Japan has officially launched a complaint at the World Trade Organization (WTO) over Seoul’s state funding of local shipbuilders after dialogue between the two countries failed to solve the issue.
“The measures in question relate to the development, production, marketing, and/or sale or purchase of commercial vessels, including vessels designed to carry crude oil, liquefied natural gas (LNG), and shipping containers,” Japan’s complaint, filed yesterday, said.
Japan claims Seoul has used “producer support” and “sales support” such as direct financing to keep its struggling shipbuilders in business.
The complaint contains much detail about the recent restructuring of Daewoo Shipbuilding & Marine Engineering (DSME), one of South Korea’s largest yards, which received plenty of state aid to help it through a crisis brought about by an accounting scandal and a huge drop in orders.
South Korea now has 60 days to settle the dispute, after which Japan could ask the WTO to adjudicate.
In 2004, the European Union also took South Korea to the WTO over similar state aid claims.