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Fri, May 16, 2003 - Page 12 News List

Negotiators locked in eleventh-hour memory-chip talks

AFP , WASHINGTON

As their two presidents girded for a White House summit, US and South Korean trade negotiators were locked in talks Wednesday as a deadline loomed in a dispute over US anti-dumping duties on South Korean memory chips.

South Korean President Roh Moo-hyun met senior US economic leaders before his encounter with US President George W. Bush, and negotiators from both sides grappled with the chips row in talks in Paris.

Seoul is seeking a deal to suspend US tariffs in return for a cut in dynamic random access memory (DRAM) chip shipments to the US, said a statement issued from Roh's traveling office here.

"With the deadline set for May 16, working-level negotiations between both countries have been underway in Paris since May 13," the statement said.

Roh met US Secretary of Commerce Donald Evans and US Trade Representative Robert Zoellick to "exchange opinions to smoothly settle major pending issues" of trade, the statement said.

The talks did not get down to specifics, but Roh promised to create a better environment for foreign businesses in South Korea, said Roh's chief economic aide Kwon Okyu, who attended the consultations.

The chip row flared up after a US Department of Commerce preliminary ruling issued last month that found South Korea's ailing Hynix Semiconductor Inc benefited from unfair government subsidies.

The ruling called for countervailing duties of 57.37 percent on chips shipped by Hynix.

South Korea has threatened to file a grievance at the WTO.

The accusation focuses on a series of South Korea's rescue packages -- including emergency loans, debt rollovers and tax benefits -- to help Hynix stay afloat.

But South Korean officials have denied any government role in Hynix bailouts, saying decisions were made by creditors. They say the government, which was forced to buy holdings in some fragile banks during the Asian financial crisis in the late 1990s, seeks to sell off its stakes.

The US preliminary ruling requires Hynix to deposit US$25 million every month in temporary duties for its US shipments of DRAM chips, pending a final ruling in July.

Following the US suit, the EU decided to slap a 33-percent tariff on Hynix memory chip imports over the alleged state subsidies.

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