WTO rules in favor of S. Korean shipbuilders
WTO rules in favor of S. Korean shipbuilders
Agence France-Presse, Seoul
The World Trade Organization (WTO) has cleared South Korean shipbuilders of charges that they received illegal subsidies, wrapping up a five-year dispute with European rivals, officials said on Thursday.
A WTO panel issued an interim report Wednesday, rejecting accusations by the European Union that the government-led restructuring of South Korean shipbuilders constituted a state subsidy, the foreign ministry said.
The panel's final report will come out next month, it said.
"The tentative ruling will help us shake off criticism that our shipbuilding industry has grown with state subsidies," a ministry official said.
The dispute erupted in 1999 when European shipbuilders argued that unfair subsidies allowed South Korea to build vessels below cost and helped the country's shipbuilders dominate the global market.
South Korea argued that its industry was simply more competitive.
The country's shipbuilding industry underwent widespread restructuring when the country was hit by the Asian financail crisis in late 1997, with several shipyards bailed out with loans from goverment-controlled banks.
After years of unsuccessful negotiations, the global body set up a panel in July last year. The row also prompted European countries to subsidize their own shipyards.
South Korean shipyards welcomed the WTO's decision saying it would help them to maintain their global leadership.
"We welcome the WTO panel's tentative ruling," an official at the Korea Shipbuilders Association said, adding South Korea would receive record orders this year.
South Korean shipbuilders won 43.5 percent of the global shipbuilding market in 2003, followed by Japan with 28.6 percent, China 12.6 percent and Europe on 8.7 percent.
Despite the rising cost of materials, South Korean shipyards have received record orders so far this year thanks to a rise in demand for high-end liquefied natural gas (LNG) carriers.
In the nine months to September, South Korean shipbuilders secured orders to build 34 LNG carriers, compared with 12 for all of last year.
The private Hyundai Research Institute predicted that the 2005 output of South Korea's shipbuilding industry would rise 15.7 percent from this year.