Guardian of Enterprises
in the Age of FTAs

Korea's opening to the world has accelerated with the simultaneous free trade agreement talks with the EU, India and Canada. The need for securing stable export markets to continue to expand trade is clearly seen through the FTAs Korea has concluded as part of its full-fledged effort to open its doors to foreign trade. The expansion of its foreign trade is paramount for the country to achieve $1 trillion in international trade and continuous economic development as a country whose dependence on foreign trade exceeds 70 percent, firmly establishing it as a key foreign trade country in the world.
With the country's opening to foreign goods and services picking up pace, the chance that domestic businesses will sustain damage from an excess of foreign goods imports is increasing.
The Korea Trade Commission has been utilizing the legal trade remedy system within the World Trade Organization to prevent the damage and, if damage has already incurred, take action to be reimbursed for the damage.
The WTO introduced the age of the rule of law in international trade by instituting fair trade models and the systematic trade conflict resolution system, which prohibits one-sided retaliatory action. An economy liberalized by the WTO, FTAs and other measures has lowered non-tariff trade walls substantially, but the competition in the domestic market has intensified with the inflow of imports of cheap products from China.
Since the prohibition of high tariff rates, subsidies, difficult confirmation processes and direct and indirect industry protection measures, the governments can't do much, except to take anti-dumping and other measures that come after transactions have already been completed. The system's effective management has become increasingly important under the given situation.
The trade relief system is designed to limit imports of certain goods that hurt the domestic market and charge countervailing duties, which is guaranteed by GATT and the WTO, but is different from the "Super 301"of the U.S. Trade Law.
Korea's trade relief system includes an anti-dumping system, countervailing duty system and safeguard system, unfair trade investigation system and the investigation of WTO regulation violations system.
Trade relief measures taken by the KTC include 167 anti-dumping charges after 1987 with anti-dumping duties levied in 87 cases. In the case of unfair trading transactions, the KTC received 33 complaints and took action on 22 cases. In the case of the intellectual property law violations, 261 complaints were received and the KTC took action on 81 cases.
Anti-dumping measures successfully implemented include anti-dumping duties of 24.9 percent levied against batteries from China and Japan based on charges filed by Rocket Battery in 2000. Rocket Battery's sales more than doubled from 11.3 billion won to 25.6 billion won after the anti-dumping duties were charged.
In 1997, anti-dumping duties were levied against H-shape steel imports from Russia, resulting in the recovery of INI Steel's operation after the slowdown of H-shape steel imports.
In the case of Hyundai Heavy Industries, the shipbuilding company raised a complaint against imports of industrial robots from Japan in July 2005, and the KTC levied from 4.51 percent to 10 percent anti-dumping duties on robots for the next five years, which restored the shipyard's competitive edge.
The KTC conducted a countrywide publicity campaign to help SMEs understand its role, especially in regard to the trade relief system. The commission extensively relied on newspapers, TV, the Internet and radio to familiarize SMEs with the trade relief system. It also set up a portal site on the Internet (www.ktc.go.kr). It has also been operating mobile consultations on trade relief measures, analysis of trade trends, an early warning system and an online complaint system in a positive as well as diversified manner to help the nation's businesses understand how to file trade complaints. nw

Kim Shin-jong
Standing Commissioner
Korea Trade Commission,
Ministry of Commerce, Industry and Energy