Title
FREE TRADE AGREEMENT BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, OF THE ONE PART, AND THE REPUBLIC OF KOREA, OF THE OTHER PART
Preamble
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, hereinafter referred to as "the United Kingdom" or "UK", of the one part, and THE REPUBLIC OF KOREA, hereinafter referred to as "Korea", of the other part,
DESIRING to further strengthen their close economic relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new climate for the development of trade and investment between the Parties;
CONVINCED that this Agreement will create an expanded and secure market for goods and services and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
REAFFIRMING their commitment to the Charter of the United Nations signed in San Francisco on 26 June 1945 and the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10 December 1948;
REAFFIRMING their commitment to sustainable development and convinced of the contribution of international trade to sustainable development in its economic, social and environmental dimensions, including economic development, poverty reduction, full and productive employment and decent work for all as well as the protection and preservation of the environment and natural resources;
RECOGNISING the right of the Parties to take measures necessary to achieve legitimate public policy objectives on the basis of the level of protection that they deem appropriate, provided that such measures do not constitute a means of unjustifiable discrimination or a disguised restriction on international trade, as reflected in this Agreement;
RESOLVED to promote transparency as regards all relevant interested parties, including the private sector and civil society organisations;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare by liberalising and expanding mutual trade and investment;
SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to mutual trade and investment;
RESOLVED to contribute to the harmonious development and expansion of world trade by removing obstacles to trade through this Agreement and to avoid creating new barriers to trade or investment between their territories that could reduce the benefits of this Agreement;
DESIRING to strengthen the development and enforcement of labour and environmental laws and policies, promote basic workers' rights and sustainable development and implement this Agreement in a manner consistent with these objectives; and
BUILDING on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994 (hereinafter referred to as the "WTO Agreement") and other multilateral, regional and bilateral agreements and arrangements to which they are party;
HAVE AGREED as follows:
Body
Chapter ONE. OBJECTIVES AND GENERAL DEFINITIONS
Article 1.1. Objectives
The Parties hereby establish a free trade area on goods, services, establishment and associated rules in accordance with this Agreement.
The objectives of this Agreement are:
(a) to liberalise and facilitate trade in goods between the Parties, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as "GATT 1994");
(b) to liberalise trade in services and investment between the Parties, in conformity with Article V of the General Agreement on Trade in Services (hereinafter referred to as "GATS");
(c) to promote competition in their economies, particularly as it relates to economic relations between the Parties;
(d) to further liberalise, on a mutual basis, the government procurement markets of the Parties;
(e) to adequately and effectively protect intellectual property rights;
(f) to contribute, by removing barriers to trade and by developing an environment conducive to increased investment flows, to the harmonious development and expansion of world trade;
(g) to commit, in the recognition that sustainable development is an overarching objective, to the development of international trade in such a way as to contribute to the objective of sustainable development and strive to ensure that this objective is integrated and reflected at every level of the Parties' trade relationship; and
(h) to promote foreign direct investment without lowering or reducing environmental, labour or occupational health and safety standards in the application and enforcement of environmental and labour laws of the Parties.
Article 1.2. General Definitions
Throughout this Agreement, references to:
the Parties mean, on the one hand, the United Kingdom and on the other hand, Korea;
and
Korea-EU FTA mean the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part, signed at Brussels on 6 October 2010.
Article 1.3. References to Legislation
1. References in this Agreement to European Union or Korean legislation are to be read as references to that legislation as amended or replaced on the date of entry into force of this Agreement, provided that such amendments or replacements do not reduce market access, or increase barriers to trade, between the Parties. (1)
2. For the purposes of paragraph 1, European Union legislation is replaced by that European Union legislation in force as incorporated or implemented in United Kingdom law on the day after the United Kingdom ceases to be bound by the relevant European Union legislation.
3. Where references to European Union legislation are found in provisions of this Agreement which extend to territories for whose international relations the United Kingdom is responsible, as set out in Article 15.15, "United Kingdom law" in paragraph 2 includes the law of those territories.
4. Where references to United Kingdom legislation are found in provisions of this Agreement which extend to territories for whose international relations the United Kingdom is responsible, as set out in Article 15.15, those references to United Kingdom legislation shall, in respect of those territories, be read as references to the corresponding legislation of those territories.
Chapter TWO. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. COMMON PROVISIONS
Article 2.1. Objective
The Parties shall progressively and reciprocally liberalise trade in goods over a transitional period in accordance with this Agreement and in conformity with Article XXIV of GATT 1994.
Article 2.2. Scope and Coverage
This Chapter shall apply to trade in goods (1) between the Parties.
Article 2.3. Customs Duty
For the purposes of this Chapter, a customs duty includes any duty or charge of any kind imposed on, or in connection with, the importation of a good, including any form of surtax or surcharge imposed on, or in connection with, such importation (2). A customs duty does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article 2.8 in respect of the like domestic good or in respect of an article from which the imported good has been manufactured or produced in whole or in part;
(b) duty imposed pursuant to a Party's law consistently with Chapter Three (Trade Remedies);
(c) fee or other charge imposed pursuant to a Party's law consistently with Article 2.10; or
(d) duty imposed pursuant to a Party's law consistently with Article 5 of the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Agreement on Agriculture").
Article 2.4. Classification of Goods
The classification of goods in trade between the Parties shall be that set out in each Party's respective tariff nomenclature interpreted in conformity with the Harmonized System of the International Convention on the Harmonized Commodity Description and Coding System, done at Brussels on 14 June 1983 (hereinafter referred to as the "HS ").
Section B. ELIMINATION OF CUSTOMS DUTIES
Article 2.5. Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods of the other Party in accordance with its Schedule included in Annex 2-A.
2. For each good, the base rate of customs duties, to which the successive reductions are to be applied under paragraph 1, shall be that specified in the Schedules included in Annex 2-A.
3. If at any moment a Party reduces its applied most-favoured-nation (hereinafter referred to as "MFN") customs duty rate after the entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule included in Annex 2-A.
4. Three years after the entry into force of this Agreement, on the request of either Party, the Parties shall consult to consider accelerating and broadening the scope of the elimination of customs duties on imports between them. A decision by the Parties in the Trade Committee, following such consultations, on the acceleration or broadening of the scope of the elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules included in Annex 2-A for that good.
Article 2.6. Standstill
Except as otherwise provided in this Agreement, including as explicitly set out in each Party's Schedule included in Annex 2-A, neither Party may increase any existing customs duty, or adopt any new customs duty, on an originating good of the other Party. This shall not preclude that either Party may raise a customs duty to the level established in its Schedule included in Annex 2-A following a unilateral reduction.
Article 2.7. Administration and Implementation of Tariff-Rate Quotas
1. Each Party shall administer and implement the tariff-rate quotas (hereinafter referred to as "TRQs") set out in Appendix 2-A-1 of its Schedule included in Annex 2-A in accordance with Article XII of GATT 1994, including its interpretative notes and the Agreement on Import Licensing Procedures, contained in Annex 1A to the WTO Agreement.
2. Each Party shall ensure that:
(a) its procedures for administering its TRQs are transparent, made available to the public, timely, non-discriminatory, responsive to market conditions, minimally burdensome to trade, and reflect end-user preferences;
(b) any person of a Party that fulfils the importing Party's legal and administrative requirements shall be eligible to apply and to be considered for a TRQ allocation by the Party. Unless the Parties otherwise agree by decision of the Committee on Trade in Goods, any processor, retailer, restaurant, hotel, food service distributor or institution, or any other person is eligible to apply for, and to be considered to receive, a TRQ allocation. Any fees charged for services related to an application for a TRQ allocation shall be limited to the actual cost of the services rendered;
(c) except as specified in Appendix 2-A-1 of its Schedule included in Annex 2-A, it does not allocate any portion of a TRQ to a producer group, condition access to a TRQ allocation on the purchase of domestic production, or limit access to a TRQ allocation to processors; and
(d) it allocates TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request. Except as otherwise stipulated in the provisions for each TRQ and the applicable tariff line in Appendix 2-A-1 of a Party's Schedule included in Annex 2-A, each TRQ allocation shall be valid for any item or mixture of items subject to a particular TRQ, regardless of the item's or mixture's specification or grade, and shall not be conditioned on the item's or mixture's intended end-use or package size.
3. Each Party shall identify the entities responsible for administering its TRQs.
4. Each Party shall make every effort to administer its TRQs in a manner that allows importers to fully utilise TRQ quantities.
5. Neither Party may condition application for, or utilisation of, TRQ allocations on the re export of a good.
6. On the written request of either Party, the Parties shall consult regarding a Party's administration of its TRQs.
7. Except as otherwise provided in Appendix 2-A-1 of its Schedule included in Annex 2-A, each Party shall make the entire quantity of the TRQ established in that Appendix available to applicants as from 1 July each year. Over the course of each year, the importing Party's administering authority shall publish, in a timely fashion on its designated publicly available Internet site, utilisation rates and remaining quantities available for each TRQ.
Section C. NON-TARIFF MEASURES
Article 2.8. National Treatment
Each Party shall accord national treatment to goods of the other Party in accordance with Article II] of GATT 1994, including its interpretative notes. To this end, Article II of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.9. Import and Export Restrictions
Neither Party may adopt or maintain any prohibition or restriction other than duties, taxes or other charges on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, in accordance with Article XI of GATT 1994 and its interpretative notes. To this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.10. Fees and other Charges on Imports or Exports
1. Each Party shall ensure that all fees and charges of whatever character (other than customs duties and the items that are excluded from the definition of a customs duty under Article 2.3(a), (b) and (d)) imposed on, or in connection with, importation or exportation are limited in amount to the approximate cost of services rendered, are not calculated on an ad valorem basis, and do not represent an indirect protection to domestic goods or taxation of imports for fiscal purposes.
2. Each Party shall promptly publish all fees and charges it imposes in connection with importation or exportation through a publicly available Internet website to enable governments, traders and other interested parties, to become acquainted with them.
Article 2.11. Duties, Taxes or other Fees and Charges on Exports
Neither Party may maintain or institute any duties, taxes or other fees and charges imposed on, or in connection with, the exportation of goods to the other Party, or any internal taxes, fees and charges on goods exported to the other Party that are in excess of those imposed on like goods destined for internal sale.
Article 2.12. Customs Valuation
The Agreement on Implementation of Article VII of GATT 1994 contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Customs Valuation Agreement"), is incorporated into and made part of this Agreement, mutatis mutandis. The reservations and options provided for in Article 20 and paragraphs 2 through 4 of Annex III of the Customs Valuation Agreement shall not be applicable.
Article 2.13. State Trading Enterprises
1. The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, its interpretative notes and the Understanding on the Interpretation of Article XVI of GATT 1994, contained in Annex 1A to the WTO Agreement which are incorporated into and made part of this Agreement, mutatis mutandis.
2. Where a Party requests information from the other Party on individual cases of state trading enterprises, the manner of their operation and the effect of their operations on bilateral trade, the requested Party shall have regard to the need to ensure maximum transparency possible without prejudice to Article XVIL.4(d) of GATT 1994 on confidential information.
Article 2.14. Elimination of Sectoral Non-Tariff Measures
1. The Parties shall implement their commitments on sector-specific non-tariff measures on goods in accordance with the commitments set out in Annexes 2-B through 2-E.
2. Three years after the entry into force of this Agreement and on the request of either Party, the Parties shall consult to consider broadening the scope of their commitments on sector specific non tariff measures on goods.
Section D. SPECIFIC EXCEPTIONS RELATED TO GOODS
Article 2.15. General Exceptions
1. The Parties affirm that their existing rights and obligations under Article XX of GATT 1994 and its interpretative notes, which are incorporated into and made part of this Agreement, shall apply to trade in goods covered by this Agreement, mutatis mutandis.
2. The Parties understand that before taking any measures provided for in subparagraphs (i) and (j) of Article XX of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. Ifno agreement is reached within 30 days of supplying such information, the Party may apply measures under this Article on the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.
Article 2.15bis. Transitional Provisions (3)
1. This Article applies where this Agreement does not come into force on the date on which the Korea-EU FTA ceases to apply to the United Kingdom.
2. In respect of goods originating in the Parties which are exported on or after the date on which the Korea-EU FTA ceases to apply to the United Kingdom and are imported into a Party, or which are either en route, or in temporary storage in customs warehouses or in free zones in Korea or in the United Kingdom before this Agreement comes into force, the importing Party shall grant, or, from the date on which this Agreement comes into force, grant retroactively the preferential tariff treatment in accordance with this Agreement.
3. For the purposes of this Article, goods originate in the Parties if they comply with the conditions in the Protocol concerning the definition of "originating products" and methods of administrative cooperation and a proof of origin was issued at the time of exportation or, in exceptional circumstances, up to 12 months after that date.
Section E. INSTITUTIONAL PROVISIONS
Article 2.16. Committee on Trade In Goods
1. The Committee on Trade in Goods established pursuant to Article 15.2.1 (Specialised Committees) shall meet on the request of a Party or of the Trade Committee to consider any matter arising under this Chapter and comprise representatives of the Parties.
2. The Committee's functions shall include:
(a) promoting trade in goods between the Parties, including through consultations on accelerating and broadening the scope of tariff elimination and broadening of the scope of commitments on non-tariff measures under this Agreement and other issues as appropriate; and
(b) addressing tariff and non-tariff measures to trade in goods between the Parties and, if appropriate, referring such matters to the Trade Committee for its consideration,
in so far as these tasks have not been entrusted to the relevant Working Groups established pursuant to Article 15.3.1 (Working Groups).
Article 2.17. Special Provisions on Administrative Cooperation
1. The Parties agree that administrative cooperation is essential for the implementation and the control of preferential tariff treatment granted under this Chapter and underline their commitments to combat irregularities and fraud in customs and related matters.
2. Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or irregularities or fraud, on the request of that Party, the Customs Committee shall meet within 20 days of such request to seek, as a matter of urgency, to resolve the situation. The consultations held within the framework of the Customs Committee will be considered as fulfilling the same function as consultation under Article 14.3 (Consultations).
Chapter THREE. TRADE REMEDIES
Section A. BILATERAL SAFEGUARD MEASURES
Article 3.1. Application of a Bilateral Safeguard Measure
1. If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section.
2. The importing Party may take a bilateral safeguard measure which:
(a) suspends further reduction of the rate of customs duty on the good concerned provided for under this Agreement; or
(b) increases the rate of customs duty on the good to a level which does not exceed the lesser of:
(i) the MFN applied rate of customs duty on the good in effect at the time the measure is taken; or
(ii) the base rate of customs duty specified in the Schedules included in Annex 2-A (Elimination of Customs Duties) pursuant to Article 2.5.2 (Elimination of Customs Duties).
Article 3.2. Conditions and Limitations
1. A Party shall notify the other Party in writing of the initiation of an investigation described in paragraph 2 and consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to reviewing the information arising from the investigation and exchanging views on the measure.
2. A Party shall apply a bilateral safeguard measure only following an investigation by its competent authorities in accordance with Articles 3 and 4.2(c) of the Agreement on Safeguards contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Agreement on Safeguards") and to this end, Articles 3 and 4.2(c) of the Agreement on Safeguards are incorporated into and made part of this Agreement, mutatis mutandis.
3. In the investigation described in paragraph 2, the Party shall comply with the requirements of Article 4.2(a) of the Agreement on Safeguards and to this end, Article 4.2(a) of the Agreement on Safeguards is incorporated into and made part of this Agreement, mutatis mutandis.
4. Each Party shall ensure that its competent authorities complete any such investigation within one year of its date of initiation.
5. Neither Party may apply a bilateral safeguard measure:
(a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;
(b) for a period exceeding two years, except that the period may be extended by up to two years if the competent authorities of the importing Party determine, in conformity with the procedures specified in this Article, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, shall not exceed four years; or
(c) beyond the expiration of the transition period, except with the consent of the other Party.
6. When a Party terminates a bilateral safeguard measure, the rate of customs duty shall be the rate that, according to its Schedule included in Annex 2-A (Elimination of Customs Duties), would have been in effect but for the measure.
Article 3.3. Provisional Measures
In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of Articles 3.2.2 and 3.2.3. The Party shall promptly refund any tariff increases if the investigation described in Article 3.2.2 does not result in a finding that the requirements of Article 3.1 are met. The duration of any provisional measure shall be counted as part of the period prescribed by Article 3.2.5(b).
Article 3.4. Compensation
1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. The Party shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure.
2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days after the consultations begin, the Party whose goods are subject to the safeguard measure may suspend the application of substantially equivalent concessions to the Party applying the safeguard measure.
3. The right of suspension referred to in paragraph 2 shall not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.
Article 3.5. Definitions
For the purposes of this Section:
serious injury and threat of serious injury shall be understood in accordance with Article 4.1(a) and (b) of the Agreement on Safeguards. To this end, Article 4.1(a) and (b) is incorporated into and made part of this Agreement, mutatis mutandis; and
transition period means a period for a good from the date of entry into force of this Agreement until 10 years from the date of completion of tariff reduction or elimination as set out in Annex 2-A as the case may be for each good.
Section B. AGRICULTURAL SAFEGUARD MEASURES
Article 3.6. Agricultural Safeguard Measures
1. A Party may apply a measure in the form of a higher import duty on an originating agricultural good listed in its Schedule included in Annex 3, consistent with paragraphs 2 through 8, if the aggregate volume of imports of that good in any year exceeds a trigger level as set out in its Schedule included in Annex 3.
2. The duty under paragraph 1 shall not exceed the lesser of the prevailing MFN applied rate, or the MFN applied rate of duty in effect on the day immediately preceding 1 July 2011, or the tariff rate set out in the Party's Schedule included in Annex 3.
3. The duties each Party applies under paragraph 1 shall be set according to its Schedules included in Annex 3.
4. Neither Party may apply or maintain an agricultural safeguard measure under this Article and at the same time apply or maintain with respect to the same good:
(a) a bilateral safeguard measure in accordance with Article 3.1;
(b) a measure under Article XIX of GATT 1994 and the Agreement on Safeguards; or