SEOUL: The World Trade Organisation (WTO) said the United States violated international trade obligations in the way it imposed tariffs almost four years ago on South Korean exports of residential washing machines, according to a ruling published.

       The panel of three trade experts delivered a mixed decision that largely sided with South Korea but rejected some of its arguments as well.

       The panel recommended that the US bring its safeguard measure into conformity with WTO rules.

       The announcement, posted on the WTO website, should benefit South Korean manufacturers Samsung Electronics Co and LG Electronics Inc, if the US agrees to eliminate or modify the tariffs, which are scheduled to expire in February 2023.

       However, the US can appeal the ruling at any point in the next 60 days, a move that would act like a veto because the WTO’s appellate body is not functioning.

       A statement from South Korea’s ministry for trade, industry and energy welcomed favourable rulings on all five of its substantive claims and said the country would try to resolve the issues with Washington as soon as possible.

       The panel’s finding that the US International Trade Commission (USTR) must identify unforeseen developments and tariff concessions that resulted in the increased imports “illustrates our concern that panels may follow past appellate body reports and not apply WTO rules as they are written,” US Trade representative spokesman Adam Hodge said, adding the USTR will review the report and consider its next steps.

       The ITC directed a request for comment to the USTR.

       The dispute dates back to 2018, when then-President Donald Trump imposed safeguard tariffs on imports of large residential washing machines, including those produced by Samsung and LG.

       The duties marked what would prove the start of a series of trade skirmishes with US economic allies and an outright tariff war with China that the Biden administration is taking time to resolve.

       The WTO’s ruling was both a rebuke of the Trump administration’s approach and a reminder of why Trump officials sought to overhaul the WTO – because such disputes can drag on for years and often outlive the problems they were intended to resolve.

       The US duties came in the form of a three-year combined quota and tariff on washing-machine imports that imposed 20% duties on the first 1.2 million and set a 50% tariff on all subsequent shipments.

       At the time, the US said the tariffs were necessary because a surge of foreign washers were being sold at unfairly low prices, which led to significant operating losses for American producers like Whirlpool Corp.

       The tariffs were scheduled to expire in February 2021 but Trump extended them for two more years in one of his final acts as president.

       South Korea argued that the measures violated various provisions of the WTO agreement on safeguards, which permits governments to impose temporary tariffs on imports in the face of trade surges that are shown to harm domestic producers.

       The WTO panel supported Korea’s argument that the US failed to provide a reasoned and adequate explanation in support of its finding of increased imports of washing-machines; failed to maintain a substantially equivalent level of concessions in response to the safeguards; and applied an incorrect price analysis in its calculation of the duties.

       But the trade body also rejected various South Korean arguments regarding the US definition of the affected domestic industry and its finding of serious injury to US producers. — Bloomberg