Breakdown of talks on US safeguards will force Korea to seek WTO litigation

By Yonhap

Published : Mar 11, 2018 - 13:36
Updated : Mar 11, 2018 - 17:24

Breakdown in talks to resolve US safeguard measures against washers and solar panels will force Korea to take the case to the World Trade Organization, the government said Sunday.

The Ministry of Trade, Industry and Energy said bilateral negotiations failed to reach a satisfactory conclusion thus necessitating Seoul's pursuit of litigation at the world trade body. It said the government had made clear in advance that such an action would be taken if the United States did not withdraw the plan or offer adequate compensation for affected local companies.

The ministry said the safeguard proclamation signed by President Donald Trump on January 23 outlines that Washington can engage in talks with other WTO members to reduce or adjust trade restrictive measures, and that any agreements on changes that may be made will be announced on March 4.  


Trump signed a set of safeguard measures against large residential washing machines and solar cells made overseas.

The safeguard includes a 20 percent tariff on the first 1.2 million units of imported large residential washers and a 50 percent tariff on units exceeding the quota. The below-quota rate goes down to 18 percent and 16 percent in the second and third years, respectively. For units exceeding the quota, the rate goes down to 45 percent and then 40 percent.

The Seoul government asked the United States Trade Representative for talks on Jan. 24 and argued that action is too harsh, did not conform to WTO rules and could not be accepted.

With the failure to reach an understanding, Korea has the option to retaliate by halting its own tariff concessions on some US products. Such actions can only be made three years after a country fails to win a trade dispute hearing at the WTO.

An industry ministry official confirmed that Seoul now can take the matter to the WTO.

He pointed out that the government has said on numerous occasions that it will take firm action in response to unfair trade policies.

Others said that judging by past experience, policymakers did not think an agreement would be forthcoming on the washer and solar panel issue. They said that Washington did not give compensation to countries hurt by its 2002 steel safeguard measure.

Meanwhile, the Federation of Korean Industries carried out a poll on 44 large exporting companies on whether businesses thought top priority should be given to easing protectionist measures.

"Some 30 percent of companies said talks to resolve protectionist policies should be given center stage," the business lobby for big businesses said.

Respondents asked the government to offer more assistance so they can win large scale projects abroad, and 25 percent wanted Seoul to do more to bring down non-tariff barriers in emerging markets.

On the free trade agreement (FTA) renegotiation talks with the United States, 29 percent said a balance of interest should be reached in any new deal. On an open trade pact with Japan, 32 percent of businesses said they welcome such a move, while 18 percent were opposed.

The FKI said that because of the country's reliance on trade to generate growth, policymakers need to respond quickly to any developments that occur.

"Every network needs to be utilized to persuade trading partners to consider our positions on various issues," it said.(Yonhap)


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The Korea Herald by Herald Corporation