South Korea to reopen WTO complaint over Japan trade curbs

 Reigniting a bitter row between key U.S. allies, South Korea on Tuesday said it will reopen a complaint filed with the World Trade Organization over Japan’s tightened controls on technology exports to its companies, blaming Tokyo for an alleged lack of commitment in resolving mutual grievances.

South Korea had halted its WTO action in November when it decided to keep a military intelligence-sharing agreement with Japan it previously threatened to end over conflicts stemming from wartime history and trade, after months of pressure by the Trump administration.

Japan in return agreed to resume talks on settling a bilateral trade dispute, which was triggered by its move in July in to strengthen export controls on key chemicals South Korean companies used to make computer chips and displays.

But Na Seung-sik, an official from South Korea’s trade ministry, said there has been no progress since then because of what he described as Japan’s lack of willingness to settle the dispute. He said South Korea will request a WTO panel ruling over the issue and that the process will likely take more than a year.

When imposing tighter controls over the three chemicals, Japan had cited unspecified security concerns over South Korea’s export controls on sensitive materials that could be used for military purposes. But Na said there has been no known security problem related to the chemicals or products that involved them in the past 11 months.

“Our government in the past six months sincerely engaged in dialogue and provided thorough and sufficient explanations so that the Japanese side could understand South Korea’s export controls are functioning normally and effectively,” Na said in a briefing.

“Our thinking is that the process of bilateral consultations is over, and the next step would be for us to request the WTO to set up a dispute settlement panel.”

South Korea says Japan’s trade measures threaten its export-dependent economy, where many manufacturers rely on materials and parts imported from Japan. It claims Tokyo is retaliating over South Korean court rulings that called for Japanese companies to offer reparations to aging South Korean plaintiffs over World War II forced labor.

Japan, which ruled the Korean Peninsula for nearly four decades before the end of the war, insists that all compensation matters were settled when the two countries normalized relations under a 1965 treaty and that the South Korean court rulings go against international law.

The countries also downgraded each other’s trade status before letting the row to spill over to the military pact, which symbolizes the countries’ three-way security cooperation with the United States in the face of a North Korean nuclear threat and China’s growing assertiveness.

South Korea initiated the WTO complaint last September over Tokyo’s July export controls, which required Japanese companies to receive case-by-case inspections and approval on the shipments of the chemicals to South Korea.

South Korean officials said the process could disrupt South Korean companies’ manufacturing activities because it could take up to 90 days, compared to the previous fast-track process that took a week or two.