WTO largely backs Japan over South Korean steel duties

GENEVA (Reuters) - The World Trade Organization backed Japan in several claims in a ruling on Monday against South Korea's 16-year-old anti-dumping duties on Japanese stainless steel bars.

The three-person WTO panel recommended in conclusion that South Korea bring its measures into conformity with its obligations under the WTO's anti-dumping agreement.

South Korea imposed duties of 15.39% in 2004 on the bars, which are used to make auto parts and machine tools, saying Japanese exporters' dumping hurt its local industry.

Tokyo in 2018 challenged a review carried out by Seoul into whether the measures should remain in place. It believes South Korea failed to show that removing the duties would lead to a resurgence of imports, adding that Japanese producers had also shifted to higher value-added products.

A three-person WTO panel said South Korean investigating authorities had not been objective in evaluating the consequence of the drop in Japanese prices from removing duties and in rejecting certain data submitted by Japanese producers.

South Korea said the WTO panel's findings were mixed, with some aspects in its favour.

It said in a statement that it would appeal against the ruling, although the WTO's appeals body is currently paralysed and unable to hear cases.

The case is among the smaller ones being handled by the WTO, covering less than $4 million of annual exports, South Korea said, although it is now part of a broader trade conflict between the two.

A WTO panel has started assessing a more significant complaint by Seoul against curbs imposed by Tokyo on exports of some key technologies materials to its neighbour.

Bilateral relations deteriorated after South Korea's Supreme Court in 2018 ordered two Japanese companies to compensate wartime workers. The ruling, which Tokyo said violated international law, prompted Japan to introduce the export curbs.

(Reporting by Philip Blenkinsop; Editing by Gareth Jones)