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EU, Seoul Trade Accusations for Unfair Practices
South Korea accused the European Union (EU) of providing subsidies to its shipbuilders Friday, December 1.
The accusation came after the EU said it will investigate South Korean shipbuilders Saturday for unfair dumping practices.
The EU alleged that South Korean shipbuilders received unfair subsidies and tax-breaks from the South Korean government and received orders at prices below costs, hurting European shipbuilders.
The South Korean Commerce, Industry and Energy Ministry Friday denied the allegations, saying the weak won and improved efficiency are behind the low prices.
The EU will send a team to South Korea in February to investigate based on its own Trade Barrier Regulations until April.
If the two sides fail to reach an understanding by this deadline, the EU said it will file a formal complaint against South Korean shipbuilders at the World Trade Organization.
South Korea has formed a special task force to prepare against the allegations and will also file a suit against the EU if the case is indeed brought to WTO, said the ministry.
The Trade Barrier Regulations are the EU equivalent of the United States' Super 301, a weapon against suspicious import increases.
South Korean shipbuilders have expanded steadily into the world market and account for 51 percent of the global shipbuilding industry in the first half of this year.
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