The European Union has requested to join Japan in an ongoing complaint about alleged subsidies provided by the South Korean government to its shipbuilding industry, the World Trade Organization (WTO) informed.
“The EU notes that the request for consultations relates to a number of alleged export and local content subsidies provided by Korea directly, or through public or private institutions, to Korean shipbuilders or their customers,” the EU said in a statement sent to WTO on November 20.
With a total value of EUR 112.5 billion, the EU represents over 23 percent of the global production value for maritime technology. It produces and exports both ships and maritime equipment such as ship engines and navigational equipment.
As explained by the EU, the measures referred to in the consultation request may have a substantial impact on the price of ships including ship engines and other maritime equipment and affect trade flows in these products. Therefore, the EU said it has a “substantial trade interest” in WTO dispute consultations.
Earlier in November, Japan requested dispute consultations with Korea, claiming that challenged Korean subsidies — including loans, funds, guarantees, insurance and other financings — are inconsistent with the WTO’s Agreement on Subsidies and Countervailing Measures (SCM Agreement) and the General Agreement on Tariffs and Trade (GATT) 1994.
Japan believes that the subsidies distort the market and hinder the resolution of oversupply problems in the industry.