Seoul Begins Process to Bring US Safeguards to WTO open the window of AOD

Write : 2018-05-20


South Korea has launched the process to file a complaint with the World Trade Organization(WTO) against Washington’s safeguards on Korean washing machines and solar panels.
The move was expected as the government expressed its intent to do so several times.
The Ministry of Trade, Industry and Energy revealed Monday that it sent a letter to the U.S. calling for bilateral talks as the first step to settle the dispute on the issue. The ministry added that it also informed the WTO of the move.
The ministry plans to persuade the U.S. to withdraw the safeguard measures swiftly. If the dispute is not solved through bilateral talks, Seoul will call on the WTO to create a panel that will mediate the dispute settlement process.
Under WTO rules, the U.S. is required to launch bilateral talks within 30 days of receiving the request for talks. If no agreement is reached within 60 days, South Korea can request the creation of a WTO dispute settlement panel.
Trade Minister Kim Hyun-chong previously said the complaint process will begin in March but it was delayed due to other pending concerns, including negotiations to revise the free trade agreement with the U.S. and address Washington's steel tariffs.
South Korea had earlier requested the U.S. to compensate for export losses expected from the safeguard measures, but Washington rejected the request.
Ahead of the formal complaint, Seoul last month notified the WTO that it will suspend tariff concessions equivalent to the amount of trade affected by U.S. safeguard measures, which is about 480 million dollars annually.
Such a retaliatory measure is possible only after three years of the activation of safeguards. But it can take immediate effect if South Korea wins the case brought to the WTO.
Observers believe there is only a slim chance the dispute will be resolved through bilateral talks. But a WTO dispute settlement doesn't necessarily bring notable results.
This is why pundits call for other actions, such as restricting imports of American liquefied natural gas(LNG) or filing a lawsuit with the U.S. Court of International Trade.
In February, the U.S. imposed heavy antidumping duties on imported solar-energy components and large residential washing machines.
The U.S. International Trade Commission had ruled that washing machine imports do not cause damage to the U.S. industry, and the safeguards are seen as unjustified.
According to the Korea International Trade Association, washing machine exports to the U.S. were worth 30 million dollars from January to March, down 45 percent year-on-year.
The drop is in part due to Korean manufacturers starting to operate their local plants in the U.S. in preparation for the safeguards, but clearly, shipments have been affected.
As for solar panels, exports have not yet decreased, but are expected to from later this year.

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