EU will not appeal

The European Union has decided against appealing a World Trade Organisation ruling on its dispute with South Korea over shipbuilding subsidies paid by Seoul, despite ongoing controversy over the outcome. The EU accepted the ruling made last month, during a meeting of the WTO’s Disputes Settlement Body, a source close to the organisation said.

South Korea also decided not to appeal, the source added, despite disagreement over their interpretation of the outcome. In its ruling on the complaint brought by the Brussels, a WTO panel rejected a claim that the EU had suffered “serious prejudice” from subsidies to three shipbuilders, Daewoo, Samho and Daedong. However, it gave South Korea three months to halt some “prohibited subsidies” via the Korean export-import bank Kexim, paid as pre-shipment loans and advance payment refund guarantees that South Korean shipbuilders offered clients.

South Korea has 90 days to come into line with the decision under WTO rules but Seoul indicated that the loans have already been repaid, a move that was questioned by the EU during the meeting, the sources said.