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S. Korea on Its Way to Take US Safeguard Issues to WTO
With Negotiation Bearing No Fruit
S. Korea on Its Way to Take US Safeguard Issues to WTO
  • By Jung Suk-yee
  • March 12, 2018, 01:15
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The US Government has not accepted a request for softening or withdrawing the safeguard in negotiations with the Korean government, which will lead the latter to proceed with the suspension of tariff binding and a WTO dispute settlement procedure.
The US Government has not accepted a request for softening or withdrawing the safeguard in negotiations with the Korean government, which will lead the latter to proceed with the suspension of tariff binding and a WTO dispute settlement procedure.

 

The ball is now in the court of the World Trade Organization (WTO) as the United States did not accept the Korean government's demand that the US withdraw its safeguard on washing machines and solar panels and compensation for damage.

According to the Korean Ministry of Trade, Industry and Energy on March 11, a safeguard proclamation signed by US President Donald Trump on January 23 stated that when the US President judges that he or she needs to scale down, revise and put an end to a safeguard through a negotiation with a WTO member country within 30 days of the announcement of the proclamation, the US president should announced it within 40 days. But the US has not announced that it will revise the safeguard although the 40th day was March 4.

This means that the US has not accepted a request for softening or withdrawing the safeguard in negotiations with the Korean government. On January 24, the Korean government asked the United States Trade Representative (USTR) for a negotiation and requested the US to soften or withdraw the safeguard, pointing out that safeguard was an excessive measure that did not conform to WTO-related agreements.

In addition, based on Article 8.1 of the WTO safeguard agreement, the Korean government requested appropriate compensation for damage expected to be done to the Korean industry due to the safeguard. The safeguard agreement stipulates that a country which initiates a safeguard must compensate the exporting country which suffered from the safeguard in an appropriate way such as tariff reduction for other items.

If the exporting country fails to agree on the compensation within 30 days, the exporting country may take retaliatory actions such as suspending tariff binding. However, retaliatory measures cannot be taken for three years unless the affected country wins the case at the WTO.

The Korean government has announced several times that it will proceed with the suspension of tariff binding and a WTO dispute settlement procedure if Korea gains nothing in the negotiation. "The negotiation is virtually over," said an official of the Ministry of Trade, Industry and Energy. "Requirements were satisfied to take the US to the WTO."

The Ministry of Trade, Industry and Energy has been working on retaliatory measures and instituting a lawsuit since the beginning of the negotiation. The US did not compensate countries which suffered from a safeguard in 2002 when the safeguard was imposed on steel.