Korea rebuffs Japan’s claims over shipbuilding subsidies

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Korea rebuffs Japan’s claims over shipbuilding subsidies

Korea on Tuesday denied allegations it violated international trade rules by subsidizing its shipbuilders, saying the move did not have a negative impact on the global industry.

Japan filed a complaint with the World Trade Organization (WTO) in November 2018 accusing Korea of subsidizing its shipbuilders, resulting in damage to the Japanese industry.

Tokyo said the Korean government has injected more than 12 trillion won ($9.8 billion) to normalize Daewoo Shipbuilding & Marine Engineering.

On Monday, Seoul and Tokyo held a video meeting as part of the dispute settlement process under WTO rules, the Ministry of Trade, Industry and Energy said.

During the meeting, Korea reiterated its stance that the Japanese claims are groundless and that all financial transactions with shipbuilders met WTO rules. Seoul ruled out accusations that its actions have had a negative impact on the Japanese shipbuilding industry.

The Trade Ministry said it plans to cooperate with the legal procedures of the WTO.

Korea and Japan have been in a trade deadlock since last July, after Tokyo abruptly imposed restrictions on exports of three key industrial materials to its Asian neighbor.

Japan later removed Korea from its list of trusted trade partners on the grounds that Seoul did not effectively control the trade of sensitive materials that could be diverted for military use.

To find a breakthrough, the two countries each made goodwill gestures starting in November, with Korea dropping its WTO lawsuit and putting off the termination of the General Security of Military Information Agreement with Japan.

Tokyo partially lifted the curbs on exports of photoresists to Korea ahead of their summit in December, but no further progress was made.

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