1. On May 21, 2002, the Government of the People's Republic of China announced temporary safeguard 
measures on 9 imported steel products, and also began formal safeguard inspections on 11 imported steel 
products.

-   China's temporary safeguard measures on 9 imported steel products that include STS plates will be taken 
over a 6 month period from May 24 to November 23, 2002, in accordance with the WTO Safeguard 
Agreement on temporary safeguards. The safeguard measures will set a quota of 5.3 million tons, and 
impose additional tariffs of 7% to 26% on imports exceeding that quota. 

-   China will investigate 11 imported steel products, including the 9 products on which the temporary 
safeguard measures have been imposed. The investigation began on May 20, 2002, and is expected to take 
approximately 6 months. The decision on whether to take safeguard measures will be made based on the 
outcome of the investigation.

 
2. The Chinese Government stated that the import restrictions placed on steel products by WTO member 
countries, such as the US and the EU, caused an increase in steel imports to China which seriously 
damaged Chinese industries. As a result, it explained that its steel industries recommended that temporary 
safeguard measures be taken.  

-  China's total import amount of the 9 steel products under investigation recorded 15.05 million tons in 1999, 
18.76 million tons in 2000, and 23.2 millions tons in 2001.

 
3. The Korean Government has expressed concern regarding the spread of import restrictions on steel, in 
particular, those taken by China in response to those of the US and the EU. It will point out to the Chinese 
side that taking temporary safeguard measures in the process of its anti-dumping investigation on cold 
rolled steel plates is excessive. Furthermore, Korea will consult with China on whether China is under the 
critical situation to take the temporary safeguard measures. Korea and China will also consult on whether 
injury was made to the Chinese industries as a result of increase in imports when there is increasing 
China's demand for steel.

 
4. In a letter dated May 23, 2002 to Mr. Shi Guangshen, China's Minister of Foreign Trade and Economic 
Cooperation, Mr. Hwang Doo-yun, Korea's Minister for Trade, expressed Korea's concern regarding this 
issue. Minister Hwang will discuss this issue with China further on the occasion of his visit to China to 
participate in the Korea-China IT Business Fair.

 
5. Meanwhile, the Korean Government will promote Korea-China bilateral consultations in accordance with 
the WTO Safeguard Agreement to decide whether China's measures are consistent with the WTO 
agreements, and to discuss the distribution of the quota tariffs and how the quota will be operated. The 
Korean Government will request China to refrain from developing its temporary safeguard measures to 
safeguard measures. Efforts will also be made to seek resolution at the multilateral level, such as in the 
OECD.

 
6. China is Korea's largest steel export market (27.2% of total exports amounting to 3.83 million tons in 
2001). Considering that most of Korea's major steel export products are subject to the temporary 
safeguards measures, it will be difficult for Korea to avoid setbacks in trading steel with China.

                                                                    Spokesperson of MOFAT

* unofficial translation