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Complaint by the United States.
On 16 February 1999, the US requested consultations
with Korea in respect of certain procurement practices of the Korean
Airport Construction Authority (KOACA), and other entities concerned with
the procurement of airport construction in Korea. The US claimed that such
practices were inconsistent with Korea’s obligations under the Agreement
on Government Procurement (GPA). These include practices relating to
qualification for bidding as a prime contractor, domestic partnering, and
the absence of access to challenge procedures that are in breach of the
GPA. The US contended that KOACA and the other entities are within the
scope of Korea’s list of central government entities as specified in Annex
1 of Korea’s obligations in Appendix I of the GPA, and pursuant to Article
I(1) of the GPA, apply to the procurement of airport construction.
On 11 May 1999, the US requested the establishment of a
panel. At its meeting on 26 May 1999, the DSB deferred the establishment
of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel by the US,
the DSB established a panel at its meeting on 16 June 1999. The EC and
Japan reserved their third party rights. On 30 August 1999, the Panel was
composed. The report of the panel was circulated to Members on 1 May 2000.
The panel found that:
the entities conducting procurement for the project at
issue were not covered entities under Korea’s Appendix I of the GPA and
were not otherwise covered by Korea’s obligations under the GPA.
based on less than complete Korean answers to certain
US questions during negotiations for Korea’s accession to the GPA, there
had initially been an error on the part of the US as to which Korean
authority was in charge of the project at issue. However, in light of all
the facts the panel considered that there was notice of the error and the
US should at least have conducted further inquiries in this regard before
the negotiations were ended.
the US had not demonstrated that benefits reasonably
expected to accrue under the GPA, or in the negotiations resulting in
Korea’s accession to the GPA, were nullified or impaired by measures taken
by Korea (whether or not in conflict with the provisions of the GPA),
within the meaning of Article XXII:2 of the GPA.
The DSB adopted the Panel Report at its meeting on 19 June 2000.
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