WTO appeals court backs
South Korea in U.S. trade dispute
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[September 08, 2016]
By Tom Miles
GENEVA (Reuters) - South Korea largely
won an appeal ruling at the World Trade Organization on Wednesday in
a challenge that puts U.S. anti-subsidy duties on Korean-made
washing machines in jeopardy.
South Korea partially won a ruling from a WTO adjudication panel in
March, but both sides appealed part of that judgment.
Wednesday's ruling by the WTO Appellate Body, which is final,
strengthened South Korea's win by reversing part of the earlier
ruling that had gone in Washington's favor, concerning the
calculation of anti-subsidy duties.
The ruling does not immediately strike down the U.S. duties imposed
in 2013 after Washington found that South Korea was unfairly
subsidizing and pricing Korean-made washers exported to the United
The U.S. Commerce Department had imposed anti-subsidy duties of up
to 82 percent on washers made by Samsung Electronics Co, LG
Electronics Inc and Daewoo Electronics Co after a complaint brought
by Michigan-based Whirlpool Corp.
South Korea complained to the WTO about the methodology used to
calculate the duties. The panel ruling in March rejected part of
South Korea's complaint, including objections to the U.S. Commerce
Department's findings that tax credit subsidies were not tied to
The WTO Appellate Body upbraided the panel for making several wrong
decisions about the U.S. methodologies, and said Washington, not
Seoul, was in the wrong.
A spokesman for the U.S. Trade Representative's office said the
agency was "disappointed" with the appellate ruling, but noted that
it confirmed WTO members' ability to employ alternative methods to
calculate duties to combat "targeted dumping", or unfair price cuts
aimed at specific regions, time periods or customer groups.
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A World Trade Organization (WTO) logo is pictured on their
headquarters in Geneva, Switzerland, June 3, 2016. REUTERS/Denis
Under WTO rules, the United States will be expected to bring its rules into line
with the appeal judgment, which could result in changes to its anti-subsidy
calculations. If South Korea feels that the United States has failed to do so,
it could ask the WTO to rule on U.S. non-compliance and then ask for trade
sanctions against Washington.
"We are currently in the process of reviewing the Appellate Body report, and
based on this review, will evaluate our options for responding to the report,"
the USTR spokesman said.
A Whirlpool spokeswoman said that the ruling would have "no direct or immediate
effect on the 2013 antidumping and countervailing duty orders on clothes washers
from South Korea", and the U.S. response could take some time.
(Reporting by Tom Miles, additional reporting by David Lawder; editing by
Dominic Evans, G Crosse)
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