South Korea charges RP before WTO with unfair trade practice

South Korea is lodging a formal complaint against the Philippines before the World Trade Organization (WTO) after the government ruled against 10 Korean resin exporters for dumping polymers into the country.

A top government official revealed yesterday that South Korea is accusing the Philippines of unfair trade practices before the WTO when it imposed a five-year dumping duty on imported polypropylene (PP) resin from South Korean exporters.

According to the official, South Korea’s WTO complaint would be filed on top of its formal move to appeal the decision of the Philippine Tariff Commission, arguing that there could not be dumping of resins into the Philippines since imports have already started to go down.

The case was originally filed and won by the Gokongwei-owned JG Summit Petrochemical Corp. and Petrochemicals Corp. of Asia-Pacific against Korean companies that have been dumping PP resins into the country since 1998, selling their products 10 to 40 percent cheaper than the domestic price in Korea.

Penalized for dumping were 10 PP Korean exporters led by LG International and Hyundai, two of Korea’s most diversified chaebols. The other eight were Dae Lim, Hanwah, Jinwon Trading, Kolon, SK Global, Sekitoku, Sewon and Hyosung.

During the period covered by the anti-dumping protest, these 10 companies accounted for over 50 percent of the country’s total PP imports.

PP resin is used as raw material for the manufacture of plastic products like sacks, bags, ropes, furniture, appliance casings and packaging.

According to the official, however, South Korea was appealing this decision and charging the Philippines with imposing barriers to trade by using the anti-dumping law as a legal cushion.

Should South Korea win its case at the WTO, the Philippines could face sanctions for unfair trade practice, including the lifting of the dumping duty on imported resins.

In its decision, the commission said it confirmed that the Korean companies dumped PP resins into the country in1998 and "caused material injury" to the Philippine petrochemical industry by selling their exports at prices lower than PP prices in Korea by $10 to $150 per metric tons.

According to the commission, PP shipments coming from the 10 Korean companies would now be slapped with anti-dumping duty ranging from $10 to $150 per metric ton depending on the source. This would be over and above the 15-percent tariff on PP imports.

JG Summit and Petrocorp’s anti-dumping petition was the second of two cases elevated by the Bureau of Import Services (BIS) of the Department of Trade and Industry (DTI) to the Tariff Commission which resolves dumping cases.

The initial findings of the DTI indicated that resins from South Korea were being dumped into the country at $450 to $600 per ton. This was $111/ton less than their domestic price in Korea.