Korea Virtually Triumphs in the Shipbuilding Lawsuit Versus the E.U.

On November 24, informed trade sources in Geneva, Switzerland announced that Korea has received a favorable judgment in the shipbuilding lawsuit filed at the World Trade Organization (WTO) by the European Union (E.U.) against Korea.

It communicated that the WTO dispute settlement panel decided, concerning the lawsuit filed by the E.U. stating that Korea granted subsidies to shipbuilding companies, in the provisional report that the restructuring method such as the write-off of debts of Daewoo Shipbuilding, Samho Shipbuilding, and Daedong Shipbuilding are not subsidies under the WTO agreement as the E.U. maintains.

The panel also concluded that the ship finance and subsidy system for advance returns (carry-back provisions of advances) operated by the Export-Import Bank of Korea has no problems in itself. However, it decided that for individual companies, in some cases, it is considered a subsidy.

The provisional report has taken a year and four months to be released since WTO accepted the E.U.’s request and set up the panel last July. The final report will be released within a month, and it is anticipated that the contents will not be notably different from the provisional report.

However if the E.U. does not accept the final report, it will take some time to draw the final conclusion, which will be after the appeal and after two to three months of adjustment.