EU Sides Japan in Suit Against S. Korea’s Shipbuilding Industry

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Highlights

  • EU expressed its intention to participate in an on-going complaint filed by Japan against South Korea.
  • Japan blames South Korea for violating WTO regulations.
  • The violations include providing subsidies to its shipbuilders, resulting in damage to the Japanese industry.
  • Experts warn South Korea to be prepared for the complaints by Japan and EU.

On November 25, the European Union (EU) has expressed its intention to participate in an on-going complaint filed by Japan against South Korea’s shipbuilding industry.

The European Union released a statement to the WTO, “The EU notes that the request for consultations relates to a number of alleged export and local content subsidies provided by Korea directly, or through public or private institutions, to Korean shipbuilders or their customers”.

Japan blames South Korea

On November 6, Japan requested consultations with South Korea, claiming that Seoul violated the WTO regulations by providing subsidies to its shipbuilders, resulting in damage to the Japanese industry.

The EU added, “The EU is a major global producer and exporter of both ships and maritime equipment, such as ship engines and navigational equipment. The measures referred to in the consultation request may have a substantial impact on the price of ships, including ship engines and other maritime equipment, and affect trade flows in these products”.

South Korea embraces itself for impact

Experts said South Korea should make preparations for potential complaints to be filed by the EU.

Ahn Duk-geun, a professor of international studies at Seoul National University said, “The EU earlier raised a similar issue as Japan at the Organization for Economic Cooperation and Development. I believe that the EU’s move to participate in the consultations indicates that it is also seeking to file a suit against South Korea”.

In October 2002, the EU sued South Korea, claiming the government’s support for the restructuring of local shipbuilders can be considered to be subsidies. In March 2005, the WTO came up with a conclusion accepting most of South Korea’s arguments.

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Source: Yonhap News Agency

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