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This summary has been prepared by the WTO Secretariat’s Information and
Media Relations Division to help public understanding about developments
in WTO disputes. It is not a legal interpretation of the issues, and it is
not intended as a complete account of the issues. These can be found in
the reports themselves and in the minutes of the Dispute Settlement
Adoption of reports back to top
When a panel report comes out, it is either adopted by the Dispute
Settlement Body or appealed by one or more parties to the dispute. When
the Appellate Body report comes out, it is automatically adopted by the
DSB — unless there is consensus to reject it — and becomes binding.
Korea — Measures affecting trade in commercial vessels
Korea declared itself satisfied on the whole with the panel report. Korea
commented on the panel's findings regarding the following issues: the
restructuring of certain Korean shipbuilding companies and alleged
subsidies; and the advanced payment refund guarantees and pre-shipment
loans. Finally, Korea said that it need not take any further step to
implement. Korea explained that the loans and guarantees which the panel
found to be subsidies had by now been repaid, or had expired, or were no
longer in effect.
The European Communities expressed its disagreement with some aspects of
the panel's reasoning. The EC also said that it was pleased with the
panel's conclusion that Korea had been providing illegal subsidies to its
industry for many years through loans and guarantees. The EC was
disappointed however that the panel did not support its claim concerning
the subsidization of Korean ship yards through debt restructuring
The EC explained that it had not appealed the panel because it intended to
continue the dialogue with Korea and other OECD Members concerning the
problem of injurious pricing in the shipbuilding sector.
Finally, the EC said that it did expect Korea to withdraw its subsidies
within 90 days, as recommended by the panel.
The United States, as third party, commented on some aspects of the panel
report, including the “mandatory/discretionary” distinction and the
meaning of the phrase “entrusts or directs” in the WTO Subsidies and
Countervailing Measures Agreement.
The DSB adopted the panel report.
meeting back to top
The next regular DSB meeting will
be on 20 April 2005.
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