Korea won a dispute with the United States over whether the washing machine safeguards (emergency import restrictions) were compatible with the World Trade Organization (WTO) agreement. It is the first time in four years since the United States implemented safeguards against foreign washing machines in 2018.

Although the United States can appeal the ruling, it is expected that the abuse of safeguards will be stopped in the future.

According to the Ministry of Trade, Industry and Energy on the 9th, in a panel report circulated the previous day (local time), the WTO ruled in favor of the South Korean government, who filed the case by judging that the US washing machine safeguards were inconsistent with the WTO agreement.

The US government has been enforcing washing machine safeguards since February 2018, accommodating the claims of the domestic industry that imported washing machines are suffering serious damage. In fact, it is a measure aimed at Samsung Electronics and LG Electronics. It was extended once after three years of enforcement, and from this month to February of next year, 14-30% of tariffs on 1.2 million quota of washing machines and 0-30% of tariffs on 130,000 quota of parts are applied.

The Korean government reported that the US safeguards were inconsistent with the WTO agreements and filed a complaint with the WTO in May 2018. In this panel decision, the Korean government obtained a verdict of illegality in all five key issues related to the nature of safeguard measures.

If the US accepts the decision as it is, the dispute will end and the safeguards may be lifted. However, since it takes about a year to complete the dispute resolution process, the safeguards are expected to be applied until February next year. Conversely, in case of appeal, the state of dispute continues. Chang-hyeon Yoon, Minister for Trade and Justice Policy at the Ministry of Trade, Industry and Energy, said, “With this panel decision as an opportunity, we plan to make efforts to end the US washing machine safeguards early and to actively utilize the WTO dispute resolution procedure to protect the interests of our industry.”

Author: MI Asian Staff