RESTRICTED
WORLD TRADE G/SG/W/110
26January 1996
ORGANIZATION(96-0281)
Original: English Committee onSafeguards
REPLIES TOQUESTIONS POSED BYTHE UNITED STATES1
CONCERNING THE NOTIFICATION OFLAWS AND REGULATIONS
OFKOREA2UNDER ARTICLE 12.6OFTHE AGREEMENT
Thefollowing communication, dated 11January 1996, hasbeenreceived fromthePermanent
Mission ofKorea.
_______________
Q1. General
Q1. (a) How isthe"administrative agency concerned whotakes charge oftheindustry",
referenced inSection 32(1) oftheForeign Trade Actandelsewhere, defined?
A1. (a) "Administrativeagencyconcerned"heremeanseachMinistryoftheKoreangovernment.
Forexample, theMinistry ofAgriculture, Forestry andFisheries isincharge of
agricultural products, andtheMinistry ofTrade, Industry andEnergy isincharge of
manufactured goods.
Q1. (b) Paragraphs 2and3ofsection 32(1) oftheForeign Trade Actrefer todamage toa
domestic industry caused by,respectively, increase oftradeandsupply ofdistribution
services, andimportation ofgoods thatinfringe protected intellectual property rights.
How, ifatall,dothese standards relate totheobligations contained intheAgreement
onSafeguards?
A1. (b) Paragraph 2isasafeguards measure fortheservice industry, paragraph 3isameasure
usedagainst theinfringement ofIntellectual Property Rights. Therefore, noneofthe
twoparagraphs aresubject totheAgreement onSafeguards.
Q1. (c) Articles 12and43-9oftheCustoms Acteachsetoutserious injury testsandauthorize
thetaking ofcertain remedial action. What isthelegal relationship between these
provisions? Aretheyseparate bases fortaking action, andifso,howdotheydiffer?
Howdothese provisions relate totheinjury standard contained inArticle 32(1) ofthe
Foreign Trade Act?
1G/SG/W/60 andG/SG/W/91.
2G/SG/N/1/KOR/2.G/SG/W/110
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A1. (c) Both Articles oftheCustoms Actarebased onArticle 19ofGATT 1994, andare
invoked byinvestigation andrecommendation oftheTrade Commission under the
Foreign Trade Act.
Q2. Imposition ofsafeguard measures
Q2. (a) Which ofthesixtypes ofremedial measures listed insection 34(1) oftheForeign Trade
Actmaybeemployed following afinding ofserious injury inasafeguard proceeding?
A2. (a) Among thesixremedial measures, item5isexcluded.
Q2. (b) Article 71oftheEnforcement Decree provides that,indeciding whatremedial measure
topropose, theTrade Commission shall examine theopinions ofthehead ofthe
administrative agency taking charge oftheindustry, andassociations, partnerships etc.
related totheindustry. Please explain whether theTrade Commission isrequired to
considertheopinionsofotherinterestedparties,suchasforeignproducersandexporters
andKorean importers.
A2. (b) Whenconductingsafeguardsinvestigations,theTradeCommissionsendsquestionnaires
toforeign producers andexporters anddomestic importers, andprovides them with
opportunities topresent theirviews through public hearings. According toEnforcement
Decree 67-4, interested parties cansubmit their views atanytime during the
investigation.TheTradeCommissionmakesadeterminationafterconsideringopinions
from allinterested parties collected through thisprocedure.
Q2. (c) Please explain thereference inArticle 72(2)1 oftheEnforcement Decree to"Article 47
oftheAct".
A2. (c) Article 47oftheActprovides thattraders maymake anagreement between them
concerning theprice, quantity, quality andother transactional conditions.
Q2. (d) Please explain whatismeant byArticle 72(2)2 oftheEnforcement Decree, andhow
theTrade Commission orother entitles oftheKorean Government would implement
orenforce suchameasure.
A2. (d) Thethrust ofArticle 72(2)2 oftheEnforcement Decree isthatbased onthe
recommendation oftheTrade Commission, therelevant Minister gives domestic
suppliers anddemanders theopportunity toconsult witheachother foradjustment.
Thepurpose ofthisprovision istoavoid more restrict measures suchasimport quotas
ortariff increases.
Q3. Provisional measures: Does thestandard setforth inthissection 35(1) oftheForeign Trade
Actprovide forafinding thatthereisclearevidence thatincreased imports havecaused orarethreatening
tocause serious injury prior totheapplication ofaprovisional safeguard measure, asrequired by
Article 6oftheAgreement onSafeguards?
A3. Therequirements forprovisional measures areconsistent withthose inArticle 6ofthe
Agreement.
Q4. Extension ofmeasures: Does thestandard setforthinArticle 74oftheEnforcement Decree
forextension ofmeasures include afinding thatthere isevidence thattheindustry isadjusting, as
required byArticle 7(2)oftheAgreement onSafeguards?G/SG/W/110
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A4. Although thecurrent lawdoesnotexplicitly statethisrequirement, theTrade Commission
shallreview whether theindustry isadjusting, asrequired byArticle 7(2)oftheSafeguards Agreement.
Weareconsidering specifying thisinthenextamendment oftheAct.
Q5. Procedures.
Q5. (a) Article 67(1) oftheEnforcement Decree liststhetypes ofpersons thattheTrade
Commission mayappoint toaninvestigation committee inconnection withasafeguard
proceeding. Please confirm whether thecommittee mayinclude private individuals
whoarenotaffiliated withthegovernment. Iftheanswer isyes,please explain how
theTrade Commission assures thatsuchindividuals, ifappointed, donotsuffer from
conflicts ofinterest duetotheirinterests orrelationships withinterested parties. We
areparticularly interested inthereference inparagraph 5to"other persons withawide
range ofknowledge andexperience inindustry, tradeandtheinternational economy."
A5. (a) Theinvestigation committee iscomposed ofgovernment officials andpersons affiliated
withthegovernment,suchasresearchersofgovernment-investedorganizationsorpublic
institutions. Their activities arelimited toclose examination intheareas where their
expertise isneeded, andtheydonottakepartininvestigations where conflicts ofinterest
mayarise. Ifnecessary, theyarerequired tosubmit awritten memorandum stating
thattheyareunrelated tothecaseunder theinvestigation. Iftheyarefound tobe
related, theyshallbeexcluded from theinvestigation committee.
Q5. (b) DoesArticle67-2(3)oftheEnforcementDecreeprovidethatahearingwillautomatically
begranted uponrequest ofanyinterested person? Does aninterested person include
aforeign producer orexporter ofthesubject goods, andanimporter ofthelikeor
directly competitive goods?
A5. (b) Ahearing isnotautomatically granted uponrequest ofinterested persons. However,
inpractice, hearings have always been heldduring theprocess ofinvestigation.
Interested parties include foreign producers, exporters anddomestic importers. They
participate inthehearing andpresent theirviews, andtheycansubmit theiropinions
atanytimeduring theinvestigation.
Q5. (c) Article 67-2(5) oftheEnforcement Decree provides thattheTrade Commission shall
comply withaninterested person 'srequest forinspection ofmaterials submitted by
therequesting person orother interested person "unless there isanyspecial reason."
Please explain whatbasis there could befordenial ofaccess tomaterials other than
where thematerials concern business secrets, referenced inArticle 67-4.
A5. (c) Materials denied fromaccess aremainly business secrets referred toinArticle 67-4.
Butother factors, forexample, which threatens national security ornational economy,
mayalsofallunder thiscategory.
Q5. (d) Article68(2)providesforterminationofasafeguardproceedingwhereaforeigncountry
hasagreed toreduce exports. Please explain howthisisconsistent withArticle 11(1)
oftheAgreement onSafeguards.
A5. (d) Thisprovision doesnotprovide thattheTrade Commission suggests orencourages
foreign exporters toreduce exports, butthattheCommission conveys suchwillon
behalf oftheexporter tothedomestic producer orthepetitioner. ThisisconsistentG/SG/W/110
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withArticle 3oftheAgreement which provides fortheopportunity forexporters to
present theirviews. Thus, thisprovision isdifferent fromthemeasures ofArticle 11.1
oftheAgreement.
Q5. (e) Article 75(1) oftheEnforcement Decree provides thatmeetings oftheTrade
Commission maybeclosed tothepublic ifdeemed necessary toprotect business secrets
or"forthepublic interest." Please explain thecircumstances inwhich thelatter phrase
mayapply.
A5. (e) Meetings oftheTrade Commission maybeclosed tothepublic when, forexample,
national security isthreatened, oranadverse effect onthenational economy isstrongly
expected.
Q5. (f) Arethere provisions inKorea 'slawpertaining totherequirement ofArticle 3ofthe
Agreement onSafeguards thattheauthorities publish areport setting forth findings
andreasoned conclusions onallpertinent issues offactandlaw?
A5. (f) Currently, there isnosuchprovision. However, theTrade Commission hasalways
publishedareportintheofficialgazette,settingforthfindingsandreasonedconclusions,
andhasnotified these totheinterested parties. Weareconsidering inclusion ofanew
provision pertaining topublic notice andnotification.
(Additional questions)
Q1. Towhich court mayKTC safeguards determinations beappealed?
A1. Generally,governmentactionsordecisionsmaybeappealedtotheHighercourt.(Koreanjudicial
system has3levels ofcourts, thatis,District Court, Higher Court andSupreme Court.)
Q2. Withregard toUS(written) question 2(c),Korea indicated thatArticle 47refers toagreements
between "traders" onprice, quantity, andother terms concerning theproduct atissue. What ismeant
by"traders"?
A2. "Traders" inArticle 47oftheActmeans "domestic exporters andimporters ortheir
associations."
Q3. (a) Withregard toUSquestion 5(c),hasaccess tomaterials everbeendenied forreasons
relating to"national security" or"national economy?"
A3. (a) There hasbeennosuchdenial ofaccess tomaterials sofar.
Q3. (b) Other thanbusiness secrets, whatinformation inneedofprotection fromrelease would
onereasonably expect interested parties, whoarenormally private business entities,
topossess?
A3. (b) Such information could bethatwhich threatens thepublic interest other thanprivate
business secrets.G/SG/W/110
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Q4. With regard toUSquestion 5(d),howisArticle 68(2) oftheEnforcement Decree consistent
withArticle 11oftheAgreement onSafeguards, since Article 68(2) provides forvoluntary export
restraints without adetermination ofserious injury?
A4. Asanswered at5(d), thisisnotaVER measure butoneoftheprocedures providing for
exporters 'opportunity topresent theirviews.