Japan to Impose Countervailing Duties on Hynix

The Japanese government has planned to impose countervailing duties on products manufactured by Hynix Semiconductors, Yomiuri Shimbun reported on January 25.

It is expected that in case any Japanese D-RAM manufacturers officially submit an application for imposing customs, the government would commence an investigation to impose the countervailing duties amounting to 20 to 40 percent, from this July at the earliest, Yomiuri added.

However, Japan has never invoked the relevant ordinances so far, and some experts have assessed that the announcement was dreamed up for “threatening” the imports from Hynix.

One of the major Japanese D-RAM manufacturers, Elpida Memory, has required the government to impose customs on Hynix, asserting, “The loan from Korea Industrial Bank to Hynix was included in an illegal subsidy. We are suffering from the imports from Hynix, which is at a very low price.”

Although the investigation on the types of subsidies and its damages on the related markets usually takes about a year, there are ample opportunities for the government to invoke a provisional countermeasure in order to reduce the damages on the relevant companies in the country, Yomiuri reported.

The United States and the Europe Union have also invoked the countervailing duties, which amount to 30 to 45 percent, against Hynix from July 2003. The Korean government filed a complaint to World Trade Organization (WTO) stating that this countermeasure violates the agreement of the WTO.

Among the total $1.9 billion annual sales of Hynix as of 2002, approximately 10 percent of the sales were gained from the Japanese market. The intention of the Japanese government can be explained as them not wanting to duplicate the precedent errors in the D-RAM semiconductor field where several Japanese companies have been kicked out by the highly competitive Korean products so far.

“(Invoking the countervailing duties is to) prevent the currently prosperous digital home appliance industry from facing a crisis just like those of D-RAM semiconductors,” remarked a source from Economy and Industry Ministry of Japan.

Nihongeizai Shimbun also reported that Japanese government will have trade discussion with China this April to talk about the auto related field, in order to require the expansion of auto and auto parts’ import and the alleviation of the distribution-related regulations.

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