Seoul asks WTO to look into Beijing's trade curbs

SEOUL • Seoul has complained to the World Trade Organisation (WTO) about Chinese retaliation against South Korean firms over the deployment of a US anti-missile defence system in the South, the trade minister said yesterday.

South Korea and the United States say the sole purpose of the Terminal High Altitude Area Defence (Thaad) system is to guard against missile launches from North Korea, but China says that its powerful radar could penetrate into its territory.

"We have notified the WTO that China may be in violation of some trade agreements," Trade Minister Joo Hyung Hwan told Parliament in response to questions about China's reaction.

It would be up to South Korea to follow up on its complaint to the WTO for any action to take place, analysts say, either by continuing to raise its concerns and spelling out what China is doing wrong, or by launching a trade dispute. The first step would be to formally "request consultations" with China.

When asked what would happen next, Mr Joo said the ministry would strengthen communications with Beijing and take action if needed. He did not give further details.

China is South Korea's largest trading partner and the dispute over Thaad has resulted in a sharp decline in Chinese tourists in the South's shopping districts.

The Chinese authorities have also closed nearly two dozen retail stores of South Korea's Lotte Group amid the diplomatic stand-off.

Beijing has not explicitly linked the restrictions to the Thaad deployment, but the South Korean government has offered cheap loans and extended deadlines on existing debt to help businesses that have been affected and has pushed to diversify trade markets.

Mr Joo said the issue was raised with the WTO's Council for Trade in Services last Friday.

An official, who asked not to be identified, said the complaint could not be categorised as a legal action but was rather a request for the WTO to look into whether China was upholding trade pacts fairly.

In Beijing, Chinese Foreign Ministry spokesman Hua Chunying did not comment directly on the WTO complaint, only saying at a briefing: "We support normal business and other exchanges between China and South Korea... But everyone knows this needs a corresponding basis in public opinion."

Apart from its concerns about the radar, Beijing also says Thaad will do nothing to ease tensions on the Korean peninsula.

South Korean lawmakers have been ramping up their criticism of what they say has been the government's lack of an aggressive response to China's actions, which include a freeze on South Korean television dramas, as well as music and product boycotts.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 21, 2017, with the headline 'Seoul asks WTO to look into Beijing's trade curbs'. Print Edition | Subscribe