Japan set to sue SKorea at WTO over subsidies to shipbuilders
Daewoo Shipbuilding & Marine Engineeringâs shipyard is seen in Geoje, South Korea. Â© Reuters
TOKYO (Kyodo) -- Japan will ask South Korea to launch bilateral talks as early as Tuesday over what it sees as Seoul's unfair subsidies to shipbuilders, but the negotiations will most likely collapse and the dispute is expected to be taken to the World Trade Organization, a government source said Tuesday.
Japan believes that massive assistance provided to the South Korean shipbuilding industry by government-affiliated financial institutions goes against international trade rules.
South Korea has resisted reviewing its subsidy scheme for the industry. If the bilateral talks break down, the case will be brought to a WTO dispute settlement panel.
It generally takes nearly two years for such a dispute to be settled under the WTO framework.
Since 2015, South Korean institutions have provided financial assistance totaling $11 billion to Daewoo Shipbuilding & Marine Engineering Co.
As such supp ort has helped improve its financial standing, Daewoo Shipbuilding has sharply cut prices for its products, putting pressure on its rivals in Japan and elsewhere amid a supply glut in the global shipbuilding industry, according to Japanese officials.
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