Seoul, Korea – The Office of the U.S. Trade Representative (USTR) today led formal consultations with the Republic of Korea under the chapter on Competition-Related Matters (Chapter 16) of the United States-Republic of Korea Free Trade Agreement (KORUS). The United States is calling for actions by Korea to improve procedures in competition hearings held by the Korea Fair Trade Commission (KFTC). These shortcomings have denied U.S. parties certain rights, including the opportunity to review and rebut the evidence against them.
At issue is Korea’s non-compliance with KORUS Article 16.1.3, which states, in relevant part, that a party in an administrative hearing related to competition must “have a reasonable opportunity to... review and rebut the evidence and any other collected information on which the determination may be based.” Following extensive efforts to resolve this concern, USTR requested formal consultations in March of 2019.
Michael Beeman, Assistant U.S. Trade Representative for Japan, Korea and APEC led the consultation and called for immediate action by Korea to come into compliance with KORUS. Currently pending amendments to Korea's "Monopoly Regulations and Fair Trade Act" fail to address U.S. concerns that KFTC hearings continue to deny U.S. firms due process rights under the KORUS agreement that are necessary to secure a fair competition hearing in Korea.
The United States has been raising, including through multiple meetings, letters and formal comments, concerns with restrictive KFTC hearing procedures regarding a respondent’s lack of access to evidence, including evidence used to bring allegations against it. However, the Korean Government’s proposed changes to access to evidence procedures in KFTC hearings, reflected in draft amendments to the “Monopoly Regulations and Fair Trade Act,” do not rectify the problem, address the United States’ concerns, or comply with KORUS obligations. USTR seeks changes from Korea necessary to meet the KORUS obligation while protecting business confidential information and other appropriate materials from disclosure to third parties.
Click here for further information in the March 15, 2019, USTR request calling for consultations under the KORUS Competition Chapter.