Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA
Preamble
The Government of the People's Republic of China ("China") and the Government of the Republic of Korea ("Korea"), hereinafter referred to as "the Parties";
RECOGNISING their longstanding friendship and strong economic and trade relationship and desiring to strengthen their strategic cooperative partnership;
CONVINCED that a free trade area will create an expanded and stable market for goods and services and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
SHARING the belief that a free trade agreement shall produce mutual benefits to each Party and contribute to the expansion and development of international trade;
ESTABLISHING clear and mutually advantageous rules governing their trade;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare of the Parties by expanding trade and investment between the Parties;
MINDFUL that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development and that closer economic partnership can play an important role in promoting sustainable development; and
SEEKING to facilitate and enhance regional economic cooperation and integration;
HAVE AGREED as follows:
Body
Chapter 1. Initial Provisions and Definitions
Section A. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area.
Article 1.2. Objectives
The Parties conclude this Agreement, among others, for the purposes of:
(a) encouraging expansion and diversification of trade between the Parties;
(b) eliminating the barriers to trade in, and facilitating the cross-border movement of, goods and services between the Parties;
(c) promoting fair competition in the Parties' markets;
(d) creating new employment opportunities; and
(e) creating a framework for furthering bilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.
Article 1.3. Relation to other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other existing agreements to which both Parties are party.
Article 1.4. Extent of Obligations
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement in their respective territories, including ensuring that their respective local governments observe all obligations and commitments under this Agreement.
Article 1.5. Territorial Application
1. With regard to China, this Agreement shall apply to the entire customs territory of China, including land, internal waters, territorial sea and air space, and any area beyond its territorial sea within which it may exercise sovereign rights or jurisdiction in accordance with international law and its domestic law; and
2. With regard to Korea, this Agreement shall apply to the land, maritime, and air space over which Korea exercises sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its domestic law.
Section B. Definitions
Article 1.6. Definitions
For the purposes of this Agreement, unless otherwise specified:
Anti-Dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariff and Trade 1994, which is part of the WTO Agreement;
customs authorities means:
(a) for China, the General Administration of Customs of the People's Republic of China or its successor; and
(b) for Korea, the Ministry of Strategy and Finance and the Korea Customs Service, or their respective successors;
customs duties includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation (1), but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994, in respect of like, directly competitive, or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) duty imposed pursuant to a Party's law consistentlywith Chapter 7 (Trade Remedies);
(c) fee or other charge in connection with importation commensurate with the cost of services rendered;
(d) premiums offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions or tariff rate quotas; and
(e) duty imposed pursuant to any agricultural safeguard measure (2) taken under the Agreement on Agriculture, which is part of the WTO Agreement;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the GATT 1994, which is part of the WTO Agreement;
days means calendar days;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
goods of a Party means domestic products as these are understood in GATT 1994 or such goods as the Parties may agree and includes originating goods of that Party;
Import Licensing Agreement means the Agreement on Import Licensing Procedures, which is part of the WTO Agreement;
Joint Commission means the Joint Commission established under Article 19.1 (Joint Commission);
measure includes any law, regulation, procedure, requirement or practice;
originating means qualifying under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Implementation Procedures);
person means a natural person or a juridical person, or any other entity established in accordance with domestic law;
Safeguard Agreement means the Agreement on Safeguards, which is part of the WTO Agreement;
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, which is part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Chapter 2. National Treatment and Market Access for Goods
Section A. Common Provisions
Article 2.1. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Article 2.2. Definitions
For the purposes of this Chapter:
consumed means
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in the value, form, or use of the good or in the production of another good;
distributor means a person of a Party who is responsible for the commercial distribution, agency, concession, or representation in the territory of that Party of goods of the other Party;
duty-free means free of customs duty;
goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;
goods temporarily admitted for sports purposes means sports requisites for use in sports contests, demonstrations, or training in the territory of the Party into whose territory such goods are admitted;
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party; and
performance requirement means a requirement that:
(a) a given level or percentage of goods or services be exported;
(b) domestic goods or services of the Party granting a waiver of customs duties or an import license be substituted for imported goods;
(c) a person benefiting from a waiver of customs duties or an import license purchase other goods or services in the territory of the Party granting the waiver of customs duties or the import license, or accord a preference to domestically produced goods;
(d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or
(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows; but does not include a requirement that an imported good be:
(f) subsequently exported; (g) used as a material in the production of another good that is subsequently exported;
(h) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
(i) substituted by an identical or similar good that is subsequently exported.
Section B. National Treatment
Article 2.3. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Section C. Reduction or Elimination of Customs Duties
Article 2.4. Reduction or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, each Party shall progressively reduce or eliminate its customs duties on originating goods of the other Party in accordance with its Schedule to Annex 2-A.
2. On the request of either Party, the Parties shall consult to consider possibility of accelerating the reduction or elimination of customs duties set out in their Schedules to Annex 2-A. An agreement by the Parties to accelerate the reduction or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules to Annex 2-A for that good when approved by each Party in accordance with its applicable legal procedures.
3. A Party may unilaterally accelerate the reduction or elimination of customs duties set out in its Schedule to Annex 2-A at any time if it so wishes. A Party shall notify the other Party through a diplomatic note immediately after completion of the internal procedures required for the amendments to enter into force. Such amendments shall enter into force on the date specified in the diplomatic note, or in any event, within 90 days of such notification. Any concessions granted by the Party according to the unilateral acceleration set out therein shall not be withdrawn.
4. If at any moment a Party reduces its applied most-favored-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 to Annex 2-A.
Article 2.5. Standstill
Except as otherwise provided in this Agreement, 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 a Party may:
(a) raise a customs duty that was unilaterally reduced other than as provided for in Article 2.4.2 or 2.4.3 to the lower of the levels established either:
(i) in its Schedule to Annex 2-A; or
(ii) pursuant to Articles 2.4.2 or 2.4.3; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
Section D. Special Regimes
Article 2.6. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, such as equipment used for scientific research, pedagogical or medical activities, the press or television and cinematographic purposes, necessary for a person who qualifies for temporary entry pursuant to the laws of the importing Party;
(b) goods intended for display or demonstration at exhibitions, fairs, meetings, or similar events;
(c) commercial samples; and
(d) goods admitted for sports purposes.
2. Each Party shall, on the request of the person concerned and for reasons its customs administration considers valid, extend the time limit for temporary admission beyond the period initially fixed in accordance with its domestic law.
3. Neither Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good:
(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of the business activity, trade, profession, or sport of that person;
(b) not be sold or leased while in its territory;
(c) be accompanied by the deposit of a bond or security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or within 6 months, unless extended;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) be otherwise admissible into the Party's territory under its domestic law.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.
5. Each Party shall permit a good temporarily admitted under this Article to be re-exported through a customs port other than that through which it was admitted.
6. Each Party shall provide that its customs administration or other competent authority shall relieve the importer or another person responsible for a good admitted under this Article from any liability for failure to re-export the good on presentation of proof to the satisfaction of the customs administration of the importing Party that the good has been destroyed by reason of force majeure.
Article 2.7. Duty-free Entry of No Commercial Value Articles That Are for Advertising Purposes or to Be Used as Samples
Each Party shall grant duty-free entry to no commercial value articles that are for advertising purposes or to be used as samples in accordance with its laws and regulations.
Section E. Non-Tariff Measures (3)
Article 2.8. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes, and to this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Where a Party proposes to adopt an export prohibition or restriction on energy and mineral resources in accordance with paragraph 2(a) of Article XI of GATT 1994, the Party shall provide notice in writing, as far in advance as practicable, to the other Party of such proposed prohibition or restriction and its reasons together with its nature and expected duration.
3. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the Anti-Dumping Agreement.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, no provision of this Agreement shall be construed to prevent the Party from:
(a) limiting or prohibiting the importation of the good of the non-Party from the territory of the other Party; or
(b) requiring as a condition for exporting the good of the Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on the request of either Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in the territory of the other Party.
6. Neither Party may, as a condition for engaging in importation or for the importation of a good, require a person of the other Party to establish or maintain a contractual or other relationship with a distributor in its territory.
7. For greater certainty, paragraph 6 does not prevent a Party from requiring a person referred to in that paragraph to designate an agent for the purpose of facilitating communications between its regulatory authorities and that person.
Article 2.9. Import Licensing
1. Neither Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.(4)
2. (a) Promptly after this Agreement enters into force, each Party shall notify the other Party of its existing import licensing procedures, if any. The notification shall:
(i) include the information specified in Article 5 of the Import Licensing Agreement; and
(ii) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
(b) Before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government Internet site. To the extent possible, the Party shall do so at least 30 days before the new procedure or modification takes effect.
3. Neither Party may apply an import licensing procedure to a good of the other Party unless the Party has complied with the requirements of paragraph 2 with respect to that procedure.
Article 2.10. Administrative Fees and Formalities
1. Each Party shall ensure that all fees and charges imposed in connection with importation and exportation shall be consistent with their obligations under Article VIII:1 of GATT 1994 and its interpretative notes, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.