./.WORLD TRADE
ORGANIZATIONS/CSS/W/84
11 May 2001
(01-2432)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM THE REPUBLIC OF KOREA
Negotiating Proposal for Construction Services
The following communication has been received from the delegation of the Republic of
Korea with the request that it be circulated to the Members of the Council for Trade in Services.
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I. BACKGROUND
1. The construction services sector is vital in establishing public infrastructure and promoting
national economic growth. For Korea, the construction industry has always played a key role in its
rapid economic development since the 1960s.  In 2000, it accounted for 14.5% share of the GDP,
which is much higher than the figure of most industrialized economies.
2. Liberalization of the construction services sector would greatly contribute to the development
of infrastructure and the creation of employment, especially in developing countries.  Considering that
only about 7% of the world’s cons truction market, which amounts to a total of $3.4 trillion in volume,
is open to foreign bidders, there is much need for further liberalization.
II. SCOPE OF THE NEGOTIATIONS
This proposal covers the following sub-sectors:
− General construction work for building (CPC 512)
− General construction work for civil engineering (CPC 513)
− Installation and assembly work (CPC 514, 516)
− Building completion and finishing work (CPC 517)
− Other (CPC 511, 515, 518)
3. This proposal focuses on barriers in the construction services industry that restrict market
access to foreign companies, including domestic regulations, and discriminatory treatment of
domestic and foreign companies. In particular , the negotiations should address the following
measures:
(a) Prohibition of commercial presence of foreign companies, limitation on foreign
investment in local corporations, and restrictions on the commercial activities of
foreign companies;
(b) Prohibiting or limiting the participation of foreign companies in bidding procedures
and the imposition of discriminatory requirements on bids by foreign companies;S/CSS/W/84
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(c) Requirements regarding local subcontracting, hiring of local workers, and local
procurement of materials;
(d) Discriminatory treatment of foreign companies in taxation and remittance of earnings.
III. EXPECTATIONS FROM THE NEGOTIATIONS
4. Korea proposes the following:
(a) Removal of discriminatory regulations on commercial presence;
(b) Elimination of discriminatory treatment against foreign companies in bidding
procedures;
(c) Relaxation of local content or local use requirements in the performance of contracts;
(d) Elimination of discriminatory provisions against foreign companies in taxation and
remittance of earnings.
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