The document discusses several topics related to international trade agreements: 1. It discusses the inclusion of services and investment provisions in Free Trade Agreements (FTAs), noting different approaches used. 2. It examines requirements for FTAs to be legally compatible with the World Trade Organization (WTO) rules to protect most favored nation treatment and reduce trade distortions. 3. It describes the relationship between WTO agreements and FTAs, noting there is no hierarchy but also no exception from WTO most favored nation rules if an FTA is inconsistent.

1. Kementerian Perindustrian
22 Mei 2015

2.  FTA Competition in theWorldTrading System
 Services and Investment in FTAs
 Intellectual Property Protection in FTA

3.  GATT (General Agreement onTariff andTrade)
- 1948 –1994: Only dealt with trade of goods
- Conducted 8 rounds of multilateral trade negotiations
- Members: 128 countries
 WTO (WorldTrade Organization)
- Established in1995: Deals with trade of goods, services and
trade-related intellectual property rights
- Launched its first multilateral trade negotiations called “Doha
Development Round” in 2001
- Members: 160 countries

4.  Doha Round: 13 yrs have passed without results
- Expectations of gains are different between emerging developing
nations and advanced nations
- Developing and least developed nations are frustrated since
development
issues are not properly dealt with
- Proliferation of regionalism (FTAs and RTAs)
- Lack of political leadership from advanced nations: world economic
recession
- Lack of willingness to make concessions by large emerging nations
The multilateral trading system is currently in deep
trouble

5.  Bali Package
- Advanced nations and emerging large developing
nations showed their leadership at the MC 9 held in
Bali on
Dec. 3-7, 2013 and finally produced a small but
reasonably
balanced package which includes agreement on
oTrade Facilitation
o Some Agricultural issues:
o Some Development issues to help developing and least
developed
countries

6.  Significance of Bali Package
- Showed to the world that the WTO is alive and can produce
some outcome
- Commitment to the whole Doha Development Round was
reaffirmed
- If the agreement is properly implemented, it is estimated to
create US$ 1 trillion worth of economic benefits to the world
economy
o It will also add 21 million new jobs and lower the transaction cost
of
international trade by 10-15 %

7.  WTO still faces serious difficulties despite the
success achieved at the Bali MC9 last December
-The implementation of theTrade Facilitation Agreement (TFA) has been
delayed
since India blocked the adoption of the legal document of theTFA last year
- How to make developing countries effectively implement the trade
facilitation
measures still remains a fundamental question
- Preparing the work program on the remaining DDA issues seems extremely
difficult due to stark differences in positions among major participants

8.  Relevant parties will make efforts to conclude the
ongoing plurilateral negotiationsTrade in
Services Agreement (TISA)
- 24 countries (70% of world trade in services)
Document only for participant only
 Focus on Licensing, financial services, telecoms,
e-commerce, maritime transport, and
professionals moving abroad temporarily to
provide services.

9.  Since the early failure of the Doha Round, the
pendulum has moved rapidly towards a bilateral FTA-
based regionalism
- More than 370 FTAs are in force
 Recently, there is a trend emerged of forming RTAs
with a participation of multiple countries (Mega-RTAs)
- China-Japan-Korea (CJK) FTA , ASEAN + 6 (RCEP) FTA
Trans-Pacific Partnership (TPP),Trans-AtlanticTrade and Investment
Partnership (TTIP)

10.  Korea-China FTA: Started on May, 2012 and
negotiations have been virtually concluded and in
the final signing stage
 China-Japan-Korea (CJK) FTA: Started in November
2012 and negotiations moves rather slowly
 The RCEP (Regional Comprehensive Economic
Partnership)
Agreement : Started in November 2012 and
negotiations moves slowly
- ASEAN 10 countries plus 6 (China, Japan, Korea, India, Australia, NZ)
- Ministers agreed to complete the RCEP by 2015

11.  TPP (Trans-Pacific Partnership) Agreement:
Started in 2008 and currently 12 countries are
negotiating
- P4 (Chile, NZ, Singapore, Brunei), U.S., Australia,Vietnam, Peru,
Malaysia,
Canada, Mexico, Japan
-Tried to complete the negotiations in December 2013 but failed
- Could be concluded within the first half of 2015
 Recently, Korea showed its interest in joining theTPP
and started its bilateral consultations
 The US and the EU started the TTIP negotiations in 2013
- Making slow progress

12. RCEP : ASEAN+6
(ASEAN)
TPPKorea
China
Japan
Malaysia
Vietnam
Singapore
Brunei
Myanmar
Laos
Cambodia
Thailand
Philippine
s
Indonesia
India
Chile
Peru
USA
Mexico
Canada
Australia
New
Zealand
C-J-K
Trade Integrations in Asia-Pacific

15. Trade Volume (2013) Population (2013) GDP (2013)
Billion
USD
% in Total Million % in Total
Billion
USD
% in Total
Korea-China-
Japan
6,780 18.4 1,538 21.6 15,446 20.4
RCEP 10,672 29.0 3,434 48.2 21,418 28.3
TPP 9,484 25.8 798 11.2 27,808 36.8
APEC 18,107 49.2 2,804 39.4 42,741 56.5
EU 11,631 31.6 506 7.1 17,958 23.8
TTIP 15,479 42.0 823 11.6 34,758 46.0

16.  Various forms of Mega-RTA negotiations are
expected to simultaneously progress for the time
being
 At the moment, the “Trans-pacific approach” is
expected to move faster than the “EastAsian
approach”
- Experts predict that theTPP negotiations could be concluded in the
first half of this year
 However, scopes and depths of these trade
integrations may differ quite substantially from one
another

17.  One important issue to be noted is on the
relationship between the two very large
trading nations in the world, the US and
China
 This circumstance may potentially cause
serious conflicts in the world trading
environment, especially at theWTO

18. Introduction
(1) Inclusion of services in FTAs
• improving access to foreign markets
• developing and establishing international rules on trade in services
(2) Requirements which FTAs meet with for legal compatibility withWTO
• to protect MFN
• to reduce trade-distortive effects of FTAs
(3) Relationship b/w WTO agreements & FTAs
• no hierarchy b/w multilateral agreements and bilateral agreements
•WTO agreements have no legal supremacy over FTAs
• no effect ofWTO inconsistency on existence & validity of FTAs
• if inconsistent, no exception from MFN

19. • Practices in the past
- liberalization of ServiceTrade: WTO GATS, FTAs & domestic
laws
- liberalization of Investment in Manufacturing Industry:
domestic laws
- protection of foreign investor & investment
• Current Practices in FTAs
- liberalization of ServiceTrade + protection of foreign investor
& investment
- liberalization of supply is liberalization of investment in service
industries 20

20. Service & Investment in FTAs
• Ways of Concession
21
Approach Principle Reservation
Negative-List
Approach
In principle.
Liberalization in all
sectors/items
The uncommitted
sectors/items are
listed
Positive-List
Approach
Only the committed
sectors/items are listed
No commitments in
unlisted sectors/items

21. Investment in FTAs
NATIONALTREATMENT [KORUS]
1. Each Party shall accord to investors of the other Party treatment no less
favorable than that it accords, in like circumstances, to its own investors with
respect to the establishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favorable
than that it accords, in like circumstances, to investments in its territory of its
own investors with respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition of
investments.
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22. Investment in FTAs
Korea reserves the right to adopt or maintain any measure that accords differential
treatment to countries under any bilateral or multilateral international agreement in
force or signed prior to the date of entry into force of this Agreement.
• “so called” future MFN
- Benefits that KOR is willing to give are already reflected
- Restrict MFN not to extend preferential treatment, which a party does not want to
give
- concern over imbalance of interests may frustrate future liberalization
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23. Investment in FTAs
EXPROPRIATION AND COMPENSATION [KOR-ASEAN]
1. A Party shall not nationalise or expropriate covered investments of an investor of
any other Party, either directly or through measures equivalent to expropriation or
nationalisation (referred hereto as “expropriation”), except:
(a) for public purpose;
(b) in accordance with due process of law;
(c) on a non-discriminatory basis; and
(d) upon payment of prompt, adequate and effective compensation.
• no specific provisions regarding requirements for indirect expropriation
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25. 
Evolution of IP in Trade

26. Some members of the
IP family
 Copyright
 Trademark
 Patent
 Industrial Design
 Trade Secret
 Circuit Layout Design
 Geographical Indication
 Appellation of Origin
 Protection Against Unfair
 Competition
 Database right
 Plant Varieties
 Artists’ Resale Right
 Traditional Knowledge
 Traditional Cultural
 Expression.

27. Why IP and Trade?
 Technological advancement
 Globalization
 Growing awareness of IP as asset
 Problems with existing international
institutions regarding IP
IP = $$$