary on May 15, which touches on such matters as reducing or abolishing import duties on U.S. beef. The 150-page, 22-chapter draft includes six sections regarding trade of merchandise goods and another six about investment in services. It also included a plan to introduce a system to levy import duties on agricultural products. Under the system, if the prices of imported farm produce go down to lower than a standard price or the quantity of imported produce increases to more than a certain standard, the government will impose additional duties on them. In addition, the government made an exception under which the goods which are manufactured in the Gaeseong Industrial Complex and for which the expenses of raw and subsidiary materials account for over 60 percent of the entire cost on a value added basis will be labeled as “made in Korea.” This measure will benefit those goods to be exported to the U.S. The Foreign Ministry announced that in order to check the U.S. imposing anti-dumping duties, it included a number of exceptions into the draft. However, when investment disputes take place, multi-national companies will be able to sue South Korean government through International Center for Settlement of Investment Disputes (ICSID) of the World Bank. The draft also contained a provision which prohibits imposing duties on the investors, which paved a way for the multi-national firms to evade the South Korean regulations on employment succession or mandatory employment of disabled people. In relation to the investment, services and intellectual property rights, the draft for the agreement stated the national treatment and the Americans who make investment in South Korea or have intellectual property rights can enjoy equal legal rights as South Koreans.In the meantime, a Foreign Ministry official Lee Hye-min said, “South Korea levies duties of 40 percent on the U.S. beef and this will be discussed separately from the quarantine problem,” adding, “As the matter of quarantine is connected with the food security, it should be announced (separately) according to an international standard and scientific basis.” The Foreign Ministry said that the problems of concessions on the goods and reservation of service investment will be discussed in the second round of negotiation in July.
