South Korea to lodge WTO complaint over Japan's export curbs

Trade Minister Yoo Myung-Hee said if the consultations do not resolve the issues, South Korea will request a WTO panel ruling on the cases.
Trade Minister Yoo Myung-Hee said if the consultations do not resolve the issues, South Korea will request a WTO panel ruling on the cases.PHOTO: AFP

SEOUL (BLOOMBERG, AFP) - South Korea will file a complaint on Wednesday (Sept 11) with the World Trade Organisation against Japan’s export curbs on key materials used by its neighbour’s chip and display makers, South Korea’s trade minister said in a statement.

Seoul and Tokyo have been embroiled in the trade and diplomatic spat since Tokyo tightened export controls in early July on three chemicals essential to making memory chips and high-spec displays, key products of South Korean companies such as Samsung and LG.

The restrictions follow a series of South Korean court rulings ordering Japanese firms to pay for forced labour during World War II.

The ongoing dispute has also seen the two neighbours remove each other from their "white lists" of trusted trading partners and prompted South Korea not to renew a military intelligence sharing pact.

Trade Minister Yoo Myung-hee said Japan was politically motivated in taking the export control measures on July 4 after South Korea’s Supreme Court ruled on compensation for former Korean war-time forced labourers, and the measure is a “discriminatory” step directly targeting South Korea.

"Targeting South Korea is ... in violation of WTO’s principles banning discriminatory practise."

With South Korea’s role as a main supplier for memory chips and displays, Yoo said, the curbs have caused "significant uncertainty" in the global economy.

Yoo said South Korea will request a bilateral consultation at the WTO as a first step to resolve the issue.

Tokyo says the move was made necessary by a "loss of trust" in relations with Seoul, but also accuses South Korea of improperly handling exports of sensitive materials from Japan. 

But Seoul maintains it is a retaliatory move in response to historical disputes. 

South Korea and Japan are both US allies, democracies and market economies faced with an overbearing China and nuclear-armed North Korea. 

But relations between Tokyo, Beijing, and both Koreas continue to be heavily affected by Japan’s expansionism in the first half of the 20th century, including its colonisation of the peninsula. 

Tokyo maintains that all issues of wartime compensation were settled under the 1965 treaty that re-established diplomatic ties, including a package of about US$800 million (S$1.1 billion) in grants and cheap loans for the former colony. 

Seoul rebukes that point and contends the 1965 deal did not absolve individuals’ rights to seek reparations.