New Ships weekly report

Share |

Japan turns to WTO due to South Korean yard subsidies

Monday, 02 Jul 2018

The Japanese government is considering filing a complaint with the World Trade Organisation (WTO) against South Korea alleging that Korea unfairly subsidises shipbuilders and causing excessive low price competition in the world shipbuilding market.

The move comes after South Korea has provided a total of US$11 billion in financial assistance to Korean yard Daewoo Shipbuilding & Marine Engineering since 2015 through Korean government affiliated financial institutions, Japanese sources said. With the assistance improving its financial standing, Daewoo Shipbuilding began sharply cutting prices it offered in the world market to build new ships, they added. In January this year, Japan sent a document asking South Korea to correct its practice, which Tokyo believes is against WTO rules. But South Korea responded that the financial institutions provided assistance based on their own judgment. In response, Japan is considering filing a request with the WTO to begin bilateral consultations with South Korea over the issue. If their talks break down, the case will be brought to the WTO’s dispute settlement panel. It generally takes nearly two years for such a dispute to be settled under the WTO framework. Japan’s shipbuilding industry has faced intense competition from Chinese and South Korean rivals in recent years. The two countries have also been in disputes over other issues at the WTO. Japan has requested bilateral consultations with South Korea over Seoul’s antidumping duties on stainless steel bars from Japan.

Find out more about the most important developments in the worldwide shipbuilding and offshore industry and try our weekly report "New Ships". Save your test issues here.