Nov 26, 2004
WTO subsidy panel set to rule against EU?
The World Trade Organization has ruled against European Union claims that the Korean government provided illegal subsidies to its shipbuilding industry, the Korean Ministry of Foreign Affairs and Trade said today.
According to the Ministry, in a preliminary report, the WTO does not view the government-led restructuring of the Korean shipbuilding sector following the 1997-1998 Asian currency crisis as illegal subsidies.
"The latest ruling from the WTO, though tentative, supports our position that government-backed corporate restructuring cannot be seen as illegal subsidization," the Foreign Ministry said in a statement.
A formal report will be issued by the end of next month, following which the EU may appeal.
The dispute was triggered in 2002 when Europeans accused the Korean shipbuilders of receiving illegal assistance from the government in the form of subsidies and debt write-offs.
European shipbuilders also said the Korean shipyards intentionally undercut prices that created an oversupply in the market contributed to damaging the industry worldwide.
In July last year, a WTO panel was set up at the request of the EU.