WASHINGTON, Jun 17, 2003 (AP Online via COMTEX) --
The government of South Korea has unfairly
subsidized computer memory chip manufacturers and should face
penalty tariffs as high as 44.71 percent, the Commerce Department
ruled Tuesday.
The ruling represents a victory for Idaho-based Micron
Technology Inc., the world's second-largest computer chip
manufacturer. Micron had complained that its South Korean
competitors were getting unfair government subsidies that violated
U.S. laws governing trade subsidies and also the rules of the World
Trade Organization.
The Commerce Department ruled in favor of Micron's complaint and
said that it would begin imposing penalty tariffs once the U.S.
International Trade Commission upholds its preliminary ruling that
the government subsidies are harming U.S. companies.
The trade commission is scheduled to make its final
determination of injury on July 31. The Commerce Department said
its final order putting the tariffs into effect would be issued on
Aug. 7.
The Commerce ruling Tuesday will impose a 44.71 percent tariff
on dynamic random access memory semiconductors, or DRAMS, made by
Hynix Semiconductor Inc. The department ruled that another South
Korean-chip maker, Samsung Electronics Co., had received a much
smaller subsidy of 0.04 percent.
The Commerce Department's final determination on the size of the
tariffs represented a reduction from a preliminary ruling in March
that put the Hynix tariff at a higher 57.37 percent and the Samsung
tariff at 0.16 percent.
Trade negotiators from the Bush administration and the
government of South Korea had tried to resolve the dispute short of
imposing tariffs government, but talks on the matter earlier this
month in Paris failed to reach an agreement.
Officials of the South Korean government said last week that if
the Commerce Department went ahead and imposed the penalty tariffs
it would file a case against the United States before the WTO,
arguing that the tariffs, known as countervailing duties, were not
justified under international trade rules.
Last year, in addition to Micron's complaint to the Commerce
Department, Infineon Technologies of Germany filed a similar
complaint with the European Union.
The EU ruled earlier this year that it was considering imposing
a 33 percent tax on Hynix memory chips. The European case was
expected to be finalized on Aug. 24.
Samsung and Hynix, formally Hyundai Electronic Industries, are
two of the world's largest computer memory chip makers and DRAM
chips are South Korea's biggest export item.
South Korea exported $5.97 billion worth of DRAM chips last year
with shipments to the United States totaling $1.94 billion,
representing 32.5 percent of South Korea's chip exports.
Micron, which is the largest private employer in Idaho and also
has facilities in Utah, Virginia, Italy, Japan and Singapore,
blamed part of the $907 million in losses it suffered last year on
the alleged unfair subsidy practices of the South Korean
government.
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