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To: Yiota who wrote (23041)	11/18/1998 8:47:00 PM
From: goldsnow	Respond to of 116762

S Korea denies it's using IMF funds to cut prices EC claims it is undercutting European prices in shipbuilding by 30% OUTH Korea yesterday denied accusations by the European Commission that it is using aid from the International Monetary Fund to undercut prices in shipbuilding. "We could not use it that way if we wanted to," said Choe Yong Jin, a deputy director of the foreign ministry's European trade team. On Monday, European Union officials said Commissioner Martin Bangemann had told EU industry ministers that South Korean shipyards were undercutting European prices by up to 30 per cent. Mr Bangemann told a regular EU ministerial meeting he believed South Korea was using IMF funds to bolster its industry's competitiveness, the officials said. South Korea was forced to turn to the IMF for a record US$58 billion (S$94.8 billion) last year after a foreign exchange crisis brought the country to the edge of national default. The aid was granted to help build up the country's depleted forex reserves. Although South Korea supported the shipbuilding sector in its early stages, the government has currently stopped all direct and indirect forms of financial support to the sector. Big players in the South Korean shipbuilding industry include Samsung Heavy Industries Co Ltd, Daewoo Heavy Industries Ltd, unlisted Halla Heavy Industries and Hyundai Heavy Industries Co Ltd. Last year, the EC proposed ending operating aid to the struggling sector after 2000. The commission said all operating aid should end after a transitional period, regardless of whether a deal brokered within the Organisation for Economic Cooperation and Development to cut most state support comes into force. Current EU rules allow governments to grant their shipyards aid up to 9 per cent of a contract's value. The transitional period would allow operating aid for a further two years, until end-2000. South Korea, one of the world's largest shipbuilders, has together with the US, refused to ratify an OECD agreement limiting aid to the sector. -- Reuters business-times.asia1.com.sg