hankyoreh

Representatives from Hanhwa

The Office of the Minister for Trade (OMT) announced on Jan. 24 that it had formally requested bilateral discussions with the US Trade Representative (USTR) on a US decision imposing safeguards on large home washing machines and solar cells and modules.

The administration explained that the request was based on Article 12.3 of the World Trade Organization Agreement on Safeguards, which states, “A Member proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations with those Members having a substantial interest.” It also said it had proposed to hold discussions as early as next week.

During the proposed discussions, the Moon administration plans to raise issues with the US measure as being excessive and not in accord with related WTO agreements, and to request that major safeguard content be reduced or withdrawn. In particular, it plans to request suitable compensation according to Article 8.1 of the Agreement on Safeguards.

The agreement states that in cases where a specific country imposes safeguards – which are strictly regulated in international trade for possible abuses – the country must attempt to provide the other country with concessions to compensate for the resulting damages to exporting companies. This would mean that the US is obligated to offer additional corresponding tariff reductions on other South Korea products in the US market besides those subject to the safeguards.

The South Korean government further said it plans to actively pursue concession suspensions (the imposition of retaliatory duties) as per Article 8.2 of the WTO Agreement on Safeguards if the US does not agree to compensation. Under this approach, South Korea would “retaliate” for damages from the safeguards by adopting an equivalent suspension of tariff reductions or duty-free status for US products currently imported to South Korea.

By Cho Kye-wan, staff reporter

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