The U.S. trade authority on Friday requested consultations with South Korea under the U.S.-Korea free trade deal to address the U.S. government’s concerns about competition hearing procedures of a Korean antitrust watchdog.

This would be the first time for the two countries to meet for consultations under the Korea-U.S. FTA since the trade pact took effect in 2012.

“The Office of the U.S. Trade Representative (USTR) today requested the first ever consultations with the Republic of Korea under the chapter on Competition-Related Matters of the United States-Republic of Korea Free Trade Agreement,” the USTR said in a statement on Friday, local time. “Through these consultations, the United States will attempt to resolve concerns regarding procedures in competition hearings held by the Korea Fair Trade Commission (KFTC).”

Before the USTR’s official request for the consultations, the USTR has raised competition-related issues several times, but the issues have not been addressed yet, the U.S. government said.

The USTR stated that the KFTC hearings have “denied U.S. parties certain rights, including the opportunity to review and rebut the evidence against them,” adding that “denial of this fundamental right undermines their ability to defend themselves.”

The USTR also argued Korea has not complied with Korus Article 16.1.3, which states that a party in a competition-related hearing should “have a reasonable opportunity to… review and rebut the evidence and any other collected information on which the determination may be based.”

The USTR did not mention a particular hearing, but industry insiders think the latest move by the trade authority might have been triggered by the Korea’s anti-trade agency’s decision to slap a record 1.03 trillion won ($908 million) fine in Qualcomm Inc. in Korea in December 2016 for abusing its market power to interfere with fair competition and monopolizing patent right in the country. Qualcomm has filed an appeal with the Seoul court arguing that the investigation undermined its ability to defense itself.

During the consultations, the Korean government plans to convince the U.S. that the local fair trade law and investigation process do not violate the Korus agreement during the consultations.

By Lim Sung-hyun and Lee Eun-joo

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