The World Trade Organisation (WTO) issued a mixed ruling on Friday on a complaint by South Korea that the European Union gave illegal support to shipbuilders. A panel of trade experts rejected much of the South Korean case, which was launched after Brussels brought its own action against Seoul. The panel said that subsidies provided to shipyards in Denmark, France, Germany, the Netherlands and Spain through the EU's temporary defence mechanism (TDM) were lawful.
But it said that the EU had been wrong to adopt the measures, which Brussels said were in retaliation for alleged subsidies given by South Korea, without first seeking the approval of the WTO.
The TDM allows EU governments to provide aid for up to 6 percent of the value of a shipbuilding contract as long as it is used to counter a competing South Korean bid.
But diplomats said that the programme had already expired at the end of March, raising the question of what practical implications the WTO verdict could have. Both sides can appeal the panel's findings.