WASHINGTON (Reuters) - The Trump administration has requested consultations with South Korea under the two nations' free trade pact to try to resolve U.S. concerns about procedures in competition hearings held by a South Korean trade commission.
"Some of these hearings have denied U.S. parties certain rights, including the opportunity to review and rebut the evidence against them," the Office of the U.S. Trade Representative said in a statement. "Denial of this fundamental right undermines their ability to defend themselves."
The Korea Fair Trade Commission (KFTC) in December 2016 fined U.S. mobile chipmaker Qualcomm (NASDAQ:QCOM) Inc over $900 million for what it called unfair business practices in patent licensing and modem chip sales. The company has contested the ruling, but a USTR spokeswoman could not be immediately reached for comment on whether this case influenced the consultation request.
The United States and South Korea last year renegotiated some aspects of the U.S.-South Korea Free Trade Agreement (KORUS) to address U.S. complaints about the trade deal that was first implemented in 2012. But these changes were largely focused on the automotive sector to protect the U.S. truck market and provide U.S. automakers greater access to the South Korean market.
USTR said it was requesting consultations at this time because recently drafted amendments to Korea’s “Monopoly Regulations and Fair Trade Act” fail to address Washington's concerns that KFTC hearings continue to deny U.S. companies due process rights under the KORUS agreement.
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