September 3, 2008

South Korea Mulls Filing Complaint With WTO Over Japan’s Punitive Tariff

Text of report in English by South Korean news agency Yonhap

[Yonhap headline: "S Korea Mulls Retaliatory Steps Against Japan's Chip Duties"]

SEOUL, Sept. 3 (Yonhap) - South Korea said Wednesday that it plans to ask the Geneva-based World Trade Organization (WTO) to look into Japan's punitive tariffs on computer memory chips made by Hynix Semiconductor Inc., saying it could take retaliatory measures if necessary.

Japan last week said it would reduce its punitive duties imposed on Hynix chips to 9.1 per cent from 27.2 per cent, and the decision will be effective by 2010, after the WTO ordered the tariff be abolished by Sept. 1. this year.

"It (Japan's decision) is very unsatisfactory and disappointing," Deputy Trade Minister Ahn Ho-young told reporters in a briefing. "We will ask a WTO dispute settlement panel to look into the matter again as early as later this month. Depending on the results, we may consider retaliatory measures."

Since 2003, the European Union (EU), the United States and Japan have levied punitive tariffs on chips made by Hynix, the world's second-largest computer memory chipmaker, claiming that the company was bailed out by state-run lenders in 2002, which amounts to government subsidies.

The EU and the U.S are to repeal their punitive tariffs on Hynix chips this year.

So far, Hynix Semiconductor has paid around US$3 million in excess duties to Japan.

Originally published by Yonhap news agency, Seoul, in English 0449 3 Sep 08.

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