Friday, January 20, 2006
Japan has decided to impose import duties of 27.2 percent on DRAMs made by South Korea’s Hynix Semiconductor Inc., online reports said Friday (Jan. 20) citing the South Korean and Japanese governments as their sources. The tariffs are a response to alleged government subsidies to Hynix. The move was expected as Japan had already said in October 2005 that it had arrived at figure of 27.2 percent as the level of import duty to be levied on DRAM chips made by South Korea’s Hynix Semiconductor Inc. should it choose to proceed.
Talks were expected to follow that announcement but have apparently yielded no alternative way forward. In choosing to impose the tariffs Japan has followed a line previously taken by the U.S. and Europe.
The move has reportedly prompted hints that it could spark a broader trade dispute between South Korea and Japan. South Korea has also said it plans to take the imposition of tariffs to the World Trade Organization as it did Europe and the U.S., the reports said.
Although the U.S. and Europe imposed higher tariffs, at 44 and 33 percent respectively, the relatively low volume of DRAM-intensive manufacturing in those locations, particularly in Europe, made these tariffs of low significance. Japanese import duties of 27.2 percent would likely halt the sale of Hynix DRAMs into Japan, the reports said.
The South Korean Ministry of Commerce, Industry and Energy said Japan had concluded that Hynix received government subsidies for export of DRAM chips and had decided to levy tariffs of 27.2 percent over the next five years starting from Jan. 27, according to a Digital Chosun, report.
“The decision will have negative effects on the overall trade and industrial relationship between Korea and Japan as well as on the semiconductor industry,” the reported quoted the ministry as saying. The report also quoted Hynix describing the decision as “unreasonable and disappointing,” saying it was based on arguments from Japanese businesses.
Hynix is considering legal action in Japanese courts, the report added.
The Japanese government started investigating in June 2004 whether to impose tariffs on DRAM chips made by Hynix. Japan followed the United States and the European Union in considering whether the conversion of enormous debts run up in the first part of the decade into equity stakes by banks and investors constituted the propping up of a failed company and amounted to illegal South Korean government subsidies.
The U.S. and Europe imposed tariffs in the 44.7 percent and 33 percent ranges, respectively, although these were contested before the World Trade Organization by South Korea. The WTO overturned its own ruling against the U.S. tariffs in June 2005, which apparently gave Japan a green light to press its case against Hynix.
By: DocMemory
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