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Korea takes Japan to WTO for 'unfair' export restrictions

Trade Minister Yoo Myung-hee speaks during a press conference at the Government Complex in Seoul, Wednesday. Yoo said Korea will file a complaint with the WTO against Japan for the Tokyo's July 4 export restrictions to Korea on three materials for making semiconductors. Yonhap
Trade Minister Yoo Myung-hee speaks during a press conference at the Government Complex in Seoul, Wednesday. Yoo said Korea will file a complaint with the WTO against Japan for the Tokyo's July 4 export restrictions to Korea on three materials for making semiconductors. Yonhap

By Nam Hyun-woo

The government will file a complaint with the World Trade Organization (WTO) against Japan for its July 4 imposition of export restrictions against South Korean companies with regard to three important materials for manufacturing semiconductors and display panels, the trade minister said Wednesday.

The trade row between the two countries has not escalated in recent weeks, as Tokyo has not taken any additional actions after removing Korea from its whitelist of trade partners allowed preferential treatment, Aug. 28. This move affected nearly 1,200 items. However, when Korea files a complaint with the WTO, the feud between the two countries could get nastier.

"The government will file a complaint with the WTO against Japan for the country's export restriction measures which took effect on three core semiconductor materials on July 4," Trade Minister Yoo Myung-hee said during a press conference.

"The process will begin with the government sending documents requesting talks to the Japanese government and the WTO body."

Following this, Japan will have 10 days to decide whether to accept the request. If it does, the two countries will have 60 days to negotiate a settlement. If they fail to do so, the WTO's Dispute Settlement Body will set up a panel, which will work as jury for the dispute. If Japan refuses take part in the talks, the panel will be convened immediately.

The Ministry of Trade, Industry and Energy expects it could take up to 15 months for the WTO to make a ruling. However, the time for a settlement to be achieved could be dragged out further if either side appeals.

Yoo stressed that Japan's export restrictions on the three materials _ photoresist, hydrogen fluoride and fluorinated polyimide _ was based on a "political motive in response to last year's Supreme Court rulings here calling for Japanese firms to compensate surviving Koreans forced to work for them during wartime."

"Along with the unfairness of the measure, Japan announced the restriction without any prior notification, and implemented it just three days after the announcement," Yoo said. "Through this, Japan ignored the legitimacy of protocol and didn't show the minimum consideration for its neighboring country."

The government said it believes Japan broke WTO agreements by discriminating against Korea through the export restrictions on freely traded goods and is using trade for political reasons.

Korea threatened to file a complaint with the WTO after Tokyo changed its export rules to have the three materials individually licensed before being shipped to Korean importers. Since then, only three batches of the regulated items have been approved for export to Korea.

Additionally, Japan announced Aug. 7 that it was removing Korea from its "whitelist" of countries receiving preferential trade status, and implemented this from Aug. 28.

In response, the government announced the removal of Japan from its whitelist, Aug. 12, which is expected to be implement as early as next week.



Trade Minister Yoo Myung-hee speaks during a press conference at the Government Complex in Seoul, Wednesday. Yoo said Korea will file a complaint with the WTO against Japan for the Tokyo's July 4 export restrictions to Korea on three materials for making semiconductors. Yonhap
Trade Minister Yoo Myung-hee speaks during a press conference at the Government Complex in Seoul, Wednesday. Yoo said Korea will file a complaint with the WTO against Japan for the Tokyo's July 4 export restrictions to Korea on three materials for making semiconductors. Yonhap

By Nam Hyun-woo

The government will file a complaint with the World Trade Organization (WTO) against Japan for its July 4 imposition of export restrictions against South Korean companies with regard to three important materials for manufacturing semiconductors and display panels, the trade minister said Wednesday.

The trade row between the two countries has not escalated in recent weeks, as Tokyo has not taken any additional actions after removing Korea from its whitelist of trade partners allowed preferential treatment, Aug. 28. This move affected nearly 1,200 items. However, when Korea files a complaint with the WTO, the feud between the two countries could get nastier.

"The government will file a complaint with the WTO against Japan for the country's export restriction measures which took effect on three core semiconductor materials on July 4," Trade Minister Yoo Myung-hee said during a press conference.

"The process will begin with the government sending documents requesting talks to the Japanese government and the WTO body."

Following this, Japan will have 10 days to decide whether to accept the request. If it does, the two countries will have 60 days to negotiate a settlement. If they fail to do so, the WTO's Dispute Settlement Body will set up a panel, which will work as jury for the dispute. If Japan refuses take part in the talks, the panel will be convened immediately.

The Ministry of Trade, Industry and Energy expects it could take up to 15 months for the WTO to make a ruling. However, the time for a settlement to be achieved could be dragged out further if either side appeals.

Yoo stressed that Japan's export restrictions on the three materials _ photoresist, hydrogen fluoride and fluorinated polyimide _ was based on a "political motive in response to last year's Supreme Court rulings here calling for Japanese firms to compensate surviving Koreans forced to work for them during wartime."

"Along with the unfairness of the measure, Japan announced the restriction without any prior notification, and implemented it just three days after the announcement," Yoo said. "Through this, Japan ignored the legitimacy of protocol and didn't show the minimum consideration for its neighboring country."

The government said it believes Japan broke WTO agreements by discriminating against Korea through the export restrictions on freely traded goods and is using trade for political reasons.

Korea threatened to file a complaint with the WTO after Tokyo changed its export rules to have the three materials individually licensed before being shipped to Korean importers. Since then, only three batches of the regulated items have been approved for export to Korea.

Additionally, Japan announced Aug. 7 that it was removing Korea from its "whitelist" of countries receiving preferential trade status, and implemented this from Aug. 28.

In response, the government announced the removal of Japan from its whitelist, Aug. 12, which is expected to be implement as early as next week.



Nam Hyun-woo namhw@koreatimes.co.kr


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