The government is considering filing a complaint with the World Trade Organization against South Korea alleging that it unfairly subsidized shipbuilders and caused excessive price competition in the global market, sources with knowledge of the plan said Monday.
The move comes after South Korea has provided since 2015 a total of $11 billion in financial assistance to Daewoo Shipbuilding & Marine Engineering Co. through government-affiliated financial institutions, the sources said. With the assistance improving its financial standing, the company began sharply cutting prices on its products, they added.
In January Japan sent a document asking South Korea to correct its practice, which Tokyo believes is against WTO rules. But South Korea responded that the financial institutions provided assistance based on their own judgment, according to the sources. In response, Japan is considering filing a request with the international trade body to begin bilateral consultations with South Korea over the issue. If their talks break down, the case will be brought to the WTO's dispute settlement panel.