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To: DJBEINO who wrote (2688)	3/4/1998 11:10:00 AM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

On the part of Hyundai and LG Semicon, the response is one of disbelief Anti-Dumping Duties on DRAMs by US Further Aggravating Ties 03/04 15:48 Tuesday's preliminary decision by the U.S. Department of Commerce to impose heavy anti-dumping duties on Korean chipmakers is seen to aggravate bilateral ties even as they wrangle over the issue at the World Trade Organization. As it stands, Korea and the Untied States are in dispute over color television sets at the WTO and Washington has designated Seoul under Priority Foreign Country Practice of Super 301 for not fully opening the automobile market. While these disputes are certainly putting a strain on trade relations between the two countries, the latest decision is more sensitive in that a major portion of Korean exports of semiconductors heads for the United States. In particular, some 30 percent of all dynamic random access memory chips fabricated and processed in Korea are destined for the American market which was valued at well over $4 billion last year. And the ruling, industry officials said, is adding insult to injury as Korea struggles to remain afloat under in a time of acute shortage of foreign currency. ''Should there be clear evidence that the evaluation of the Department of Commerce is skewed, the government could act on behalf of Korean chipmakers if requested to do so,'' said Han Young-soo, director general for processed goods at the Ministry of Industry and Energy. On the part of Hyundai Electronics Industries and LG Semicon, the response is one of disbelief, especially since the two companies have been imposed with anti-dumping duties of less than 0.5 percent the past three years. In some ways, said HEI's Lee In-chang, the decision could be political since the semiconductor issue is currently pending at the WTO. Korea asked for the establishment of a panel under the dispute settlement body. He said, ''We will have to wait and see what the detailed contents of the ruling are but the latest development in the Korean market is making things exceptionally difficult for us.'' What he was referring to was the sharp depreciation of the Korean won against the dollar, which puts the entire picture in a different light since a number of factors other than price are taken into consideration in the ruling. While the sales price is for between May 1996 and April 1997, Washington evaluated the research and development expenses, interest allocation and the depreciation of assets such as manufacturing equipment. ''We are in a tough position also because the collapse of the Korean financial market has led foreign governments and companies to place little confidence in our financial statements,'' Lee explained. As things stand, the two companies will have 30 days after the details of the ruling are posted on the Federal Register to hand in written statements on their positions on the issue. An LG official said they will be making their utmost efforts to pull the preliminary anti-dumping duties down to less than 2 percent but the complex situation involving the dispute at the WTO could make things difficult Korea took the United States to the WTO for bilateral consultations after Washington refused to take the two companies off its list of firms facing annual anti-dumping reviews, which are costly and time-consuming. Seoul requested the formation of a three-man panel under the dispute settlement body in Jan. 16 to deliberate over the issue but objections from the two sides have hampered the process. ''Basically, each country is seeking to place someone who will act in their favor. The secretary general will soon be called to appoint the panelists if the two countries cannot reach a compromise'' he said. One interesting aspect of the developments concerning the semiconductor dispute is that the final ruling, each by the International Trade Commission and the panel, is expected at around the same time in June or July. ''What will become of the two disputes remains to be seen but one thing for certain is that Korea cannot sit idly by since the outcome could have a devastating impact on Korea's exports,'' one industry official observed