The report on an Indian Web site>www. keralanext.com cited an unnamed U.S. trade official in Washington as its source.

As had been expected, a WTO dispute panel, in a final report, said the United States had not proved its claim the South Korean government had subsidized Hynix. The U.S. trade official was reported as saying that the United States would appeal this ruling.

"Some of the statements I've seen coming out of Korea are misleading and exaggerate the state of play," the report quoted the official as saying. "To presume that these tariffs at the end of the day will be removed, I think, is a significant overstatement," the report also quoted the official as saying.

Even if the appeals panel also rules for South Korea, the United States would have the option of presenting more evidence, according to the report, which attributed this position to the US official.

"We believe [that] may well give [the Commerce Department] an opportunity to clarify its record in such a way that would meet the panel's requirements," the report quoted the U.S. official as saying.

Hynix has been subject to 18 months of countervailing duties imposed on exports of its DRAMs. The United States set a tariff of 44.71 percent n 2003 and the Europe Union set its tariff at 34.8 percent in the same year.

The argument that persuaded the respective authorities to impose the countervailing tariffs was that the transfer of massive debts built up by Hynix at state-run banks and then converted into equity holdings represented a form of illegal subsidy that runs against WTO agreements to which Korea is a signatory.

As the United States and Europe are not large consumers of DRAMs these countervailing duties appear not to have had a major commercial impact on Hynix although at the beginning of 2004 reports said that the Japanese government was considering countervailing duties of up to 40 percent on DRAMs manufactured by Hynix.

By: DocMemory
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