Korea will lodge WTO complaint over Japan’s export curbs

13-Sep-2019 Intellasia | Reuters | 6:02 AM Print This Post

The move is latest in bitter trade dispute between the two countries stemming from a decades-old dispute.

South Korea’s trade minister said the country plans to file a complaint at the World Trade Organisation (WTO) on Wednesday over Japan’s tighter export controls, accusing Tokyo of being “politically motivated” and “discriminatory”.

Early in July, Japan imposed tighter controls on exports of three materials to South Korea used to make smartphone chips or displays following a diplomatic dispute over compensation for forced labourers during Japan’s occupation of Korea during World War II.

“We have decided to complain about Japan’s measures at the WTO… to prevent the act of abusing trade for political purposes from recurring,” South Korea’s Trade minister Yoo Myung-hee said at a briefing.

Bilateral relations deteriorated after South Korea’s Supreme Court last year ordered two Japanese companies to compensate the wartime workers in a ruling that Tokyo said violated international law. Japan believes the issue of compensation was settled under a 1965 treaty.

Yoo said South Korean firms are “faced with serious damage” due to uncertainties over shipments of the three materials affected by Japan’s export controlsfluorinated polyimides, photoresists and hydrogen fluoride. These materials are used by South Korean tech firms such as Samsung Electronics.

Japan now requires exporters to seek permission each time they want to ship those materials, which takes up to 90 days. Previously, it only took a couple of weeks to ship, Yoo said.

Only three shipments have been approved since Tokyo took action on July 4, she said.

“Seoul’s complaint will not lead Japan to drop its tighter export curbs on the three items, but this will certainly put pressure on Japan to cautiously carry out the measures,” said Ahn Duk-geun, a professor at Seoul National University.

Sixty-day consultation

As the first step of WTO dispute settlement, South Korea will request consultations with Japan and seek the end of the export curbs. If that does not resolve the issues, South Korea will request a WTO panel ruling on the cases, the trade minister told a briefing.

The talks could take 60 days or more, a trade ministry official said.

Yoo also said South Korea was considering “all options” in response to Tokyo’s decision to drop Korea from the so-called white list of preferred trading partners. South Korea is taking steps to drop Japan from its own white list.

Experts expect Japan to launch complaints at the WTO over Korea’s planned export curbs. But WTO cases can take years.

“They should resolve the matter politically and diplomatically, but chances are low for such a resolution because both governments are using the dispute to their own political advantage,” said Cheong In-kyo, an economics professor at Inha University.



Category: Korea

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