(Associated Press via NewsEdge) The World Trade Organization (WTO) set up a panel to judge a dispute over Japan's punitive tariffs on South Korean computer chip exports.
South Korea asked the World Trade Organization to step in after the two sides were unable to reach a solution in bilateral negotiations.
Japan in January imposed import duties of 27.2% on DRAM chips made by South Korea's Hynix Semiconductor, accusing the company of selling them in Japan at below-cost prices.
'Japan failed to demonstrate the existence of a financial contribution by the government of Korea,' South Korea said in a statement to the WTO's dispute settlement body. 'Japan also failed to demonstrate that a benefit was conferred on the Korean manufacturer.'
Japan countered that South Korea failed to indicate sufficiently the legal basis of its complaint.
'In any event, we are certain that the panel will find that the countervailing measures against the subsidies regarding DRAMs from Korea comply with the WTO agreements,' said Japan's statement to the DSB.
The tariffs apply for five years to DRAM chips manufactured in South Korea. The chips are widely used in personal computers and are Hynix's mainstay product.
It is the first tariff Japan has imposed to counter alleged subsidies by a foreign government.
c 2006 The Associated Press