WTO appeals courts backs South Korea in trade dispute with US

PUBLISHED : Thursday, 08 September, 2016, 12:18am
UPDATED : Thursday, 08 September, 2016, 12:18am

South Korea won an appeal ruling at the World Trade Organization on Wednesday in a challenge to US duties on Korean-made washing machines.

South Korea partially won a ruling from a WTO adjudication panel in March, but both sides appealed part of that judgment.

Wednesday’s ruling by the WTO Appellate Body, which is final, strengthened South Korea’s win by reversing part of the earlier ruling that had gone in Washington’s favour concerning the calculation of anti-subsidy duties.

South Korea had originally complained to the WTO in 2014 about the way the United States accused it of unfairly pricing and subsidising washing machines exported from South Korea.

The US Commerce Department had imposed anti-subsidy duties of up to 82 per cent in 2013 on washers made by Samsung Electronics Co, LG Electronics Inc and Daewoo Electronics Co after a complaint brought by Michigan-based Whirlpool Corp.

The panel ruling in March rejected part of South Korea’s complaint, including objections to the US Commerce Department’s findings that tax credit subsidies were not tied to specific products.

The Appellate Body upbraided the panel for making several wrong decisions about US Commerce Department methodologies, and said Washington, not Seoul, was in the wrong.

“Therefore, the Appellate Body reversed the Panel’s finding that the USDOC’s determination is not inconsistent with (WTO rules on subsidies); and found, instead, that the USDOC’s determination is inconsistent with these provisions,” the WTO said.

Under WTO rules, the United States will be expected to bring its rules into line with the appeal judgment. If South Korea feels that the United States has failed to do so, it could ask the WTO to rule on US non-compliance and then ask for trade sanctions against Washington.