SEOUL, Jan 13: South Korea has launched a probe into allegations that European shipyards are subsidized to support prices in violation of trade rules, officials said on Monday.

The probe is part of a protracted trade war between South Korea and the European Union (EU) that flared up in 1999 when European shipbuilders accused their South Korean counterparts of receiving unfair subsidies.

The EU took its formal complaint against South Korean shipbuilders, including the world’s largest maker Hyundai Heavy Industries, to the World Trade Organization (WTO) in October last year.

The EU has argued South Korean firms have been able to sell ships below cost because of government subsidies. European shipbuilders have called for the imposition of anti-dumping tariffs on their Asian competitors.

South Korea has rejected the charge and has threatened to file a separate WTO complaint against European shipyards.

“We have sent a letter asking for details by January 15 on an EU decision to provide shipbuilders in the region with subsidies,” a South Korean trade official told AFP.

The government believes EU subsidies are being used to support ship prices and do not conform to WTO regulations, he said.—AFP