This paper is a survey of existing literature on privatization methods, techniques and related issues. The paper especially relates these issues to foreign direct investment in privatization, which has received much attention under the current administration in Korea. The main purpose of the study is to survey and discuss existing literature and point to future directions in research rather than analysing specific privatization cases or recommending solutions for any particular privatization problems.

The paper first considers trends and role of foreign direct investment in privatization worldwide, and then goes on to discuss various privatization methods and techniques, as well as real world examples of their use. In particular, the paper contains a case study of the British privatization experience of the electricity industry, focusing on the international offers.

This study finds that the British case holds many valuable lessons for Korean practitioners and policy makers. Most importantly, the effective use of financial institutions and the various ways in which competitive pressure has been built up between domestic, foreign and institutional investors suggest how Korea might adopt similar techniques to lower privatization costs and overcome its limited stock market size, while at the same time, prevent monopolistic takeover of state-owned enterprises by a few large conglomerates. This is especially important given that these factors (stock market conditions and fear of chaebol domination) have posed major obstacles to privatization on a fuller scale in Korea. For too long, the Korean debate on privatization has been dominated by identifying what the obstacles are, rather than identifying what methods might be adopted to overcome such obstacles.

This paper argues that it is now time to move on. Further, the paper argues that there is a need for greater research to take place in the area of auctions and competitive bids concerning privatization related issues. While these can be efficient ways for privatizing state-owned enterprises, because of their complexity and the lack of markets for firms in Korea, these methods have only been used recently and only in very crude forms.

Attracting Foreign Direct Investment (FDI) is one of the most promosing methods through which Korea can overcome its economic crisis and implement successful restructuring.

However, todays, Korea is far behind neighboring countries in attracting FDI. The main reason is that. In order to attract FDI, generally, we need the promotional techniques and structure called Investor Relations Management System. Promotional techniques consist of providing information to potential investors, creating an attractive image of the country as a place to invest, and providing services to prospective investors. However, Korea lacks sufficient knowhow and experience in this field. So, it is essential to investigate and learn from other countries' experiences. IBB(United Kingdom), EDB(Singapore), MIDA(Malaysia) are known as the most successful cases in attracting FDI, and for that reason are included in the sample countries for this study.

The common features of these cases are summarized as follows. Promotional activities are designed to accomplish three different objectives. 1) Image Building Activities - to improve a country's image within the investment community as a favorable location for investment 2) Investment service activities - to generate investment directly 3) Investment service activities - to provide services to prospective and current investors. More specifically, investment promotion includes the following types of activities: advertising, direct mailing, investment seminars, investment missions, participation in trade shows and exhibitions, distribution of literature, one-to-one direct marketing efforts, preparation of itineraries for visits of prospective investors, matching prospective investors with local partners, acquiring permits and approval from various government departments, preparing project proposals, conducting feasibility studies, and providing services to the investor after projects have become operational. All of these are elements of One Stop Services. Those countries have powerful and effective One Stop Service agencies.

Despite the disintegration of the former Eastern Block and the termination of the Committee for Mutual Economic Assistance (CMEA), much activity of regional economic cooperation and integration has taken place in central and eastern Europe in the past ten years. The Central European Free Trade Area (CEFTA), organized by central and eastern European countries, and the Commonwealth of Independent States (CIS), established by the former Soviet states, are currently the largest and most influential units of regional economic cooperation and integration in the region. Another strong force affecting the pattern of economic integration in this region are the attempts of many local nations to join the European Union (EU). CEFTA, which was the first regional economic cooperation unit in central Europe, was established by Poland, Hungary, the Czech Republic, and Slovakia in late 1992. Recently, it has been enlarged to include Slovenia, Romania, and Bulgaria and in the process has become increasingly important to regional commerce. CEFTA targets not only a deepening of trade relations between member states but also exists to augment joint strategies of members in joining the EU. Member states of CEFTA have been trying to advance the time schedule for free trade in successive meetings following CEFTA establishment. They were successful in abolishing most import tariffs on industrial goods in 1997; while tariffs on so-called "sensitive goods" (automobile, fiber, agricultural products etc.) are planned to be completely abolished in 2000 or 2001. Intra-CEFTA trade has increased steadily since the institution's establishment, and further enlargement of CEFTA to include the Baltic States is currently being discussed. In spite of the success, there remain concerns regarding the future of CEFTA. Much concern centers on the differing opinions concerning the political role of CEFTA. Many also question the importance of CEFTA in light of the fact that its members hope to join the EU within the next ten years. The members overriding interest in joining the EU is easy to understand. EU member status would assure the countries of central and eastern Europe full access to a vast export market where they would enjoy numerous comparative advantages and could direct financial support, all of which would aid their economic efforts greatly. The general position of the EU regarding central and eastern European membership has been basically welcoming as most members desire the EU to embrace all of Europe and also want to expand their dominant position in advancing into central and eastern Europe. So far, ten central and eastern European countries have officially applied for EU membership. In early 1998, a first round of official negotiations were held between the EU commission and the five leading eastern European candidates for admission; further rounds expected to follow soon. If the negotiations proceed smoothly, the five candidate countries may join the EU as early as 2003. However, there are formidable obstacles before such entry may be realized. First of all, the EU must reform its current budgetary operations and decision making system in order to accomodate the new members; yet, there exists a wide gap in opinion among EU member countries on what reforms are needed. The central European candidates must also enact major changes in their systems and policies, such as altering import tariffs and financial and agricultural sector policies, and do so in a short period of time before they can join the EU. The CIS is an attempt to re-establish the relations of economic cooperation among the countries of the former Soviet Union. The CIS started with the goal of establishing not only a collective security system, but also a common market similar to that of the EU among member states. However, the actual results have so far fallen very short of this goal. A major obstacle is the fact that many CIS members fear a resumption of Russian hegemony. Among CIS member nations, the agreement on free trade and customs union between Russia, Beloruss, Kazakhstan, and Kirgisstan is about the only tangible sign of real progress of CIS regional integration. As Russia remains, both economically and politically, the dominant power among CIS members, economic integration within the CIS is unthinkable without Russia's initiative. Thus, the future prospects of the CIS will largely revolve around the state of Russia's recovery from its currently severe economic and political disorder. Of particular importance is that the lack of Russian recovery will likely result in increased interest in the Islamic CIS countries in cooperating more closely with neighboring Islamic countries, such as Turkey and Pakistan. New formations of regional economic cooperation and integration among the countries of central and eastern European and the countries of the former Soviet Union are not only causing changes in their external relations, but also inducing transitions in their internal economic systems and institutions. Therefore, understanding these new trends is essential in trying to understand the process of economic transformation of these countries. It is important to recognize that changes in economic cooperation relations in this region are closely related with the changes in the whole of Europe, with the EU playing the central role. In addition to accepting new members early in the new millenium, the EU is also expected to conclude agreements on free trade or customs union with neighboring countries of the former Soviet Union. Summing up these trends implies pan-European economic integration with the EU at its core. Changes in regional economic cooperation in Europe since the 1990's are full of implications for the globalizing Korean economy. Korea must endeavor to strengthen relations with the most influential EU members in an attempt to assure Korea's interests being taken into account when deciding EU affairs. Korea should also target increased direct investment in those central and eastern European countries expected to become EU members. These eastern European countries, in which production costs remain much lower than in EU member countries, could serve as beachheads from which Korea might access the vast EU market. In operating in the markets of CIS countries, Korean firms should bear in mind that they remain closely connected with each other, despite the failure to realize further CIS market integration. Using these connections and other bi- and multilateral agreements on free trade and customs unions, will allow Korean firms to open new markets more easily. Lastly, new experiences of economic integration among the countries of central and eastern Europe and the former Soviet Union provide lessons for Korea, which is now trying to establish free trade agreements with other countries. One such lesson that can already be gained from the European experience is that successful economic integration requires members to possess common political and diplomatic interests.

The current corporate restructuring which focuses on the securing sound financial structure of firms is well justified on the ground that the direct cause of the economic crisis of Korea is the currency and financial crisis in 1997. However, from the prospects of real economy and long-term development that the fundamental cause of the economic crisis is the weakened competitiveness as a result of structural weakness of the economy, there is a possibility of a biased restructuring. Further, it is of necessity to minimize a potential conflict between the improvement in the financial efficiency and the loss in the valuable knowledge capital which is a backbone of the knowledge-based economy, a recently adopted national agenda.

In order for the early realization of the timely adopted national agenda of knowledge-based economy, a well designed specific strategy and a careful selection of proper policies and a comprehensive approach rather than spontaneous and fragmented approach are needed. Also needed is the understanding that the transformation into a knowledge-based economy takes a substantially long period to achieve.

From the overview of the current corporate restructuring and the strategy of the knowledge-based economy, national competitiveness of Korea in 1999 is expected to increase in categories of IMD and WEF such as 'domestic economy', 'internationalization (openness)' and 'institutions'. However, it is expected to decrease in 'infra structure', 'management', 'science and technology', and 'human resources (labor)'. In other categories such as 'government' and 'finance', no much change is expected. In the long-term, the national competiveness will be strengthened in categories such as 'domesticeconomy', 'management', 'internationalizationopeness', 'infrastructure' and 'human resources (labor)' more than other categories.

APEC promotes tourism for economic development in Asia-Pacific region. However, APEC member countries have cooperated generally at level. Tourism have some characteristics make cooperation accomplish less realistic than the greater potential. Regional economic development is recognized as one of the most important value of tourism cooperation. But it could not be accomplished its potential until local governments and private sector participate actively.

Cooperation among APEC member countries in tourism sector has revealed that it has been lack of full contents and not economical. As a result, APEC member countries don't take an active interest in the cooperation. Also, cooperation agreement have made very slow progress through periodic meetings. Especially, the influence on the tourism economy of member countries have been impotent in spite of its economic, social, and cultural potentials.

The limitations of central level cooperation in tourism sector may overcome by participation of local governments. First of all, the cooperation among local governments enable to lead the multiplicity of contents by reflection of locality. Secondly, it can lead active participation of the private sector by creation of direct influences on the region. Thirdly, it can make significant effects in short term by flexible agreement process. Fourthly, it can assure the practical cooperation by ensuring personal, financial, and systemic resources on demand as necessary.

In principle, tourism cooperation among local governments of APEC member countries should direct the efficiency and practicality. APEC is in a great need of arrangement of channels for cooperation among local government of member countries. It is useful to establish "APEC Tourism Investment Forum" or "APEC Cooperation Committee of Local Autonomies" which can dealt with Asian financial crisis.

At central level, it is recommended for government to establish "International Tourism Cooperation suport center". This center will support local government by providing knowhow and information and developing training program for international tourism experts as well as trade experts. Especially, financial difficulties of local government could be subsided by existing fund(e.g. Tourism Promotion and Development Fund) or setting up a new fund(e.g. International Cooperation Fund). At regional level, it is recommended for government to supplement tourism cooperation resources such as, finance, manpower, experience, organization, and information and construct mutual supportive cooperation system for themselves.

As a result, local governments will be able to improve the tourism development and management, increase foreign capital introduction, and promote foreign visitors, employment generating and internationalization in their region.

Major Trade-related Issues on Electronic Commerce and Implications for Korea

Since July of 1997 the number of Internet users has more than doubled to over 140 million people worldwide. As a result, electronic commerce has become a major issue on economic policy agendas around the world.
Electronic commerce facilitates trade and lower transaction costs can help firms make use of the opportunities of globalization of production and markets. Electronic commerce has broad implications for future trade.These implications include the effect on trade policy making and enforcement. And it is important to ensure that the present and future trading system de jure and de facto allows electronic commerce to realize its potentials as an alternative or a complement to conventional trade.

The OECD is addressing issues related to electronic commerce through several of its Committees and Working Parties. Issues covered include access, infrastructure needs, taxation, consumer and privacy protection, crytography, authentication and certification of transactions. The OECD Trade Committee has included the trade policy aspects of electronic commerce in its agenda from early 1997.

This Committee is analyzing several trade policy aspects of electronic commerce with a view to complementing and supporting the wider OECD work program and the electronic commerce work program of the WTO. Of particular interest is the question of the extent to which products delivered entirely on-line may be said to be new or different, including the question of customization. On-line transactions need to be carefully examined whether the provision of GATT and GATS are adequate. The guiding principle should be to achieve neutrality between electronic and physical trade.

The WTO, at its May 1998 meeting attended by Ministers from all 132 member countries, reached agreement to continue the practice of not imposing customs duties on electronic commerce transactions. Also, the May 1998 Ministerial Conference asked the General Council to institute a comprehensive work program to examine all trade-related issues relating to global electronic commerce. Some of the challenges and opportunities facing the multilateral trading system can be summarized broadly as follows.

First, one of the challenges can be outlined by the components of the transaction. Electronic advertising may allow circumvention of the advertising laws of domestic legal systems. The difficulty of identification on-line reduces trust when carrying out transactions. Copyright protection will be an obstacle to electronic delivery.

Second, the major impact of electronic commerce for internatinoal trade is that it provides easy access to cheap and fast information. A big buyer would do well to organize its bidding system on a web site. A successful service provider is normally able to attract customer by providing services difficult to get or unavailable in physical shops. Electronic commerce will bring new types of middle men, which will facilitate the efficiency of all types of transactions.

Finally, the needed trade policy approach will be greatly altered as distances are irrelevant and physical borders do not exist. Both trade-related information and business on financial and econmic reliability can be disseminated via electronic forms. Also, trade facilitation and government procurement can be made efficient by introducing electronic applications and bidding systems on-line. Cross-border supply by the Internet may allow providers of education and health services to circumvent existing restrictions on the movement of persons and national local certification requirements.
In response to the questions raised in this paper, several suggestions are made.

Major issues reviewed in this paper should be constrasted by the spot research to find real problems which firms currently face. Findings could be shared among users or reflected, if possible, in the codification of global electronic commerce.
In the context of international trade rules, cross-border electronic transmssions, including digitized products, could be charaterized as trade in goods, trade in services or possibly under a newly created category. Further, research should be carried out concerning the effectiveness of WTO rules visa-vis electronic commerce.

More efforts should be devoted to incresing of activity of domestic electronic commerce. Unless electronic commerce is realized domestically, a country can not hope to compete in international trade via electronic commerce. Special support for the demand side should be strengthened because those transactions are fulfilled by the innovators who are leading and promoting the diffusion of electronic commerce.

The Evolution of US Policy towards FTA and its Implications for Korea
Since the 1980s, the US approach towards trade liberalization can be broadly characterized as a two-pronged approach; while pursuing trade liberalization under the multilateral system of the GATT/WTO, the US also searches for opportunities to realize trade liberalization bilaterally, through the establishment of FTAs. This two-pronged approach to trade liberalization has often been complementary rather than contradictory. Such a strategy was seen at work as the US declared that it would go it alone when the Uruguay Round did not show satisfactory progress in the late 1980s. This threat was seen as successful as a number of countries blocking progress appeared to cave in to the US pressure. Due to the strong direct and indirect influence the US exerts on the Korean trade environs, Korean trade policymakers must not only keep abreast of US trade policy and the strategy of its trade negotiators, but must shape policies to best capitalize on the trade position of the US.

The US signed the Israel-US FTA in 1985, the Canada-US FTA in 1988, and NAFTA in 1992. Following establishment of NAFTA, momentum in the US for free trade has seemed to wane, with President Clinton failing to receive renewal of fast track authority from the Congress. However, loss of attention and supporting legislation have not altogether halted free trade initiatives deriving from the US. The US already offered to begin formal negotiations with Chile regarding the country's joining of NAFTA and the US has agreed with the 34 countries in the Western hemisphere to conclude the Free Trade Agreement in Americas (FTAA) by 2005.

The US administration has continued to study the feasibility of the establishment of FTAs with Asian countries. The report by the USITC (1989) analyzed the feasibility of an FTA with Japan, ASEAN, and a number of other Asian nations, including Korea. The report found that, except for Japan, the US would stand to benefit economically from the establishing FTAs in the region.

However, various political roadblocks and costs were found in almost all areas of Asia outside of Japan. For example, while an FTA with Korea was assessed as likely to benefit the US economically, it was believed that such a pact would intolerably increase anti-US sentiment in Korea.

Turning to discussion of APEC, while the US appeared only passively interested following joining the group in 1989, it appeared that President Clinton viewed APEC as offering great promise as a vehicle through which to open the Pacific region's markets. Thus, the US enthusiastically held the first APEC Leaders'meeting in Seattle in 1993. Upon APEC declaring region-wide free trade as its goal in the following year, the US enthusiasm for APEC began to surpass its interest in establishing bilateral FTAs in the region. To achieve the goal of free trade, APEC economies agreed to the Individual Action Plan (IAPs) and the Collective Action Plan (CAP). However, while touted as trade liberalization plans, nothing in the agreements signified binding guidelines and symbolized, at least from the point of view of the US, the end of any opportunity in the short-term to realize a multilateral free trade agreement in the Pacific.

This failure to reach real trade liberalization through APEC has seen the US alter its position to where it now views bilateral FTAs with Asian countries as offering the best hope to promote trade liberalization in the region. Korea would likely be near the top of any list of candidates, due to its already strong trade partnership with the US and the substantial decrease in anti-US sentiment since the early 1990s.

The current US administration, following its loss of fast track authority in 1994, has not been very active in pursuing trade liberalization. However, this may soon change. Signs are promising that the US Congress will restore fast track authority to the President at the end of 1999 or early 2000. Business community support for increased free trade initiatives has been strong. Many business leaders see the relative loss of competitiveness in Chile, caused by Canada and Mexico signing bilateral FTAs with the country after the US blocked expansion of NAFTA to Chile, as a precedent that needs to be immediately reversed. Furthermore, the Congress wants to conclude within three years the new WTO Round, which will resume at the end of 1999. Increasingly active business community pressure and growing Congressional support will likely see the US administration resume its search for ways to promote free trade.

So far, Korea's normal reaction to any expansion of regional trading blocs has been to push for the WTO to enact barriers to such spread. The major ruling regarding regional trade agreements under WTO is GATT XXIV. Altering this article to where it becomes more restrictive of the establishment or further expansion of regional trade agreements is unlikely as most WTO member countries already participate in one or more regional trading blocs. Thus, the most realistic policy for Korea to follow is to actively explore the establishment of FTAs with major trading partners. This will require Korean trade policy makers and politicians to adopt an entirely new approach and even mindset; however, no other option is currently available.

Electronic commerce is emerging as one of the main issues in the international community. It has the potential of becoming one of the major features of economic development in the 21st century, changing the conventional method of transactions. Consequently, as a new way of doing business, electronic commerce will require significant changes in the existing trade norms.

A major issue in electronic commerce deals with its taxation aspects, as various problems arise in applying current international taxation system to electronic commerce. However, even with a strong initiative to align multilateral rules governing electronic commerce, there can be varying positions among countries simply due to concerns of undermining their tax revenue.

OECD is a dominant agenda-setting body leading international discussion on the taxation of electronic commerce. In this context, this study summarizes OECDs discussions on electronic commerce with regard to taxation and examines policy implication for Korea.

Issues of discussions surrounding taxation policy on electronic commerce includes Value-added Tax (VAT), customs duties, international taxation, and tax administration. In the case of VAT, the main issue at hand is determining the country of origin of supply to assess product/service-related tax liabilities. As for customs duties, there is a growing need to differentiate taxation according to the method of transaction, as goods can effectively avoid taxation when ordered or delivered electronically. Regarding international taxation on corporate income, concerns are related to determining the place of permanent establishment and to transfer pricing. Lastly, tax administration issues deal with taxpayer identification, acquiring evidences on taxable transactions and income, application of tax rules, and maintaining tax revenues, by securing information on taxpayers and income through a consolidated network.

Domestically, the question of how to address taxation problems regarding electronic commerce is also a top priority. The basic principle of the solution will be to modify the tax system and administration to incorporate transaction via the internet, while focusing efforts to shape international norms in line with national interests by participating in discussions within international organizations such as the OECD.

Most importantly, with regard to Koreas taxation policy on electronic commerce, provision of services by foreign companies needs to be included as a taxable transaction in the VAT system, which is currently bases its principle of taxation on the country of destination.

In respect to the demand for discriminatory tariff treatment between products traded traditionally and electronically, Korea may have to adhere to the declaration made at WTO Ministerial Meeting to introduce no new tariffs for products traded electronically. However, with the development of taxation technologies and further discussion within the WTO and OECD, a more in-depth study on the possibility of tariffication needs to be conducted.

As for taxation of income generated from by foreign companies from domestic electronic commerce, Korea should adopt a system of taxing the income source, irrespective to the presence of permanent instablishment. While this is not a matter solely under the national authority of individual states, considering that a consensus for greater taxation right of country of origin is expected to increase within OECD, Korea needs to take a more clarified position on the issue. Lastly, regarding transfer pricing, Korea must accumulate its own experiences in line with the current discussions within the OECD.

The core issue in taxation of electronic commerce is identifying individual transactions made through internet. Taxing authorities, therefore, in cooperation with the financial institution who possess information related to electronic commerce transactions, will have to look for ways to efficiently solve taxation problems, by, for example, intervening in the payment process to levy withholding taxes. At the same time, they need to systemically introduce electronic technologies in the taxpayer service system in the long term.

Studies on Recent Investment Dispute Cases
Kwanho Kim Sungmi Lee

In the world economy today there exist many international arrangements concerning FDI. The arrangements set forth the rights and obligations for the actiors in the area of FDI, such as multinational corporations, host country government, and home country government. For example, host governments should treat foreign investors on a non-discriminatory basis and should protect their property. Corporations are obliged to accept the laws of the host government and are also obliged to avoid restrictive business practices. The home government has an obligation to recognize host government's right to regulate the activities of corporations. Such a complex network of rights and obligations produce occasional disputes between actors.

This report studies recent investment dispute cases which have some implications for Korea.Chapter 2 looks at investor dispute cases under NAFTA. The NAFTA Investment Chapter provides investors with strong ivnestment protection and an arbitration mechanism to resolve disputes between an investor and the state. While NAFTA is a trilateral agreement, similar disputes could occur under a BIT with the U.S., which is being negotiated, or under a multilateral investment agreement, which is expected to emerge in the near future.

Chapter 3 looks at some labor-management dispute cases in foreign invested enterprises. Due to their complex nature as multinationals, labor disputes are sometimes not settled at the local level, but develop into diplomatic disputes between the host and home governments. The OECD Guidelines on Multinational Enterprises and their procedural mechanism are potentially effective in settling such disputes.

Chapter 4 reviews the development of the U.S.-EU dispute over the Helms-Burton law, focusing on the context of MAI negotiation at the OECD. The dispute was settled by the two sides reaching an Understanding in May. An important meaning of the Understanding was lost by the de facto failure of the MAI negotiation. But the disciplines on illegal expropriation which were developed by the two sides, will have impact on future rule-making on this issue at the multilateral level.

Chapter 5 looks at state to state dispute case which the U.S. charged that the EU`s restrictions on banana imports were unfair. The WTO Panal founded that the EU did not fulfill its WTO obligations under the national treatment principle of GATs. However, the U.S. is in the process of preparing retaliation as the EU`s proposed import regime remains inconsistent with the WTO ruling on the banana.The case marks the time that a WTO dispute settlement panel has ruled on the GATs ; its findings will likely guide interpretation of similar cases in the future.

Trade Facilitation in the WTO and Policy Implications for Korea
Chan-Hyun Sohn and Hyo-Sung Yim
Trade Facilitation is often defined as "the simplification and harmonization of international trade procedures" with trade procedures being the "activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade". This definition relates to a wide range of activities such as import and export procedures (e.g. customs or licensing procedures); transport formalities; payments, insurance, and other financial requirements. Steadily growing volumes of trade, together with tariff levels at an all-time low after the conclusion of the Uruguay Round and modern technology available to significantly improve the management of cross-border trade and distribution of goods have lately created a strong interest from international business in the improvement of the infrastructure for international trade. The losses that business suffers through delays at borders, complicated and unnecessary documentation requirements and lack of automation of government mandated trade procedures are estimated to exceed in many cases the costs of tariffs.

Work in this area has been carried out by organizations such as UNCTAD, UN/ECE or the WCO for several decades. At the regional level, initiatives such as APEC and ASEM either in the framework of customs cooperation, general trade facilitation work, or in support of free trade agreements have recognized the need to reduce, simplify and harmonize trade procedures. However, trade facilitation was only added to the WTO agenda in December 1996, when the Singapore Ministerial Declaration directed the Council on Trade in Goods (CTG) "to undertake exploratory and analytical work, drawing on the work of other relevant organizations, on the simplification of trade procedures in order to assess the scope for WTO rules in this area." Specific elements connected with the simplification and harmonization of trade procedures are already contained in the WTO legal framework, e.g., in Articles V, VII, VIII, X of the GATT 1947 as well as the in Agreements on Customs Valuation, Import Licensing, Preshipment Inspection, Rules of Origin, Technical Barriers to Trade, and the Agreement on the Application of Sanitary and Phytosanitary Measures. However, only the Singapore Ministerial Conference gave the WTO the mandate to take a more comprehensive look at trade facilitation.

WTO's initiative on trade facilitation has advanced considerably with the holding of a symposium on trade facilitation in March 1998, where members heard first-hand from some of the most prominent corporations in the world on the practical problems they encounter in moving goods across borders. The symposium placed WTO Members in a position to move to the phase of analytical work on trade facilitation, in order to assess the scope for WTO rules in this area, as set out in the Singapore Declaration. In the WTO Trade Facilitation Symposium, a large number of issues were raised, which forms the basis of the current WTO discussions.

Work within the WTO thus far, through a series of informal discussions under the auspices of the CTG, has identified problems of real concern concerning customs procedures and physical movement of consignments. The CTG's next discussions will be critical in the development of the issues which will focus on relevant elements of various WTO Agreements, the role of electronic commerce and the link between economic development and the trade facilitation environment. However, work on trade facilitation is still in its initial stages with discussion being confined to identifying areas where WTO has a relevant role and if WTO has a relevant role at all in trade facilitation. While considerable time will be required to make any progress within the WTO that would ultimately lead to rule-making, there is a consensus among the key players, such as the EU and US, for a need for additional WTO action on trade facilitation. With CTG's recommendations due to be made at the Third Ministerial Conference, it is highly probable that that trade facilitation will be incorporated into next phase of WTO negotiations scheduled to be launched in the year 2000.

Trade facilitation has numerous implications for Korea. As Korea relies heavily on trade, trade facilitation initiatives could provide an opportunity for domestic firms to strengthen its competitiveness by substantially reducing logistic and financial costs. Therefore, there is no reason for Korea to oppose WTO's initiative in the field of trade facilitation. Rather, Korea should take an active position in the multilateral discussions since it has already achieved to a considerable extent modernization of customs procedures and the benefits of trade facilitation accruing to domestic firms are substantial. Moreover, in order to reap the full benefits of trade facilitation, Korea must continually reform its customs laws and procedures in line with the changing technological and global trade environment..