CYIL 2012

EDITA ŠEDOVÁ ȃ DAVID MÜLLER CYIL 3 ȍ2012Ȏ significant commercial interest to European suppliers, which are recognised global leaders in this area. Guaranteeing the practical and legal accessibility of such tenders to European suppliers will secure substantial new opportunities. 29 These provisions relate to procurement contracted by entities at central and sub-central levels covered by GPA commitments, and further to this, BOT contracts of all local governments located in Seoul City, Busan City, Incheon City and Gyonggi-do. 30 This additional coverage represents over 50% of South Korea’s GDP and population. 31 3.6 Other essential elements As the anti-competitive practices and subsidies to local companies could have serious distortive effect on generally positive impacts of trade liberalisation, the FTA contains specific provisions on competition . The main aspect is prohibition of certain types of subsidies which adversely affect international trade, in particular subsidies covering debts or liabilities without any limitation in law or in fact as to their amount or duration and subsidies to insolvent or ailing enterprises without a credible restructuring plan. 32 These provisions apply to subsidies in goods with the exception of fisheries subsidies. Concerning subsidies in services, the FTA contains a “rendez-vous clause”, which commits both parties to discuss this issue within three years. Another significant element related to subsidies is incorporation of transparency provisions, such as an obligation to report on the total amount, types and the sectoral distribution of subsidies and provide further information upon request on any subsidy schemes and individual subsidies. The FTA establishes a framework for cooperation on trade and sustainable development . It includes firm commitments by both sides to labour and environmental standards. The agreement also sets up structures to implement and monitor the commitments between the parties through the civil society involvement. 33 The FTA also tackles the concerns of possible negative impacts of the liberalisation and introduces a bilateral safeguard clause , which in case of serious injury to domestic industry provides a possibility to temporarily reintroduce the duties. For agricultural goods the agricultural safeguard measures based on WTO legislation applies. In addition the FTA incorporates a special clause on duty drawback, which should protect European manufacturers against significant increase in foreign 29 European Commission, The EU-Korea Free Trade Agreement in Practice, p. 16, . 30 Text of FTA EU Korea, Annex 9, Art 3 (3), . 31 European Commission, EU-South Korea Free Trade Agreement: A quick reading guide, p. 8, . 32 Text of FTA EU Korea, Art 11.11, . 33 European Commission, EU-South Korea FTA, 10 Key Benefits for the EU, .

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