The Commerce Department said yesterday it has delayed imposing penalty duties on Korean television makers for unfair trade practices in a case that has raised concerns among U.S. manufacturers that trade complaints are being stalled for foreign policy reasons.
Trade specialists for American companies in a host of industries are focusing on this case to see if the Commerce Department bows to what has been described as "an enormous amount of pressure" exerted by the Korean government, which has pressed for an indefinite delay on any penalty duties. The Koreans fear that high duties could cripple a growing, $300-million export earner.
Zenith Electronics Corp., which brought the trade complaint along with organized labor, argued that the new dumping duties should be imposed Wednesday, as originally set by the Commerce Department.
The case has taken on political overtones in Korea, where some politicians and newspaper editorialists see it as a test of the country's security relationship with the United States.
But two influental congressional committee chairmen from Zenith's home state of Illinois -- Senate Foreign Relations Committee Chairman Charles Percy (R) and House Ways and Means Committee Chairman Dan Rostenkowski (D) -- attacked the government of Korea for trying to exert undue influence in the case and urged Commerce Secretary Malcolm Baldrige not to delay the duties.
Baldrige, though, agreed to a 45-day delay, until Dec. 15, to clarify "difficult issues" raised by Korean and American companies, he said in a letter written to Korean Trade Minister Kum Jin-Ho.
"The TV case is a good example of the inability of our two societies to understand each other," said one long-time expert on Korea with the U.S. Chamber of Commerce. "Koreans don't understand our insistence on fair trade. They don't understand the open market process. But they do understand cash flow and dumping to build sales."
Three Korean TV makers -- Daewoo, Gold Star and Samsung -- were found in February to have "dumped" color television sets on the U.S. market at prices that were between 13 and 15 percent below the cost of production, and charged a penalty duty that erased the difference. In May, the companies -- apparently believing they could get lower penalty duties -- asked for an expedited review of the original finding.
Instead of lowering the dumping penalties, however, the new Commerce investigation found Samsun was selling its sets at more than 50 percent under production costs. The other two companies also had higher dumping margins, though only about half ofSamsun's -- 25 percent for Daewoo and 20 percent for Gold Star. As a result of the extreme competition between Korean TV makers, Gold Star opposed an extension while Daewoo has no taken no position on that issue.