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The World Trade Organization (WTO) ruled in favor of South Korea regarding its dispute over tariffs the US placed on imports of large household washing machines made in Korea.

The WTO circulated a panel report on the dispute on Tuesday, in which it stated that the US’ safeguard measures on imports of large residential washers are inconsistent with the WTO’s General Agreement on Tariffs and Trade and sided with the dispute’s complainant, South Korea, according to the South Korean Ministry of Trade, Industry and Energy.

The US government has been imposing safeguard tariffs on imported large household-use washers since February of 2018 based on claims by domestic manufacturers that they were suffering from significant losses due to imported washing machines. Essentially a measure to check Samsung Electronics and LG Electronics, the three-year measure was extended last year for another two years. Now in its fifth year, it was to levy tariffs of 14% to 30% on up to 1.2 million units of finished washing machine products and tariffs of 0% to 30% on up to 130,000 washing machine components starting this month until February of next year.

After concluding that the safeguard measure violated WTO rules, the South Korean government lodged a complaint with the WTO in May 2018. The WTO panel report release Tuesday upheld five key claims by South Korea on how the US safeguard measure fundamentally violated WTO regulations.

The panel said that the US did not reasonably and adequately explain its allegation of increased imports causing serious industrial injury and also “failed to provide a reasoned and adequate explanation in support of its finding on increased imports,” the Ministry of Trade, Industry and Energy said.

The World Trade Organization headquarters in Geneva, Switzerland (Hankyoreh file photo)

If the US accepts the WTO’s ruling, the dispute, as well as the safeguard measures, may come to an end. However, because procedures to close the case takes about a year, the safeguard may stay in place until February of next year. If the US appeals the decision, the case will stay open.

Analysts say whether the safeguard measure is immediately discontinued or not will not be of significance, as South Korean companies have already increased investments and production output within the US.

Yoon Chang-hyun, director general of trade legal affairs at the Ministry of Trade, Industry and Energy, said, “Through the recent panel report, we plan to make an effort to bring about the early conclusion of the US safeguard measure on imports of large residential washers and actively make use of the WTO’s dispute resolution procedure in order to protect the interests of South Korean industries.”

By Kim Young-bae, senior staff writer

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