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Trade War

WTO sets up panel for Japan-South Korea dispute over steel bar duties

TOKYO (Kyodo) -- The World Trade Organization on Monday set up a panel to settle a dispute between Japan and South Korea over antidumping duties Seoul has levied on imported stainless steel bars for about 14 years, the Japanese government said.

The panel was established at the request of Japan after the countries failed to resolve the dispute through bilateral consultations in August.

At issue is South Korea's placing of a 15.39 percent tariff on Japanese stainless steel bars in order to protect its domestic industry. The levy has been extended twice since 2004, bringing the total imposition to about 4.9 billion yen ($44 million) by the end of June last year.

Following the WTO decision on Monday, a three-member panel will spend about a year looking into the case and compiling a report, according to Japan's Ministry of Economy, Trade and Industry.

Japan has argued that maintaining the tariff for an extended period is against WTO rules, while questioning the rationale behind South Korea's extensions.

Steel bars are used to make bolts, nuts and valves for machinery and cars.

Of South Korea's total imports of stainless steel bars in 2002, before the duties were imposed, Japan's accounted for over 50 percent. But the proportion fell to less than 13 percent in 2016.

When a country judges that an imported product is priced at an artificially deflated level compared to its home market, it can impose an antidumping tariff for five years. Such a measure can be extended as an exception if it is feared that lifting it would hurt the domestic industry.

With Japan and South Korea failing to bridge their differences, Tokyo asked the WTO to set up a dispute settlement panel in mid-September.

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