Korea to file WTO complaint against US washer safeguard amid tension over steel tariffs

By Shin Ji-hye
  • Published : Mar 11, 2018 - 17:40
  • Updated : Mar 12, 2018 - 08:54

South Korea is preparing to file a complaint with the World Trade Organization after the rejection by the US government of a request to withdraw its safeguard measures on Korean washers, amid intensifying tension over President Donald Trump’s decision to impose tariffs on imported steel products.

The US had previously said it would revise the measure by March 4, if necessary. But the measure remained unchanged despite South Korea’s request to cancel the decision on imposing hefty tariffs on Korean companies shipping more than 1.2 million washers to the US.

Deputy Prime Minister and Minister of Strategy and Finance, Kim Dong-yeon, has sent a letter on Sunday to the US Treasury Secretary, Steven Mnuchin, to request exempting South Korea from steel tariff list, citing the “close bilateral relationship.”

South Korean carmakers and steelmakers have made direct investment to US, contributing to the US job market, wrote the minister, according to ministry officials. The minister also wrote that Washington should exclude Seoul from the list to prevent the US measure from hurting ties between the two, they added. Kim plans to meet his US counterpart at a G-20 finance ministerial meeting set to be held in Argentina later this week.

The Blue House had said last month the government would complain to the WTO if it failed to negotiate with the US for compensation with respect to the safeguard measure. The minister of trade, industry and energy also plans to call on international society to refrain from taking measures that harm free trade at the WTO ministerial meeting and a G-20 finance ministerial meeting.

The move came amid intensifying trade conflicts between the two countries, with South Korean steel, the third-largest exporter to the US, being subjected to additional tariffs.

Tension between the two hit new heights Sunday as Trump exempted Canada and Mexico, calling them important allies for the US.

Trump made it a conditional offer, saying a final decision would be made based on negotiations over the North American Free Trade Agreement, according to a US administration official. NAFTA is an agreement signed by Canada, Mexico and the US creating a trilateral trade bloc in North America.

With the US exempting select countries, experts in South Korea raised concerns on the Korean government’s lack of strategy, saying that as a US military ally Korea should also be exempted from the steel tariffs.

National security adviser Chung Eui-yong met with the US Defense Secretary James Mattis and national security adviser H.R. McMaster on Thursday, calling for the exclusion of Korea and stressing the importance of the alliance between the two nations. Their response was “positive,” according to the Blue House.

But others have urged the government to move cautiously by separating steel tariffs from the washer safeguard case.

The two nations are slated to hold the third round of talks to amend a bilateral free trade agreement at the end of this month.

“Korea should not put the steel issue on the negotiation table for the trade deal. The steel issue was not originally included in the negotiation agenda and the two should be handled separately,” said Choi Won-mok, a law professor at Ewha Womans University.

“If Korea is exempted from the steel tariff at the FTA negotiation table, it will be in a difficult position to demand what it originally wanted from the US,” he added.

Korea’s steel exports to the US stood at $3.2 billion last year, trailing only Canada and Brazil. The volume increased 21 percent from the previous year.

By Shin Ji-hye (