Korea, Japan to jointly cope with trade friction in shipbuilding

South Korea and Japan, which share two thirds of the world¡¯s shipbuilding market, have agreed to make joint efforts to cope with trade friction in the industry.

The two countries held a working-level meeting in Seoul Tuesday to discuss trade friction between Korea and the European Union and restructuring in the shipbuilding industry, the Ministry of Commerce, Industry and Energy (MOCIE) said.

In the meeting, Korea asked Japan to extend support to it in an objective and fair manner in a bid to resolve Korea-EU trade frictions, a ministry official said. The two countries also shared the view that they would seek to resolve the friction through multilateral discussion at the Organization for Economic Cooperation and Development (OECD) and continue discussion on the issue of revising the commercial interest reference rates (CIRR) for the export of ships.

The CIRR stipulates the application of commercial standard interest (each country¡¯s currency interest rate + 1 percent) on loans offered by financial institutions in the country that receives shipbuilding orders to foreign the ship owners that made the orders. It is a regulation promoted by the OECD.

Japan, taking advantage of its low interest rates, is seeking to advance the timing of the application of CIRR, while South Korea maintains its enforcement should be delayed until the conclusion of the OECD¡¯s shipbuilding agreement.

Lee Byong-Ki eye@donga.com