Japan to stress legitimacy of export curbs on S. Korea at WTO

Kyodo News – Jul 17 , 2019.

GENEVA – Japan will send a senior government official to a World Trade Organization general council meeting next week to stress the legitimacy of restrictions it placed on exports to South Korea of materials used in high-tech device production, diplomatic sources said Tuesday.

The planned dispatch of Shingo Yamagami, director general of the Foreign Ministry’s Economic Affairs Bureau, comes after Seoul said it will take the matter to the WTO, arguing the restrictions are a retaliatory step in response to South Korean court rulings on wartime labor.

Japan now requires companies to obtain individual licenses to export three materials — fluorinated polyimide, hydrogen fluoride and photoresist — used in the production of semiconductors and display panels to South Korea starting July 4, citing national security reasons.

The process to acquire a license, which can take around 90 days, had previously been waived for South Korea, a status it shared with the United States and many European countries.

Japan wants to send Yamagami, a senior diplomatic official well versed in trade issues including the latest restrictions, in case South Korea decides to have a high-level government official attend the two-day meeting from Tuesday.

According to the sources, Yamagami will reiterate Tokyo’s position that it is not imposing a trade embargo and that the measures are intended to address national security concerns.

Yamagami will also assert that the tightened export controls comply with free trade principles without running counter to a declaration promoting free and fair trade issued by the Group of 20 economies last month in Osaka, the sources said.

The WTO’s general council meeting will be joined by 164 member countries and regions.

At a WTO meeting on goods trade on July 9, South Korean Ambassador to Geneva Paik Ji Ah called for the withdrawal of the trade restrictions, while Junichi Ihara, Japan’s representative in Geneva, said they comply with WTO rules and do not pose trade problems.

The export restrictions were announced amid a standoff in a dispute over South Korean court decisions ordering Japanese companies to compensate victims of forced labor during Japan’s 1910-1945 colonial rule of the Korean Peninsula.

The companies have refused to comply, in line with Japan’s stance that the issue of compensation was resolved under a 1965 treaty that established diplomatic relations between the countries. Lawyers for the plaintiffs have threatened to liquidate the companies’ assets that have been seized.

Japan has asked South Korea to establish an arbitration panel involving a third country to resolve the dispute, while South Korea has proposed pooling funds from Japanese and South Korean firms to compensate the victims, but so far neither side has budged.

CR: Kyodo News