South Korea to resume WTO complaint over Japan’s export curbs after talks stall

FILE PHOTO: An industrial port is pictured in Tokyo, Japan, May 23, 2019. REUTERS/Kim Kyung-Hoon/File Photo

SEOUL (Reuters) – South Korea said on Tuesday it would recommence proceedings against Japan at the World Trade Organization over export controls on some high-tech materials, adding that talks to resolve the dispute had so far failed to make progress.

Seoul plans, however, to continue dialogue with Tokyo which it accuses of not showing sufficient commitment to resolving problems, while proceeding with the WTO complaint.

“Our government has reached the conclusion that it is difficult to see this situation progressing through normal dialogue, which had been the condition for us suspending procedures to settle this through the WTO,” South Korea’s deputy minister for trade & investment, Na Seung-sik, told reporters.

“Through the WTO complaint, we will prove the illegality and unfairness of Japan’s export controls and raise international awareness,” he added.

Bilateral relations deteriorated after South Korea’s Supreme Court in 2018 ordered two Japanese companies to compensate wartime workers in a ruling that Tokyo said violated international law. Japan says the issue of compensation was settled under a 1965 treaty.

Following the ruling, the Japanese government said in July last year it would stop preferential treatment for shipments to South Korea of three materials whose production it dominates and which are used by firms such as Samsung Electronics Co Ltd.

Curbs on two of the materials – hydrogen fluoride, used as an etching gas in the chipmaking process and fluorinated polyimides, used in smartphone displays – remain in place and exporters need to gain permission for each shipment, which takes around 90 days.

A Japan trade ministry official said Tokyo will decide on its next course of action after seeing details of South Korea’s announcement.

Although the curbs have led to a sense of crisis within Korea Inc about its dependence on some Japanese goods, South Korea has not seen major disruptions to imports of those materials due to the efforts of South Korean firms, Na said without elaborating.

Reporting by Hyunjoo Jin; Additional reporting by Makiko Yamazaki in Tokyo; Editing by Edwina Gibbs

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