Korea vows to defend auto exports as EU opens hybrid car safeguard probe

The Ministry of Trade, Industry and Energy said it will work to protect Korean automakers' access to the European market after the European Commission opened a global safeguard investigation into hybrid vehicles imported from around the world.

The probe, announced on Oct. 30, covers new hybrid passenger cars of up to nine seats, including both hybrid electric and plug-in hybrid models, regardless of whether they can be charged from an external source. It is being conducted under the World Trade Organization's safeguard agreement, which allows countries to temporarily shield domestic industries through tariff increases or import quotas when a surge in imports causes or threatens serious injury.

The commission's stated case is that rising imports of low-priced hybrids have cut the market share and profitability of EU producers and left them with growing inventories, pointing to expanded production in third countries and diverted exports following trade-restrictive measures as the main drivers of the import increase.

The commission will examine whether imports have increased, whether EU industry has been harmed and whether the two are linked, then decide after gathering comments from interested parties and consulting with trading partners whether to impose a measure and in what form. Under EU rules the investigation is to be completed within nine months in principle, extendable to 11 months in exceptional cases, and the commission may impose provisional measures for up to 200 days before a final decision in urgent situations.

Interested parties have 15 days from the notice to register and 21 days to submit written comments, questionnaires or requests for a hearing.

The ministry said it will stay in close contact with Korean automakers to assess how the investigation and any subsequent measures would affect their exports to the EU. It said it will put Korea's position through official comments and bilateral consultations during the EU process and keep talking with Brussels so that the Korean auto industry's access to the European market is preserved as far as possible.