business

Partial win for South Korea in washing machine dispute with US

March 12, 2016

The United States claimed, in part, that subsidies given by the South Korean government to one producer – Samsung – helped keep the prices of some machines artificially low. South Korea challenged Washington's math and argued that the duties violated trade agreements signed by both nations. – Reuters pic, March 12, 2016. The World Trade Organization yesterday ruled partially in favour of South Korea in its dispute with the United States over duties Washington imposes on imported washing machines.

The case centred on the Unites States' right to use tariffs to guard against so-called "dumping", where an imported product is sold at cut-rate prices by a foreign producer, possibly to gain market share.

The United States claimed, in part, that subsidies given by the South Korean government to one producer – Samsung – helped keep the prices of some machines artificially low.

South Korea challenged Washington's math and argued that the duties violated trade agreements signed by both nations.

Some of Seoul's arguments were dismissed in the highly technical ruling, but broadly the WTO panel found in South Korea's favour "by recommending the United States brings its measures into conformity with its obligations," a summary of the ruling said. 

The countries have 60 days to appeal the ruling.

The WTO, which polices respect for global trade accords in an effort to offer its 162 members a level playing field, set up a dispute settlement panel on the issue in August 2013.

The WTO's disputes settlement body – made up of independent trade and legal experts – has the power to authorise retaliatory trade measures against a country found at fault.

Cases can often take several years to resolve. – AFP, March 12, 2016.