WTO sides with Japan on South Korea steel tariffs dispute

Imports and Exports | | MIC Customs Solutions |

The WTO has backed Japan in its dispute with South Korea over steel tariffs.

The World Trade Organization (WTO) has largely sided with Japan in its long-running dispute with South Korea over anti-dumping tariffs imposed on steel imports.

A three-person panel agreed with several of Japan's key arguments that the levies imposed by South Korea on the import of steel bars are excessive, and urged South Korea to take steps to bring its tariffs in line with WTO anti-dumping policies.

Since 2004, South Korea has been adding a tariff of 15.39 per cent on steel bars from Japan, which are used in the manufacture of goods such as auto parts and machine tools. It has argued that imports from across the Sea of Japan are harming its local steelmaking sector.

This was challenged by Japan in 2018 after a review of the policy decided against removing the duties.

The WTO panel agreed with Japan that South Korean authorities had failed to be objective in evaluating the impact of removing the tariffs, and had also rejected data from Japan indicating its producers had switched to higher value-added products.

South Korea has described the outcome of the ruling as mixed, pointing to some aspects of the decision that were in its favor, but has said it will appeal against the ruling.

It is unclear, however, when such an appeal would take place, as the WTO's Appellate Body remains unable to hear cases due to the US blocking the appointment of new judges.

Commenting on the ruling, Japan's chief cabinet secretary Katsunobu Kato said: "We strongly urge South Korea to abolish the tariff, recognized as against the WTO agreement, in accordance with the decision."

According to figures from Japan's Ministry of Economy, Trade and Industry, anti-dumping tariffs imposed by South Korea on steel bars totaled ¥6.9 billion ($66 million) by the end of 2019.

It also noted exports of the materials to South Korea have declined by around 60 per cent since 2002, before the duties were introduced.