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Korea-Japan bilateral talks to start today

If the two sides fail to agree, the next step is a WTO panel ruling
Oct 11,2019
Seoul and Tokyo will meet for bilateral talks today for the first time through the World Trade Organization’s (WTO) dispute settlement process to defuse disagreement over Japan’s strengthened export controls against Korea.

According to Korea’s Ministry of Trade, Industry and Energy on Thursday, trade representatives from the two countries will meet for the first stage of the WTO process in Geneva after Korea filed a complaint against Japan to the trade organization last month.

If the two countries fail to reach an agreement through the talks by Nov. 11, Korea can request for a WTO panel to make a ruling on the matter.

Due to the sensitivity of the dispute, the matter will likely be escalated to the Appellate Body, effectively the WTO’s highest dispute settling body, and a final decision could take more than three years.

Seoul’s complaint revolves around Tokyo’s decision in July to implement export curbs on three industrial materials essential for semiconductor and display manufacturing. The complaint does not include additional measures that Japan has made since, such as removing Korea from its list of preferential trade partners.

While Japan has argued the legitimacy of the July measures, citing security concerns and an erosion of trust, Korea has maintained that Japan was politically motivated in its retaliation to a Korean Supreme Court decision last year on compensation to forced laborers during World War II.

The ongoing trade conflict has worsened as Korea has resorted to reciprocal measures such as removing Japan from its own list of trusted trade partners and deciding to scrap a joint military intelligence-sharing pact.

Seoul urged Tokyo for a resolution through bilateral consultations in a statement last week, highlighting the supply uncertainties the export curbs have created for Korean chip and display makers and calling them out as “discriminatory.”

Korean companies have resorted to reducing their reliance on established Japanese sources by instead working with local materials suppliers.

If the matter ends up proceeding to a WTO panel, Japan’s claims of national security concerns will likely be the major focus of the dispute.

Under Section 21 of the General Agreement on Tariffs and Trade, countries can take trade-restrictive measures they consider necessary to protect their security interests. The WTO sided with Russia when it cited the article to justify trade restrictions on Ukraine.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]