Japan wants talks to see if S. Korea violated trade rules to rescue shipbuilder

By Lim Chang-won Posted : November 6, 2018, 18:14 Updated : November 6, 2018, 18:14

[Daewoo Shipbuilding & Marine Engineering]


SEOUL -- Japan has called for bilateral talks to see if South Korea violated international trade rules by providing subsidies to its struggling shipbuilding industry, the South's foreign ministry said.

Usually, such bilateral talks come before a country files a complaint with the World Trade Organization (WTO). South Korea maintained a lukewarm attitude over accusations that excessive state subsidies have been used to rescue Daewoo Shipbuilding & Marine Engineering, one of the country's three top shipbuilders.

"As long as I know, Japan has proposed bilateral discussion," Foreign Ministry deputy spokesman Kim Deuk-hwan told reporters Tuesday.

Daewoo Shipbuilding has been under a rehabilitation program by creditors since the ailing shipyard was kept afloat with a massive injection of state money to ease its liquidity crisis caused by dwindling orders and a prolonged business slump.

Initially, experts suggested Daewoo Shipbuilding should separate its defense section or merge with competitors to rehabilitate South Korea's embattled shipbuilding industry. However, policymakers refused to do so, fearing a backlash from labor unions, politicians, provincial government officials and voters.

 
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