The Korean government is seeking an alliance with members of the World Trade Organization to respond to the US’ protectionist actions and is looking for ways to jointly take action on trade restrictions such as anti-dumping or safeguard measures.

During a trade ministerial meeting at the World Economic Forum that ended Friday in Davos, Trade Minister Kim Hyun-chong said, “Import restriction measures such as anti-dumping and safeguards are used as means of realizing disguised protectionism. If this trend continues, the ultimate victims will be global consumers, entrepreneurs and employees.”

“So such measures should be carried out by strictly abiding by WTO rules,” Kim added at the closed-door meeting, which around 30 trade ministers attended.

At bilateral meetings, Kim also shared his concerns over the US’ protectionism with minister of foreign affairs of Canada, Chrystia Freeland, secretary of economy of Mexico, Ildefonso Guajardo, and EU Trade Commissioner Cecilia Malmstrom, and looked for ways to cooperate with them.

As for Canada, which is proceeding with six WTO complaints with the US regarding anti-dumping and countervailing duties, Korea agreed to actively cooperate as a third party when the matter is related to Korea. Canada also agreed to cooperate when Korea complains to the WTO with respect to the US safeguard measure on Korean washers and solar panels.


 

Separately from seeking the alliance, the Korean government is expected to file a complaint to the World Trade Organization after Feb. 7 over the latest US safeguard measure on Korean washers and solar panels, according to government sources Sunday.

As its first move, the government is slated to file a request for consultations to the WTO under Article 4 of the dispute settlement understanding. The request for consultations is designed for member nations to settle disputes within 60 days before the WTO is involved.

“The government is predicted to deliver the request for consultations both to the WTO’s dispute settlement body and the US side after Feb. 7 when the US safeguard on imported washers and solar panels takes effect,” a source from the Trade Ministry said.

The Korean government, however, sees it as unlikely that the US will make a consensus during the 60 days.

There has been only one case where the US agreed with Korea during the dispute settlement period, out of a total of 11 cases in which Korea has taken US trade issues to the WTO.

If the consultation fails during the period, Korea can ask the WTO to set up a dispute settlement panel. When the WTO is involved, the government believes Korea is likely to win the case.

Trade Minister Kim Hyun-chong said last week, “I believe we can win the case given past wining experiences against the US’ excessive import regulations.” Out of the 11 trade cases against the US, Korea has won eight cases.

However, some industry watchers expressed skepticism about complaining to the WTO as the process takes too long and the US may not enforce the decision even if Korea wins the case.

“Even if Korea wins, the damages inflicted on Korean firms will still be huge because it normally takes two to three years for the WTO to make a final decision. And the US may not enforce the decision as it is not legally binding,” said Moon Byeong-ki, a senior researcher at the Korea International Trade Association.

“What Korean exporters can do in the meantime is to increase production in the US for products sold in the nation or to diversify export markets beyond the US to reduce the risk. Also, the government can continue to persuade the US side that the safeguard will also hurt US consumers and product sellers,” Moon added.

By Shin Ji-hye (shinjh@heraldcorp.com)