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Seoul says it has reported Beijing’s actions to WTO

Officials added there is not enough evidence yet to bring a lawsuit
Mar 21,2017
The Korean government announced it has officially reported to the World Trade Organization the Chinese government’s apparent economic retaliations against Seoul’s decision to deploy a U.S. missile defense system in the country.

In the past few months, the Chinese government has imposed various trade restrictions in the tourism and retail sectors in apparent retaliations against the deployment of the Terminal High Altitude Area Defense system, or Thaad.

“We have reported the problems of trade restrictions by the Chinese government due to the deployment of the U.S. antimissile shield and said such actions may violate the WTO’s trade agreements,” Trade Minister Joo Hyung-hwan told lawmakers at a meeting at the National Assembly on Monday. “It appears the Chinese government will deny the fact that they are retaliating against Korea, but we need to criticize such actions if there is a probability that they are related to the deployment.”

Even though the Korean government said it filed a complaint to the WTO, it does not necessarily mean it officially sued or filed disputes to the international organization. The Korean government still needs to collect evidence to officially sue China, but the Trade Ministry said the recent action will at least be able to pressure Beijing.

For the past few months, the government was criticized for being too passive in regards to the matter, as they repeatedly said they did not have specific evidence to show that the retaliations are directly due to the deployment. Finance Minister Yoo Il-ho has continued to say that he is aware of the problem but that it is hard to take action at this time.

“There are no changes to our principles that we will actively react to the Chinese government in various ways, including reporting the problems to the World Trade Organization,” Yoo said last week, “but it is hard for us to do so right now since the Chinese government didn’t say they are taking such action due to the deployment.”

Government officials also warned that Chinese retaliations against Korean companies will likely grow from now on.

China has ordered Lotte Mart to stop operating its 67 branches in China and ordered its people not to travel to Korea in groups.

Furthermore, Chinese government officials are currently conducting inspections on anti-dumping cases of Korean products, while strengthening import regulations on Korean cosmetics and food products.

According to the study conducted by Korea International Trade Association last week, more than half of survey respondents said they are affected negatively by the Chinese government’s retaliations.

The study found that 56.2 percent of the 597 companies surveyed that are doing businesses with China are experiencing negative impacts, while another 32.9 percent said they are not affected by it yet but will see some impact in the next few months.

The Ministry of Trade, Industry and Energy said it will come up with a 400 billion won ($349.6 million) package to help companies affected by China’s actions.

The ministry said it will provide legal counseling and other consulting services to companies that export goods to China.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]