South Korea claims victory in WTO dispute

South Korea claims that the World Trade Organization (WTO) decision calling on Seoul to end shipbuilding subsidies within three months represents a victory in its long-running shipbuilding dispute with the European Union. The foreign ministry said WTO?s ruling “has no impact” on the South Korean shipbuilding industry as the subsidies no longer exist because the pre-shipment loans and advance payment refund guarantees all matured or expired at the end of last year.

The ministry highlighted that the WTO ruled in Seoul’s favour by rejecting the EU charge that it had suffered “serious prejudice” from corporate restructuring loans to three South Korean shipbuilders, Daewoo, Samho and Daedong. The EU had alleged that the loans were illegal subsidies but the WTO concluded that these did not amount to illegal state aid.

European shipbuilders claimed the subsidies helped South Korean companies sell their ships at below cost while Seoul argued that its industry was simply more competitive.