South Korea, Japan set to discuss export controls at WTO


South Korea and Japan are slated to have bilateral consultations in Geneva on Friday, a first step toward resolving a trade dispute triggered by Japan’s export restrictions, officials said on Thursday.

Since September 20, when Tokyo responded to Seoul’s request for bilateral consultations in accordance with the World Trade Organisation’s (WTO’s) rules, the two countries have discussed details such as dates and times through diplomatic channels and decided to send director-level representatives to Geneva to hold consultations, according to South Korea’s Trade Ministry.

 

Chung Hae-kwan, the director-general in charge of legal affairs for the Trade Ministry, left for Geneva on Thursday to take part in the consultations.

In principle, bilateral consultations should begin within 30 days of a request. On September 11, Korea filed a complaint with the WTO requesting bilateral consultations to urge Japan to reverse its July 4 decision to impose tighter control of certain material shipments to South Korea under its export control system.

Three months ago, Japan tightened restrictions on exports to South Korea of three high-tech materials – fluorinated polyimides, photoresists and hydrogen fluoride. Previously, South Korea’s Supreme Court decided to hold Japanese companies liable for having taken advantage of forced labour during World War II, and the changes to its export control system are widely seen as a form of retaliation.

If the two nations fail to reach an agreement in the bilateral consultations, the next step will be panel hearings. The South Korean government may request the establishment of a panel within 60 days of its request for consultations.

Since the country filed its complaint on September 11, it can request the establishment of a panel on November 11.

A Trade Ministry spokesperson said South Korea’s government will do its best to resolve the matter as soon as possible.

 

It usually takes about 15 months for a WTO panel to make a decision, beginning from the start of bilateral consultations.

But if either side were to challenge the panel’s decision, the appeals process could take two to three years.

As bilateral relations between South Korea and Japan have sunk to their lowest level in recent months since the normalisation of diplomatic ties in 1965, bilateral trade volume has also declined.

According to the government data, exports from Korea to Japan dropped 3.5 per cent from July to August. Exports from Japan to South Korea fell 8.1 per cent during the same period.

In the past three months, the Japanese government has not approved a single hydrogen fluoride shipment to Korea, according to the statement released by the Trade Ministry last week. Instead, the Japanese authorities are demanding additional documents.

“Liquid hydrogen fluoride exports for semiconductors now require as many as nine documents, similar to countries subject to a United Nations arms embargo,” the statement said.

THE KOREA HERALD