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Japan Takes Shipbuilding Dispute to WTO

Image: Hyundai Merchant Marine

Laxman Pai

The Japanese government has filed a new petition with the World Trade Organization (WTO) against South Korea concerning alleged aid provided by the Korean government to the country's shipbuilding industry.

According to Yonhap, Japan has asked South Korea to discuss the issue which it says is affecting international competition, and if the talks fail, Japan will seek to establish a dispute settlement panel.

In November 2018, Japan filed a complaint with the WTO, claiming that South Korea violated existing regulations by providing subsidies to its shipbuilders, resulting in damage to the Japanese industry.

In December 2018, the two sides met in Seoul but failed to narrow their differences on the issue.

The case specifically focused on Hyundai Merchant Marine's (HMM) purchase of 20 LNG-powered mega-ships on 28 September 2018.

The move would likely delay the merger between South Korean shipbuilding giant Hyundai Heavy Industries (HHI) and its smaller rival Daewoo Shipbuilding and Marine Engineering (DSME).

South Korea's Ministry of Trade, Industry and Energy said the Japanese argument is groundless and made clear the measures it took are in line with international norms.

Feb 4, 2020

 

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