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WTO investigates Japan's compliance over Hynix chips

by on24 September 2008

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Thou shalt not tax


The
World Trade Organization is to investigate whether Japan is complying with a ruling and dumped its import charge on South Korean computer chips.

The WTO has twice ruled against a 27.2 percent charge Tokyo levies on dynamic random access memory made by South Korea's Hynix Semiconductor. It gave Japan until September 1 to bring the tariff in line with international trade rules, and if Japan ignores it this time South Korea would be allowed to embark in trade retaliation against Japanese goods or services.

Tokyo said last month it would reduce the tariff on the DRAM chips to 9.1 percent. But South Korea and Hynix want the duty scrapped entirely. South Korea told the WTO's dispute settlement body that Japan has "engaged in delaying tactics in order to maintain an illegal countervailing duty on imports from Korea for as long as possible."

Japan said it regretted that Korea sought a new WTO investigation, adding that authorities in Tokyo have "scrupulously" followed WTO recommendations. Japan said "it stands ready to vigorously defend its position before the panel."

The South Korean government backed Hynix when it nearly collapsed under debt twice this decade. This resulted in the United States, the European Union and Japan imposing duties on the chips because of what they called unfair practices by the South Korean government.

While the WTO found some of that support illegal, it upheld Washington's 44.71 percent tariff and told Brussels and Tokyo to recalculate theirs. The U.S. Commerce Department "preliminarily" decided to end its duties against Hynix.
Last modified on 25 September 2008
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