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April 22, 2019

Korea gets WTO sanction to slap US$85m in retaliatory duties over US washer measures

PUBLISHED : February 10, 2019 - 14:24

UPDATED : February 10, 2019 - 15:58

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The World Trade Organization (WTO) ruled on Feb. 9 that South Korea can move to impose annual retaliatory duties worth US$84.8 million against U.S.-made goods in response to measures taken against large residential washers.

The ruling outlined South Korea “shall be entitled to impose suspension of concessions or other obligations” in the amount of $74.4 million for U.S. anti-dumping duty measures and $10.41 million for countervailing duty measures during the first year following the date of the Dispute Settlement Body (DSB) authorization.

“In subsequent years following the date of DSB authorization, and if the United States has not fully complied with the DSB recommendations and rulings, Korea shall be entitled to increase the value of its level of suspension by a percentage corresponding to the United States‘ price inflation rate from the preceding calendar year,” according to an arbitrator’s decision posted on the website of the WTO.

 

WTO headquarters in Geneva, Switzerland
WTO



The decision comes a year after South Korea requested the authorization from the Dispute Settlement Body to suspend concessions and other obligations in the goods sector on the grounds that the U.S.had failed to comply with the DSB‘s recommendations and rulings within the reasonable period of time.

An arbitrator determined that the reasonable period of time for the U.S. to implement the DSB’s recommendations and rulings would expire on 26 December 2017.

South Korea said it will review follow-up measures in consultation with the local industry, the Ministry of Trade, Industry and Energy said, without elaborating.

The trade dispute began in January 2013 when the U.S. imposed 9.29 percent of anti dumping duty and 1.85 percent countervailing duty on washers built by Samsung Electronics Co. while slapping 13.02 percent of anti dumping duty on washers of LG Electronics Inc.

The arbitrator agrees that Korea should be granted authorization to suspend concessions equivalent to the level of nullification or impairment for non-large residential washers, in any future instance of application of the “as such” inconsistent measure, according to the decision.

In 2017, the U.S. International Trade Commission recommended a 50-percent tariff rate on imports of large Samsung and LG home washers built beyond the 1.2-million-unit threshold.

The recommendation came in response to a safeguard petition filed by U.S.-based Whirlpool in May 2017. The commission determined in October 2017 that the Samsung and LG washers were having an adverse impact on the domestic industry.

Samsung has invested $380 million in building a washer plant in South Carolina, while LG has invested $250 million in a washer plant in Tennessee that has an annual capacity of more than 1 million units of front- and top-loading washing machines.

The two companies exported a combined $1 billion worth of large residential washing machines to the U.S. in 2016, holding 16 percent and 13 percent, respectively, of a market that is led by Whirlpool with 38 percent.

By Park Ga-young and newswires (gypark@heraldcorp.com)

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