RESTRICTED
WORLD TRADE G/SG/W/109
26January 1996
ORGANIZATION(96-0280)
Original: English Committee onSafeguards
REPLIES TOQUESTIONS POSED BYJAPAN1
CONCERNING THE NOTIFICATION OFLAWS AND REGULATIONS
OFKOREA2UNDER ARTICLE 12.6OFTHE AGREEMENT
Thefollowing communication, dated 11January 1996, hasbeenreceived fromthePermanent
Mission ofKorea.
_______________
Q1. Article 32
ThisArticle anticipates possible causes forthedamage tothedomestic industry asfollows:
- increase intheimport ofspecified goods,
- increase inthetrade ofspecified goods,
- increase inthesupply ofdistribution services.
Q1. (1) What isthemeaning of"trade"? What makes itdifferent from"import" inthiscase?
A1. (1) Article32.2providesforsafeguardsontheserviceindustry,particularlyfortrade-related
service anddistribution service. Therefore, theterm "trade" means trade-related
services. TheEnglish language version might havearoused some confusion.
Q1. (2) What isthemeaning of"supply ofdistribution services"? Howcanyoujustify taking
safeguard measures ontheground thattheincrease ofsuchsupply ofdistribution
services specifically byforeigners causes orthreatens tocause damages tothedomestic
industry under Article XIXofGATT oftheAgreement onSafeguards (hereinafter
referred toasSGA)?
A1. (2) Themeasure based onSubparagraph 2issubject totheGeneral Agreement onTrade
inServices (GATS), andnottotheSafeguards Agreement. Sofar,nomeasure has
been implemented byinvocation ofthisprovision, andnodetailed sub-rules or
regulations havebeenenacted. Wewillarrange fordetailed procedures based onthis
Article asthenegotiation ofservice-related safeguards proceeds.
Q2. TheArticle 34(1) enumerates possible remedial measures (safeguard measures) which may
betaken inthecasewhere theTrade Commission hasdetermined thatthere exists anydamage tothe
domestic industry asaresult oftheinvestigation:
1G/SG/W/47 +Corr.1 andG/SG/W/92.
2G/SG/N/1/KOR/2.G/SG/W/109
Page2
Q2. (1) Oneofthose measures issuspension orprohibition ofimports against specified goods
ortraders. Issuchameasure consistent withtheSGA, inparticular, withparagraph 1
ofArticle 5oftheAgreement?
A2. (1) "Suspension orprohibition ofimports" doesnotpertain tosafeguards measures, but
tomeasures against infringement ofIntellectual Property Rights.
Q2. (2) What kindofeffect doesithavetodesignate aparticular industry asanindustry to
berationalized under theIndustry Development Act? What docompanies inthat
industry havetodounder theIndustry Development Act? Dothose companies include
those runbyforeigners?
A2. (2) According toArticle 5oftheIndustrial Development Act,anindustry isdesignated
forrationalization "when itisrecognized thatsecuring international competitiveness
isessential forindustrial development andfordevelopment ofthenational economy,
andwhen itisdifficult tosecure competitiveness bytheefforts oftheindustry alone."
Based onArticle 10,there isusually financial assistance andtaxcredits.
AccordingtoArticle7,"enterprisessubjecttoindustryrationalizationmustmakesincere
efforts fortechnology development andproductivity increase". Since theindustry for
rationalization isdesignated bytheplans devised bytheMinister ofTrade, Industry
andEnergy, domestic firms willusually besubject torationalization.
Q3. Wehavesome questions concerning therelationship between theForeign Trade Actandthe
Customs Act. Forexample:
Q3. (1) What isthedifference between theadjustment ofcustoms tariff under Article 34(1)2
oftheForeign Trade Actandtheapplication ofemergency duties under theCustoms
Act?
A3. (1) Following aninvestigation andrecommendation oftheTrade Commission based on
Article 34oftheForeign Trade Act,theMinister ofFinance andEconomy mayimpose
emergency tariffs under Article 12oftheCustoms Act.
Q3. (2) Inorder toimpose theemergency duties under theCustoms Acttothespecified
products, istheinvestigation bytheTrade Commission under theArticle 33ofthe
Foreign Trade Actprerequisite?
A3. (2) Yes.
Q3. (3) Arethereanyinvestigative procedures tobefollowed under theCustomers Actinorder
toimpose emergency duties asasafeguard measure which aredifferent from the
procedures under theForeign Trade Act? Ifso,please explain them indetail. What
isthename oftheauthorities competent toinitiate andconduct suchinvestigations?
A3. (3) No.G/SG/W/109
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(Additional questions)
Q1. Article 68(2)
Cantheconsultation heldbetween (1)foreign producers orother interested parties and(2)
requestingpartiesunderthisparagraphenjoyimmunityfromcivilandcriminalliabilityundertheKorean
legislation suchascompetition law? What sortofmeasures doestheTrade Commission ofKorea
takesoastohavethetwoparties consult witheachother? Inaddition, please explain howthisis
consistent withparagraphs 1and3ofArticle 11oftheAgreement onSafeguards (the"SGA").
A1. TheKorean competition law(Monopoly Regulation andFairTransaction Act)hasnorelation
withthesafeguards procedure.
Themeaning ofArticle 68(2) oftheDecree isthatwhen theforeign producer 'sorexporter 's
proposition isdirected totheKorean Government (theCommission), theCommission doesnotsimply
ignore theproposition, butrather delivers theproposition tothedomestic producers inorder tomake
therelated parties consult witheachother andavoids thegovernmental interference withtheirprivate
consultation.
Thus, Article 68(2) oftheDecree isdifferent fromtheprohibited measures oftheArticle 11
oftheAgreement.
Q2. Article 72(2)
Please explain themeaning ofArticle 72(2)2 oftheEnforcement Decree. HowdoestheKorean
Government recommend thismeasure toitsdomestic industries anditsdomestic consumers? Please
explain howthismeasure isconsistent withArticles IIIandXIofGATT.
A2. AsafeguardsmeasurecansuspendtheGATTobligationsorwithdrawormodifytheconcessions,
ifitistaken under theconditions specified inGATT XIXandtheSafeguards Agreement. Further,
themeasure ofArticle 72(2)2 doesnotviolate GATT obligations ofArticles ofIIIandXI.