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The World Trade Organization General Council in Geneva, Switzerland, on July 24.
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Observers point to decisions’ potential influence on current trade dispute
The World Trade Organization’s (WTO) final decision in a dispute between South Korea and Japan over pneumatic valves is likely to be announced next week. Some expect say this decision could be another source of conflict in the two countries’ smoldering trade dispute, which was ignited when Japan tightened restrictions on exports to South Korea. On Sept. 19, the WTO’s appellate body is expected to distribute its report about the South Korean government’s decision to impose anti-dumping duties on Japanese-manufactured pneumatic valves. The dispute over pneumatic valves, which are used in the areas of automobiles, general machinery, and electronics, began in 2015. At the time, the South Korean government slapped anti-dumping tariffs of 11.66-22.77% on Japanese-made pneumatic valves, arguing that Japanese companies were dumping the products on the South Korean market to put pressure on the prices of South Korean products. In 2016, the Japanese government filed a complaint against the South Korean government with the WTO. The WTO dispute settlement panel reached the initial decision in the lawsuit in 2017. At the time, South Korea’s Ministry of Trade, Industry and Energy reported that the WTO had found that South Korea’s measures were in compliance with the WTO’s anti-dumping agreements in 10 of 13 instances under dispute. The ministry concluded that South Korea had prevailed on the main issues. Dissatisfied with this ruling, Japan took the matter to the WTO’s appellate body, its second and final adjudicating body. It’s uncommon for the WTO appellate body to reverse decisions by its dispute settlement panel. This past April, however, it did overturn the lower panel’s ruling and favored South Korea in a dispute about importing marine products from Fukushima and nearby areas. Even if the appellate body upholds the earlier decision, the conflict isn’t likely to end. In that earlier decision, the WTO agreed with Japan about the inadequacy of some aspects of the South Korean government’s analysis of Japanese products’ effect on prices in the domestic market. However, the lower panel did find in favor of South Korea’s conclusion that Japan’s dumping behavior had harmed South Korean industry, asserting that Japan had failed to demonstrate that the South Korean government’s dumping decision had violated WTO agreements. “Since the WTO offered somewhat different judgments on each point, Japan is also claiming that it won the lawsuit,” a South Korean government official said. Japanese newspaper the Nihon Keizai Shimbun reported on Sept. 6 that the Japanese government is planning to make the case overseas that South Korea violated WTO agreements even if its arguments are only partially acknowledged by the WTO’s appellate body. By Cho Ki-weon, Tokyo correspondent Please direct comments or questions to [english@hani.co.kr]
