Concluding remarks by the Chairperson

The fifth Trade Policy Review of Korea has given us a much clearer understanding of Korea's trade policies and practices and of the challenges that it faces. I thank Mr.Ahn Ho-young, Deputy Trade Minister of the Ministry of Foreign Affairs and Trade, and his delegation as well as the Discussant, Ambassador Bozkurt Aran of Turkey, and Members of the TPRB for contributing to our informative and constructive exchange of views during these two days. Korea's response to the large number of questions is also very much appreciated.

Members commended Korea for its prudent macroeconomic policies and structural reforms, including its continuing pursuit of open trade and investment policies, which have contributed to it becoming a more outward-oriented economy enjoying stable growth, declining unemployment, increasing per capita incomes and contained inflation. In the midst of the present financial upheaval, several Members recalled Korea's recovery from the Asian Financial Crisis through increased liberalization (rather than protectionism), an important lesson in today's global economic environment.

Several members noted that inward FDI had declined as a proportion of GDP and is low by industrialized country standards. They encouraged Korea to further liberalise its foreign investment regime and continue structural reforms, especially involving deregulation and privatization. Members welcomed measures taken to create a business friendly environment, including the creation of the Presidential Council on National Competitiveness.

Members praised Korea's active and constructive participation in the Doha Round. At the same time, some Members urged Korea to ensure that its regional trade agreements were complementary to the multilateral trading system. Members also acknowledged Korea's support for the WTO's technical assistance activities.

Korea was commended for its streamlined customs procedures. Members noted that the tariff remains relatively high, given Korea's level of development, and somewhat complex, involving a multiplicity of rates. Members were concerned that Korea's flexible tariff mechanism allowed discretionary changes in certain rates. Members also remarked that the average applied MFN tariff for agricultural products is more that eight times higher than the tariff for non-agricultural products. They encouraged Korea to step up agricultural reforms and thus reduce distortions in both production and trade of agricultural goods. Members also expressed concern about several aspects of Korea's agricultural tariff rate quota system, which are under-utilised even for commodities for which domestic Korean prices are significantly higher than world levels. Members urged Korea to make improvements in these and other areas so as to make its trade regime more transparent and predictable.

Some members were concerned about Korea's recourse to anti-dumping actions and to changes in its calculation of dumping margins. Certain Members sought clarifications on some aspects of technical standards and SPS practices. Some Members noted Korea's further strengthening of intellectual property rights and expressed interest in other related developments.

Some Members noted the high degree of government intervention in agriculture and expressed concern regarding subsidies to the fisheries sector. Other Members wondered about the ways for enhancing competitiveness of the services sector, whose labour productivity was half that of manufacturing. In addition, certain Members raised questions over the lack of foreign participation in telecoms and broadcasting as well as plans for market opening with regard to professional services.

To conclude, I would again like to thank Korea's delegation for enabling us to understand better its trade and trade-related policies and the domestic and international contexts in which they are formulated and implemented. I would also like to thank the Discussant for his insightful comments, and Members for contributing to what has been a very enlightening two days of discussions. We look forward to receiving responses to the remaining outstanding questions within the next month.