WORLD TRADE  
ORGANIZATION  G/SCM/Q2/KOR/28 
13 November 2006 
 (06-5468) 
Committee on Subsidies 
and  Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions from the UNITED STATES  
Regarding the New and Full Notification of the REPUBLIC OF KOREA1 
 
  The following communication, dated 10 November  2006, is being circulated at the request of 
the Delegation of the United States. 
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I. FISHERIES SUPPORT FOR OLD FI SHING VESSEL AND EQUIPMENT 
REPLACEMENT 
1. Is there any limit on the capacity of the new replacement vessels? 
 
2. What happens to the old fishing vessel and equi pment?  Is there a requirement that they be 
scrapped?   S
UPPORT FOR VESSEL DECOMMISSIONING  
 
1. When will the subsidization period for deep sea fisheries end?   2. Please explain what happens to the decommissi oned fishing vessels?  Is there a requirement 
that the decommissioned vessels be scrapped?  
L
OCAL TAX REDUCTION FOR BUILDING AND ACQUISITION OF INTERNATIONAL LINE VESSELS AND 
DEEP SEA FISHING  
 1. Can the same fisherman receive a benef it under this programme and the two programmes 
noted above? 
 
2. We note that the duration of this programme  is until 31 December 2006. Will this programme 
be replaced by another programme  providing similar benefits?  
 O
THER FISHERIES PROGRAM MES 
 
1. In 2003, the Korean government announced that  a ten-year plan to support Korea's fishing 
sector had been developed by the Ministry of Mar itime Affairs and Fisheries.  Could Korea please 
provide further details of this plan and describe how it relates to the support programmes notified and 
any other support programmes not notified? 
                                                      
1 G/SCM/N/123/KOR G/SCM/Q2/KOR/28 
Page 2  
 
  2. Article 24 of the Framework Act on Marine Fishery Development states in part that the 
government will devise and implement policies requir ed for the expansion of harbour facilities and 
fishing port facilities such as the construction of ha rbour and fishing ports.  Please explain why this 
program was not notified.  During the reporting period of 2003 and 2004, what was the amount of 
funds spent on developing fishing port facilities?  
 
3. Article 29 of the Framework on Marine Fish ery Development states that the Minister of 
Maritime Affairs and Fisheries may render support required for the development or industrialization 
of new technologies related to marine developmen t.  Please explain why this programme was not 
notified and provide the amount of government f unds spent on new technologies for the fisheries 
industry during the reporting period of 2003 and 2004. 
 
II. GENERAL 
 Certain publicly available information i ndicates that Korea may maintain subsidy 
programmes that meet the requirements for notifi cation under Article 25.  Please explain why all the 
programmes listed below have not been notified.  If they do qualify as programmes that should be 
notified, and to the extent they have not yet b een notified, please provide the information required 
under Article 25.3 of the SCM Agreement and othe r programme-specific information as requested 
below.  
FUNDS TO PROMOTE INFORMATION TECHNOLOGY VENTURE AND PROJECTS 
 1. The Ministry of Information and Communica tions administers a programme titled "Funds to 
Promote Information Technology Ventures and Projects".  During the years 1993 to 2003, over 7 trillion won from this Fund was spent in the development of Code Division Multiple Access 
"CDMA and semiconductor technology. 
 2. The Ministry of Information and Communi cations also administers a programme titled 
"IT839 Strategy".  Please provide a description of the IT839 Strategy and its relationship, if any, to 
the Funds to Promote Information Technology Vent ures and Projects programme.  In addition, please 
provide details on the funds provided to support the IT839 Strategy during the 2003-2004 notification 
period.   
 N
EXT-GENERATION GROWTH ENGINES  
  It is our understanding that Korea has provide d R&D funding to promote the development of 
Korea's Next-Generation Growth Engines.  In G/SCM/Q2/KOR/25 dated 19 October 2004, in 
response to a question from the United States on Korean government R&D funds to the "Next-
Generation Growth Engines" earmarked for the de velopment of next-generation semiconductors, the 
Korean Government responded that it is "still unclear  whether the programs could be put into action 
and how much would be allocated for them".  Sinc e the date of that response, the FY 2005 budget was 
passed by the National Assembly and 2,358 billion w on has been allocated for the Next-Generation 
Growth Engines.  The Korean Government has al so identified Next-Generation semiconductor chips 
is one of the ten "growth engines".    S
UPPORT FOR SUBSIDIES FOR RELOCATING FACTORIES  
 
1. According to a local government website  
(www.provin.jeonbuk.kr/english/ contents.html?fid=26&sid=60) , subsidies are provided to companies 
that relocate factories.  Under this programme, it  appears that funds equal to three percent of 
construction costs will be provided to companies that relocate factories.     G/SCM/Q2/KOR/28 
 Page 3 
 
 
  2. According to a local government website, th e Ministry of Construction and Transportation 
has established a Company Relocation Support Centre in order to provide relocating companies with 
details on loans and tax assistance available to comp anies relocating to local regions or investment 
zones outside of the national capital region  
(www.provin.jeonbuk.kr/english/ contents.html?fid=26&sid=59 ).  Please provide details on the 
lending programmes available to companies that are relocating to local regions from the Korea 
Development Bank Fund, Industrial Foundation Fund, Korea Credit Guarantee Fund/Korea 
Technology Credit Guarantee Fund; SME Manage ment Stabilization Fund; and the Local SME 
Nurturing Fund.  Furthermore, please provide a comp lete description of the types of tax benefits 
available to companies relocating to local regions or outside of the national capital region.      
 
ASSISTANCE TO THE TEXTILE INDUSTRY  
 1. In a Ministry of Commerce, Industry and En ergy 2001 White Paper, the government created a 
plan for the development of "next-generation" fibres.   The plan called for the investment of 9 trillion 
won of government funds during the years 2001 through 2005.  Under this plan, a Technical Centre 
for Industrial Textiles was to be established at the Ko rea Institute of Industrial Technology in the city 
of Cheonan.  Please provide a description of the plan for the development of "next-generation" 
textiles.  Furthermore, please provide the amount of  government funding provided under this plan or 
provided to the development of "next-generation" fibres during the notification period of 2003 and 
2004. 
 
2. In a 27 December 2002 press release titled "The  New face of Textile a nd Fashion Industry", 
the Ministry of Commerce, Industry and Energy  announced details on a number of programmes 
enacted to promote the development of the Korean  textile industry.  Please provide the amount of 
government funds provided during the notificati on period of 2003 and 2004 for each of the 
programmes referenced in this press release.  In addition, please explain whether funds are provided 
to companies, trade associati ons or research institutes. 
 3. In November of 2005, the Ministry of Co mmerce, Industry and Energy announced a "Vision 
and Development Strategy for Tex tile and Apparel Industry for 2015" .  Please provide the details and 
objectives of the "Vision and Development Strate gy for Textile and Apparel Industry for 2015", 
including the amount of government funds provided during the notification period of 2003 and 2004.  
Please explain the relationship between the te xtile development program announced in 
December 2002 and this N ovember 2005 announcement. 
 
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