Korea files WTO complaint against U.S. safeguarding

Korea filed a complaint with the World Trade Organization (WTO) over the United States’ safeguard tariffs on its washing machines and solar energy products, Seoul’s Trade Ministry said Monday.

The Ministry of Trade, Industry and Energy said it has formally lodged the suit after failing to reach an understanding with the U.S. government over the import restrictions. The two sides have been engaged in talks for the past three months to resolve the matter outside the WTO.

Under the safeguard measure that took effect in February, a 20 percent tariff will apply on the first 1.2 million imported washers in the first year and a 50 percent tariff on machines beyond that number. A 30 percent tariff will be imposed on imported solar cells and modules above 2.5 gigawatts in the first year.

While a safeguard action is taken to protect a domestic industry from a sudden surge in imports causing or threatening damage to domestic production, Seoul’s Trade Ministry has claimed Washington failed to demonstrate a clear link between increased imports of Korean products and serious harm to U.S. industry.

The ministry said the two parties will hold 60 days of consultations on the washer and solar dispute. If the process fails, the next step could be for Seoul to request a ruling from a panel of trade experts.

“The government will consult with the U.S. counterpart, asking them to withdraw its safeguard measures, and will ask the WTO to establish a dispute settlement panel if the bilateral consultations fall through,” the ministry said in a release.

Ahead of the formal complaint, Seoul last month notified the WTO to suspend tariff concessions equivalent to the amount of trade affected by U.S. safeguard measures on the washers and solar products.

As the U.S. tariff aimed at protecting American companies would cost $480 million annually, the ministry said it will push for duties equivalent to the potential financial damage on Korean companies.

To withhold tariff concessions, WTO’s dispute settlement body should rule that U.S. safeguard actions are in violation of its regulations.

Yonhap