Washington has reportedly accepted Seoul’s proposal for the initiation of talks for a suspension agreement on the export of dynamic random access memory (DRAM) chips to the United States.

According to the Ministry of Commerce, Industry and Energy yesterday, the Department of Commerce has agreed to launch negotiations and contacts are being made by officials at the Korean Embassy in Washington.

The initiation of talks creates a unique situation in which the United States is engaging in the suspension agreement negotiations and an investigation by the International Trade Commission (ITC) on alleged subsidies for Hynix Semiconductor.

``It is difficult to tell what the results will be but we will nevertheless make our utmost efforts in both procedures,’’ a ministry official said.

Samsung Electronics is not included in the proposal presented by the ministry since it has been hit with a preliminary countervailing duty of just 0.16 percent, which means that it is likely to be excluded in the final ruling by the ITC.

The proposal reportedly contains a suggestion for the voluntary reduction of Hynix’s export volume of DRAMs to the United States as a precondition to suspend the imposition of the countervailing duty.

Usually, such proposals are based on voluntary initiatives to reduce volume or increase prices but the ministry has apparently suggested only a slashing of shipments to the United States.

Simultaneous with the suspension agreement talks, Washington will be dispatching an investigative team to Seoul this week to meet with Hynix management and officials of its creditor banks.

The proposal for the suspension agreement, which would allow companies to export to the United States without depositing countervailing duties until the final ruling, was made on April 7 as set by regulations.

The regulations call for Washington to respond to the proposal within 15 days (April 14) of the announcement of the preliminary findings (April 1), engage in negotiations within 35 days (May 5), and arrive at a conclusion within 45 days (May 15).

``Even if we are able to reach a suspension agreement by the given date, there is still the ruling by the ITC on July 29. The contents of the agreement, the promised reduction in export volume, becomes automatically void should the ITC find no industrial damage,’’ the ministry official said.

Washington announced on April 1 that Hynix was guilty of receiving subsidies from the government and imposed a countervailing duty of 57.37 percent on its DRAMs.

While the heavy additional tariff would appear to paralyze Hynix, its shipments to the United States are limited as its production facility in Eugene, Oregon meets most of the requirements for the United States.

By: DocMemory
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