Korea proposes tariff negotiations with Japan

March 15, 2006 – South Korea has asked to sit down with Japanese officials to discuss a move to levy countervailing duties on DRAM memory chips, possibly a prelude to pushing the World Trade Organization for a ruling on the dispute, according to an Associated Press report.

Japan said earlier this year that it would impose a 27.2% duty for DRAM chip in response to alleged government subsidies. The AP quoted a statement from South Korea’s Ministry of Foreign Affairs and Trade seeking bilateral consultations over the measure, which it says violates the WTO’s subsidy treaty. If a settlement is not reached within 60 days, Korea expects to petition the WTO to resolve the dispute, with a decision possible by 1H07.

Japan’s Ministries of Finance and Economy, Trade, and Industry had investigated complaints from Elpida Memory Inc. and Micron Japan Ltd. since June 2004, and found in October 2005 that Korea’s Hynix Semiconductor did in fact illegally receive government-backed loans. Both the US and EU have imposed similar duties; the WTO upheld the US’ 44% tariff last July, but indicated Europe needed to recalculate its tariffs.


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