RESTRICTED
WORLD TRADE G/SG/W/112
26January 1996
ORGANIZATION(96-0283)
Original: English Committee onSafeguards
REPLIES TOQUESTIONS POSED BYAUSTRALIA1
CONCERNING THE NOTIFICATION OFLAWS AND REGULATIONS
OFKOREA2UNDER ARTICLE 12.6OFTHE AGREEMENT
Thefollowing communication, dated 11January 1996, hasbeenreceived fromthePermanent
Mission ofKorea.
_______________
Q1. Theintroduction noted thatarevision ofthelegislation (sub-rules andregulations) wastobe
completed by1July1995andnotified totheCommittee. Could Korea provide advice ofthesituation
regarding thepublication andnotification oftherevision.
A1. Korea 'ssafeguards law,contained intheForeign Trade Act,wasnotified onMarch 15.But
atthattime, theEnforcement Decree oftheActwasunder revision andtherefore could notbenotified
together. Also, afterthecompletion oftherevision, notification wasdelayed duetodifficulties in
English translation. Weregret thatwecould notprovide enough timeforother Member countries to
review ourEnforcement Decree.
Q2. During theexamination ofKorea 'santi-dumping andcountervailing dutylegislation bythe
jointmeeting oftheAnti-Dumping Practices andSubsidies andCountervailing Measures Committees
inJuly1995, Korea explained howtheAnti-Dumping andSubsidies Agreements hadequal status with
other legislation under Korean domestic law. Isthesame trueoftheSafeguards Agreement? Ifso,
could Korea clarify thefollowing points.
Q2. (a) What isthehierarchy between theSafeguards Agreement andother Korean legislation,
regulations, andother administrative rules?
A2. (a) Thehierarchyofdomesticlawsisasfollows:Constitution-Acts-EnforcementDecrees
ofthePresident, thePrime Minister andeachMinisters. Article 6oftheConstitution
stipulates that"Agreements signed andpublicly notified bytheconstitution, and
international lawsandregulations generally approved, havethesame effect asthe
domestic laws." Also, Article 60oftheconstitution refers to"agreements concerning
major international organizations." Therefore, theWTO Agreements havethesame
effect asthedomestic laws. Having thesame effect doesnotgenerally mean thatall
agreements aredirectly applied inKorea. Inthecaseofagreements regarding trade
affairs,it'sratherunderstoodthattheConstitutionlegallyobligestheKoreangovernment
toconform domestic lawstotheinternational agreements.
1G/SG/W/45.
2G/SG/N/1/KOR/1.G/SG/W/112
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Q2. (b) Will subsequent laws (including regulations andother administrative rules) take
precedence overtheSafeguard Agreement? Forexample, would theforeshadowed
newregulation takeprecedence overtheSafeguards Agreement ifacourt found that
there wasaconflict?
A2. (b) When lawsareamended, theytakeprecedence overtheSafeguards Agreement.
Q2. (c) Intheabsence ofaspecific provision inregulations, which levels ofofficials would
havetheauthority tointerpret theSafeguards Agreement todetermine procedure in
ananti-dumping orcountervailing dutyaction?
A2. (c) Thecommissioners ofKorean Trade Commission (KTC).
Q2. (d) Intheevent ofaconflict between theSafeguards Agreement andother laws, could
investigating officials decide which lawshaveprecedence?
A2. (d) Yes,insuchcases, theinvestigating officials candecide thismatter.
Q2. (e) Could aninterested party appeal tothecourts about theinterpretation oftheSafeguards
Agreement byofficials?
A2. (e) Ofcourse, aninterested party hastherighttoappeal tothecourts.
Q2. (f) Howwould Korea handle aconflict inviews overtheinterpretation oftheSafeguards
Agreement between aKorean court andtheWTO Dispute Settlement Body?
A2. (f) Thequestion ofaccepting DSBdeterminations isnotconfined tothesafeguards sector
alone. Currently, Korean lawhasnospecific provision regarding theacceptance of
DSB determinations. Therefore, Korea willfollow itsgeneral practices regarding
compliance ofinternational obligations.
Foreign Trade Act
Q3. What provision isthere forthepublic notice ofaninvestigation andforpublishing thereport
ofthefindings andconclusions?
A3. Provisions regarding public notices arefound inArticles 66(2) and68(3) oftheEnforcement
Decree. Weareconsidering combining therelevant textsofthese Articles intooneprovision.
Q4. How would Korea determine thescope of"domestic industry"?
A4. Thescope ofdomestic injury isstipulated inArticle 64ofEnforcement Decree. Asprescribed
intheAgreement, domestic industry means "allproducers orproducers constituting amajor proportion
ofthetotalproduction oflikeproducts ordirectly competing products."
Q5. Istheterm"serious damage" usedinArticle 32interpreted inthesamewayas"serious injury"
inArticle 4.1(a) oftheSafeguards Agreement?
A5. "Damage" inthedomestic lawshasthesame meaning asserious "injury" intheAgreement.G/SG/W/112
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Q6. Paragraph 33(4) refers toadetermination of"nodamage" andparagraph 34(1) refers to
determination of"anydamage". Arethese interpreted inthesense of"serious damage"?
A6. "Damage" inthedomestic lawsmeans "serious damage", anditisthesameas"serious injury"
intheAgreement.
Q7. What provision isthereduring theinvestigation forallinterested parties todefend theirinterests
andhaveaccess tothesubmissions ofother parties?
A7. Article 67-2ofEnforcement Decree provides forsuchrights ofinterested parties.
Q8. IstheTrade Commission required tolimititsrecommendations onsafeguard action tothelevel
necessary toprevent orremedy serious injury andtofacilitate adjustment? IstheTrade Commission
required tofollow theprovisions inArticle 5oftheSafeguards Agreement inanyrecommendation
onquantitative restrictions?
A8. Asthemeasure iscalled a"remedial measure", safeguards measure islimited tothelevel
necessary toprevent orremedy serious injury andtofacilitate adjustment. Since Article 5ofthe
Agreement isreproduced inArticle 72-2(3) oftheDecree, theCommission follows theruleofthe
Agreement regarding quantitative restrictions.
Q9. Subparagraph 34(1)1 envisages restrictions notonlyon"quantity" butalso"quality, etc.of
suchimported goods". Does thisapply tosafeguard actions under theSafeguards Agreement? If
so,whatjustification would there beforrestrictions onquality grounds andwhatother grounds are
envisaged by"etc"?
A9. Import restrictions onquality wasprovided inaneffort toprevent imports oflowquality from
non-Members oftheWTO. However, there havebeennorestrictions onthegrounds oflowquality
thusfar,andsuchrestrictions willnotbetaken assafeguards measure inthecaseofWTO Members.
Wearenotproviding anyspecific meaning fortheterm"etc" other thanthelisted measures.
Q10. Subparagraph 34(1)5 refers tothesuspension orprohibition ofimports against specified goods
ortraders. Does thisapply tosafeguard actions under theSafeguards Agreement? Ifso,what
justification would there beforsuch action? What other measures areenvisaged under
subparagraph 34(1)6?
A10. Subparagraph 34(1)5 does notpertain tosafeguards measures, buttomeasures against
infringement ofIntellectual Property Rights. "Other measures" ofsubparagraph 34(1)6 arelisted in
Enforcement Decree 72(2). "Other measures" referenced inArticle 72(2)5 isprovided toreflect various
measures aimed atfacilitating adjustment.
Q11. Paragraph 34(3) provides foralonger timeperiod "ifitisnecessary toconsult withmajor
interested countries". When would itnotbenecessary toconsult withother interested government?
Which suppliers would fallunder theterm"major interested countries"?
A11. "Major interested parties" inourlawmeans those members having substantial interests as
exporters oftheproduct concerned asArticle 12.3oftheAgreement stipulates.G/SG/W/112
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Q12. Could Korea explain theoperation ofparagraph 34(5), inparticular whowould deem thatthere
exists causes toundotheremedial measure andwhowould heartheopinion oftheTrade Commission
inthis? Would theprocess besubject toapublic investigation andreport"?
A12. Itistherelevant minister whodeems thatthereexistcauses toterminate theremedial measure,
andthatminister alsohears theopinion oftheTrade Commission onthis.Public investigation isnot
conducted forthatpurpose oftermination ofsafeguards measure, butthedecision willbebased on
theappropriate consideration bytheadministrative agency.
Q13. Does theTrade Commission havetomake adetermination oncausal linkbefore making a
recommendation under paragraph 35(1) regarding theimposition ofprovisional measures?
A13. Yes,adetermination oncausal linkmust bemade alsointhecaseofprovisional measures.
Q14. Section 2-2(Article 36-2) refers torestrictions onimports oftextiles andclothing. Would
suchmeasures betaken under theSafeguards Agreement orunder theTextiles andClothing Agreement?
Iftheformer, willthesame procedures befollowed asforother sectors?
A14. Article 36-2stipulates transitional safeguards bytheAgreement onTextile andClothing, and
itisnotsubject totheSafeguards Agreement.
Customs Act
Q15. Article12providesfortheimpositionofadditionalcustomsdutiesuptothelevelofthedifference
between domestic andforeign prices. Isthissubject totheprovisions oftheForeign Trade Actset
outinthenotification? Does thislimittheextent ofadditional customs duties under Article 34ofthe
Foreign Trade Act? Could thismean avariable levelofadditional duties overtime?
How would thedomestic andforeign prices bedetermined?
A15. Yes, following aninvestigation andrecommendation oftheTrade Commission based on
Article 34oftheForeign Trade Act,theMinister ofFinance andEconomy mayimpose emergency
tariffs under Article 12oftheCustoms Act.Thephrase "thelevelofthedifference between domestic
andforeign prices" maybedeleted inthenextrevision oftheCustoms Act.