Korea, EU shipbuilding relations worsen with counter suit at WTO

Shipbuilding matters between Korea and the EU have not met any satisfactory solutions.

The EU shipbuilding industry and executive committee asserted that Korean shipyards have achieved rapid growth through low prices in world shipbuilding markets through the help of government subsidies (including debt cuts, debt for equity swaps, tax cuts, and export credits). The Korean government and EU executive committee made an shipbuilding agreement with each other in June 2000, and searched for an amicable settlement three times in July, September, and October of 2000. The negotiations, however, came to a standstill that brought the EU to force Korea into accepting a cost analysis model, where the Export-Import Bank of Korea may lend financial aid only if Korean shipbuilders receive orders above manufacturing costs.

Related to this, the EU executive committee inspectors visited Korea between March 5 and 21, 2001, and conducted an actual investigation into government departments, banks and shipyards. for the suit at the WTO is expected to take place in May.

Against this, Korea is considering counter suing the EU for its subsidy to the WTO in preparation of the EU's WTO suit.