Things are tense between Japan and South Korea Photo: AFP/File
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Japan wins partial WTO victory in S Korea duties case

22 Comments
By Jung Yeon-je

The World Trade Organization on Tuesday largely faulted South Korea in a final ruling over anti-dumping duties slapped on imports of industrial pneumatic valves imported from Japan.

The WTO's Appellate Body mostly upheld a previous ruling finding that Seoul's anti-dumping duties on Japanese pneumatic valves violated some international trade rules.

It requested that South Korea "bring its measures found ... to be inconsistent with the Anti-Dumping Agreement, into conformity with its obligations".

But it also threw out some of Japan's claims of alleged breaches.

Tokyo nonetheless hailed the ruling, saying in a statement the Appellate Body "accepted core claims of Japan".

It demanded that South Korea "sincerely and promptly correct its measures that are inconsistent with the WTO Agreement so that its unjust measures against Japanese companies will not continue".

The WTO, which aims to create a level playing field in global trade, cannot force compliance with its rulings, but may approve retaliatory measures against violators of international trade rules.

The South Korean government on Tuesday meanwhile said it planned to "actively utilise the WTO dispute settlement process to protect its national interest and solve trade disputes with foreign countries in the future."

Japan first launched its complaint with the WTO after South Korea in 2015 slapped anti-dumping duties of around 10-20 percent on the Japanese-made valves, which are used to control the flow of air in various types of industrial equipment, including in robotics and automobile assembly.

Japan's exports to South Korea of the valves are worth about 4.0 billion yen ($37 million, 34 million euros) annually, according to the Japanese trade ministry.

Tokyo estimates Seoul's anti-dumping duties will cost it a total of around 2.3 billion yen between 2015 and 2020.

Tuesday's ruling comes at a time of escalating tension between Tokyo and Seoul.

The two countries are mired in a long-running dispute over Japanese use of forced labour in South Korea during World War Two.

A series of South Korean court rulings has demanded Japanese companies compensate victims, but Tokyo says the issue was settled by a reparations package agreed decades ago.

The neighbors have been embroiled in a tit-for-tat trade war that saw them remove each other from their lists of trusted trading partners last month, raising concerns over global supply chains.

South Korean electronics giants like Samsung, LG and SK Hynics have been forced to hunt for suppliers elsewhere in the hope of reducing their dependence on Japanese manufacturers.

Parts of the Japanese economy have also seen collateral damage, including the tourism industry.

South Koreans, who were second only to Chinese as the top visitors to Japan last year, have increasingly shunned the country.

Tuesday's ruling could be among the last issued by WTO's appeals branch.

The United States has blocked the naming of new members to the appellate panel part of the WTO's Dispute Settlement Body, which will likely see the system grind to a halt by the end of the year.

© 2019 AFP

©2019 GPlusMedia Inc.

22 Comments
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The two countries are mired in a long-running dispute over Japanese use of forced labour in South Korea during World War Two.

A series of South Korean court rulings has demanded Japanese companies compensate victims, but Tokyo says the issue was settled by a reparations package agreed decades ago.

The neighbors have been embroiled in a tit-for-tat trade war that saw them remove each other from their lists of trusted trading partners last month, raising concerns over global supply chains.

South Korean electronics giants like Samsung, LG and SK Hynics have been forced to hunt for suppliers elsewhere in the hope of reducing their dependence on Japanese manufacturers.

Parts of the Japanese economy have also seen collateral damage, including the tourism industry.

South Koreans, who were second only to Chinese as the top visitors to Japan last year, have increasingly shunned the country.

The latter half of this article has nothing to do with the WTO ruling and yet the write forces it in.

As stated in the former half, this dispute started in 2015.

7 ( +9 / -2 )

Samit BasuToday  01:16 pm JST

Actually the detail in full of the rulings goes like this;

https://www.wto.org/english/tratop_e/dispu_e/504r_e.pdf

Japan only made 5 arguments;

7.97. In its panel request, Japan asserts that Korea's measures are inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement, 

7.99. Specifically with respect to the KTC's price suppression analysis, Japan alleges two additional errors:

7.100. Japan also argues that the KTC failed to consider the counterfactual question of how prices and volumes might have been different in the absence of dumping

7.101. Finally, Japan asserts that, in its price effect analysis, the KTC failed to ensure comparability between the prices of specific products or product segments of the dumped imports and the domestic like product

7.8.3.4 Conclusion on the Panel's terms of reference

7.244. For the reasons stated above, we conclude that:

a. Japan's first causation claim is within the Panel's terms of reference;

b. Japan's second causation claim is within the Panel's terms of reference; and

c. Japan's third causation claim is within the Panel's terms of reference only to the extent that it alleges that certain other known factors were examined by the KTC in an inadequate manner. All other allegations regarding the examination of other known factors are not within the Panel's terms of reference for this dispute, and we will neither consider them further nor resolve them.

5 ( +10 / -5 )

Compromise comes at a cost.

It is time to weight up that cost and step back, this could mean that the South Korean President Moon Jae-in use his executive powers and refrain from future political interference in the juridical system.

South Korean President Moon Jae-in is the issue here.

4 ( +8 / -4 )

The misrepresentative tone of this article is pathetic.

The two countries are mired in a long-running dispute over Japanese use of forced labour in South Korea during World War Two.

It's not a dispute whether forced labour occurred or not. The dispute is over the South Korean side 'misunderstanding' the meaning of the agreement which neutralised any future legal action in 1965. Repeated requests by Japan to honour the 1965 agreement and have the forced labour legal action rejected - on the grounds of that agreement - went ignored.

South Korean companies like Samsung, LG and SK Hynics have been forced to hunt for suppliers elsewhere in the hope of reducing their dependence on Japanese manufacturers.

They haven't been forced to do anything. They get standard export approval processes applied to their Japanese exports, just like Taiwan and China. They can survive exactly as they are. This dispute concerning preferential export approval is all South Korea's own doing, in that they ignored requests by Japan to provide information concerning re-export of sensitive materials to North Korea.... something that is unsurprisingly left out of most mainstream media sources because it would expose the decade long anti-Japan stance in the media, which continues in this very article.

4 ( +9 / -5 )

It is up to any sovereign country to impose any amount of duty on any import.

Japan most certainly does....

3 ( +7 / -4 )

South Koreas tit-for-tat trade "retaliation" on Japan, by putting huge import tax on Japanese goods, has failed badly!!

Excellent decision, thanks WTO, THANK-YOU!

2 ( +14 / -12 )

Samit Basu:

The WTO threw out 12 of 13 claims made by Japan.

Lol, not even the biased Korean newspapers could count up that much. Also they didn't go into detail. Fact is that the anti dumping tarrifs in general are wrong, the other side points where just accessory. Forgt about those side points, but what do I talk, read the report: https://www.wto.org/english/news_e/news19_e/504abr_e.htm (I recommend the full version).

The neighbors have been embroiled in a tit-for-tat trade war

Since this decision is on a case that started in 2015 (by SK) and has nothing really to do with the current development between those two countries, I wouldn't call that a tit-for-tat behavior, it's rather as a lot of tats from SK.

2 ( +2 / -0 )

slowguy2Today  06:38 am JST

Here is the actually recommendation made by WTO

8.6. Pursuant to Article 19.1 of the DSU, having found that Korea acted inconsistently with certain provisions of the Anti-Dumping Agreement, we recommend that Korea bring its measures into conformity with its obligations under that Agreement.

Doesn't look as if WTO sided with SK by any measure and SK is required to repeal it's taxes to conform with WTO's recommendations.

https://www.wto.org/english/tratop_e/dispu_e/504r_e.pdf

2 ( +2 / -0 )

Japanese pneumatic valves seem to have better quality as sold good in SK.

1 ( +7 / -6 )

But it also threw out some of Japan's claims of alleged breaches.

Irrelevant. It's not a numbers game. It's the final determination and recommendation by the Appellate Body that counts.

"....8.5. Pursuant to Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment of benefits under that agreement. Accordingly, to the extent Korea has acted inconsistently with certain provisions of the Anti-Dumping Agreement, we conclude that Korea has nullified or impaired benefits accruing to Japan under that Agreement.

8.2 Recommendation

8.6. Pursuant to Article 19.1 of the DSU, having found that Korea acted inconsistently with certain provisions of the Anti-Dumping Agreement, we recommend that Korea bring its measures into conformity with its obligations under that Agreement....."

The report of the Appellate Body will be officially adopted by the WTO Dispute Settlement Body (DSB) within 30 days.

Japan demands that the ROK to promptly implement the recommendations presented in the report and to immediately eliminate its measure (anti-dumping duties) that the Appellate Body determined to be inconsistent with the Anti-Dumping Agreement.

Japan will have a right to invoke countermeasures in line with the procedures under the WTO Agreement if the ROK fails to implement the WTO recommendations.

https://www.meti.go.jp/english/press/2019/0911_001.html

1 ( +3 / -2 )

It is up to any sovereign country to impose any amount of duty on any import.

Yes, because everything exists in a vacuum, and there are no pre-existing trade agreements anywhere.

facepalm.

0 ( +7 / -7 )

Trade involves people's life, no too wise to play with trade.

0 ( +0 / -0 )

https://en.yna.co.kr/view/AEN20190911000700325

S. Korea largely wins WTO dispute with Japan over pneumatic valve duties

GENEVA, Sept. 10 (Yonhap) -- South Korea on Tuesday largely won a World Trade Organization dispute over its anti-dumping duties on Japanese pneumatic valves.

In a newly published report, a WTO appeals panel said it could not demonstrate any violation of WTO rules in most of the core issues surrounding the duties.

The decision upholds the initial 2018 ruling for all but two points of contention, leaving South Korea with eight wins out of nine.

WTO finds Korean anti-dumping tariff on Japanese pneumatic valves is legal under WTO rules.

WTO finds faults in the formula used to calculate the price differences used in tariff calculations.

The anti-dumping tariff on Japanese pneumatic valves will remain, but at a different rate.

Since Japan failed to remove the anti-dumping tariffs, Japan lost.
0 ( +2 / -2 )

HeckleberrySep. 11  01:40 pm JST

The WTO threw out 12 of 13 claims made by Japan.

@Samit - Not that I care too much about the valve export issue ( I've never heard about it until today), but if what you're saying is true - then LOL at the headline.

Yup, the SK government has already announced it does not intend to drop the taxes! :)

0 ( +0 / -0 )

Ganbare Japan!Sep. 11  08:21 am JST

South Koreas tit-for-tat trade "retaliation" on Japan, by putting huge import tax on Japanese goods, has failed badly!!

Excellent decision, thanks WTO, THANK-YOU!

^^SK is not compelled to repeal the taxes, and so there will be no repeal. Excellent decision, thanks WTO, THANK YOU!

0 ( +0 / -0 )

"Partial victory" = Japanese for the WTO sided with South Korea. Again^^

0 ( +0 / -0 )

South Korea:” Omona! B..But...Japan has yet to atone for the atrocities committed during WW2! Japan cannot ne trusted! Lets boycott Japanese goods! Let’s built a statue with the leftover pneumatics valves! Let’s make Goryo Great again! “

/S

-2 ( +6 / -8 )

South Koreas tit-for-tat trade "retaliation" on Japan, by putting huge import tax on Japanese goods, has failed badly!!

Excellent decision, thanks WTO, THANK-YOU!

@Ganbare - did you read the article? Case was brought to WTO in 2015.

Plus, see the comment by Samit Basu above..

-2 ( +6 / -8 )

https://www.usnews.com/news/business/articles/2019-09-10/south-korea-to-file-wto-complaint-over-japan-trade-curbs

South Korea Initiating WTO Complaint Over Japan Trade Curbs

South Korea is initiating a complaint to the World Trade Organization over Japan's tightened export controls on key materials South Korean companies use to make computer chips and displays.

-4 ( +3 / -7 )

The WTO threw out 12 of 13 claims made by Japan.

@Samit - Not that I care too much about the valve export issue ( I've never heard about it until today), but if what you're saying is true - then LOL at the headline.

-4 ( +5 / -9 )

But it also threw out some of Japan's claims of alleged breaches.

The WTO threw out 12 of 13 claims made by Japan.

The only Japanese claim the WTO upheld was the error in the formula used to calculate dumping price.

Accordingly, the ROK will continue to levy anti-dumping tariff on Japanese valves based on revised formula in accordance with the WTO ruling.

-5 ( +6 / -11 )

The dispute is over the South Korean side 'misunderstanding' the meaning of the agreement which neutralised any future legal action in 1965. Repeated requests by Japan to honour the 1965 agreement and have the forced labour legal action rejected - on the grounds of that agreement - went ignored.

You don't seem to realize that you are blindly following another one of Abe's fake propaganda. I’ve posted this comment from ex PM Hatoyama before and will post again for latecomers like you. The problem with your comment is that all your previous governments admitted that individual rights to claim were not extinguished by the 1965 treaty. It is the Abe government that has back-flipped on this issue.

"The Japanese government should go back to its judgment that as for the issue of laborers, the individual rights to claim damages were not completely and finally resolved in the 1965 treaty," said Hatoyama, who served as prime minister in 2009-2010.

Hatoyama said that Shunji Yanai, then director of the treaty bureau at Japan's foreign ministry in 1991, told a parliamentary session at the time that the normalization treaty did not put an end to individual rights to damages.

"It was the official view of the Japanese government in the past, that (forced labor issue) was not finally and completely resolved by the treaty," he said.

-5 ( +4 / -9 )

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