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Hynix Wins WTO DRAM Dispute over the U.S.

Hynix Wins WTO DRAM Dispute over the U.S.

1. The final panel report on the WTO U.S.-Hynix DRAM Dispute, which the disputing parties received last December, was officially distributed to the WTO members on February 21, Geneva time. The panel asserted that the creditors¡¯ assistance to Hynix for restructuring is inconsistent with the subsidies under the WTO Subsidies and Countervailing Measures (SCM) Agreement and therefore, concluded that the U.S. was in violation with the SCM Agreement to impose countervailing duty on Hynix imports.

2.

A. Through the panel¡¯s ruling, the legality for the U.S. to sustain countervailing duty has been forfeited, allowing Korea to request the U.S. for a complete nullification of countervailing duty on Hynix DRAM products.

- Above all, this ruling is expected to have positive impacts on the EC-Hynix DRAM Dispute, which is currently in process, as well as the countervailing duty investigation on Hynix DRAM products by Japan, which was launched in August 2004.

¡Ø The Japanese authorities plan to promote an investigation in Korea from February 22 till March 4.

B. Also, in regards to the ruling, Korean companies will be able to export their products on more liberal conditions within the global arena hereafter and block the U.S., EC, Japan, etc. from imposing countervailing duties on companies under restructure or filing a complaint to the WTO in the future regarding the corporate restructuring measures of the Korean government after the 1997 financial crisis.

¡Ø For instance, in accordance to the request of the U.S. paper industry, the U.S. government had raised the subsidy issue regarding the Korean paper industry at the bilateral negotiations as well as the WTO Committee on Subsidies and Countervailing Measures but did not further discuss the issue after the panel¡¯s ruling of the DRAM dispute last year.

3.

A. The panel report was expected to be presented before the WTO Dispute Settlement Body on March 21. However, the U.S. filed a complaint on the panel¡¯s ruling shortly after the distribution of the final panel report on December 21, 2004 and has already expressed their intention to appeal. Therefore, an appellate body will be created and is expected to come to a conclusion by the end of June.

B. The Korean government acknowledges the huge impact of the panel¡¯s ruling on the Korean economy, especially on the overall export industry, and hence, will do its utmost to preserve the ruling during the appellate review.

Spokesperson for MOFAT


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