Japan Initiates Second WTO Dispute Action Against South Korea

Japan has formally requested World Trade Organization (WTO) dispute consultations with South Korea regarding alleged subsidies provided by the Korean government to its shipbuilding industry.

Japan claims the challenged measures, which include funds, loans, guarantees, insurance and other financing, are inconsistent with the WTO's Agreement on Subsidies and Countervailing Measures (SCM Agreement) and the General Agreement on Tariffs and Trade (GATT) 1994. 

In particular, Japan is citing the financial assistance provided to Daewoo Shipbuilding & Marine Engineering in 2015.

Japan filed a similar petition in November 2018, but the issue was not resolved in subsequent talks. South Korea's Ministry of Trade, Industry and Energy believes the measures it took in 2015 are consistent with international practice.

Japan and South Korea now have 60 days of consultations to settle the dispute. If the issue is not resolved, Japan can then ask the WTO to adjudicate. 

China topped global shipbuilding orders in January, according to Clarkson Research Services, with South Korea second and Japan third. China also has the largest order backlog, with 26.32 million CGTs, followed by South Korea with 22.03 million CGTs, and Japan with 11.32 million CGTs.