Korea, Japan discuss trade dispute at WTO
Korea and Japan have embarked on a bilateral discussion to settle their months-long trade dispute at the headquarters of the World Trade Organization (WTO) in Geneva, Friday afternoon (KST), as part of their first debate settlement procedure.
The director-level consultation came a month after Korea raised the issue of Japan’s “intentional” export ban to Korea on three chemical materials crucial for manufacturing chips and display panels. The materials — resist, etching gas and fluorinated polyimide — are critical for South Korean tech companies to manufacture high-tech electric parts.
The Korean delegation, led by Chung Hae-kwan, director general of the Ministry of Trade, Industry and Energy, will stress the trade ban from Tokyo undermines the fundamentals of the WTO fair trade rule.
But chances appear slim for the two countries to seek a breakthrough during the meeting when considering they have so far failed to narrow any differences over the dispute during a series of meetings through diplomatic channels since the Japanese government started the apparent “trade retaliation” against Korea on July 4.
“The bilateral dialogue is designed for both sides to achieve a mutually satisfactory solution before they start a judicial process,” Chung told reporters Thursday before leaving for Geneva.
“We are going to raise the nonconformity and problems of the decision by Japan, but will also seek a potential solution to the dispute,” he said.
The Korean government will also continue to underline that Japan’s subsequent economic retaliations, such as the decision to remove Korea from a whitelist of countries receiving trade benefits, were apparently politically motivated against Seoul’s 2018 Supreme Court ruling over a historical conflict.
In a responsive measure to the “whitelist” removal, the Korean government also decided in August to scrap the General Security of Military Information Agreement (GSOMIA) with Japan. Despite the decision, the Korean government has left open the possibility to reconsider the decision if Japan cancels the “retaliatory” trade restrictions. Local industry sources said the ongoing conflicts over trade and history do no good to the economies of the two countries.
“Korean semiconductor and display manufacturers are diversifying their supplier channels to minimize the aftermath of Japan’s trade retaliation,” an industry source said.
“The trade restriction will not bring any short-term critical impacts on the Korean major tech firms, such as Samsung Electronics and SK hynix,” the source said. “But one thing clear is that none of the Korean and Japanese companies welcome the prolonged trade feud, as this does no good to the interests of both sides.”
Aside from the economic side, the Korean government is also seeking to find a middle ground in the row through diplomatic channels.
Against the backdrop, National Assembly Speaker Moon Hee-sang plans to visit Tokyo next month to attend a meeting of parliamentary speakers of the G20 countries, according to Assembly officials, Thursday.
It would mark the Assembly leader’s first trip to Japan since he took office as speaker. Japanese House of Councilors President Akiko Santo, who is also a member of the Liberal Democratic Party (LDP), sent her invitation to Moon last month.
Akiko asked Moon to share his view on the relations between South Korea and Japan, with neither side showing any signs of reaching any near-term settlement over the issue.
The Assembly speaker’s upcoming visit to Japan is symbolic and displays Korea’s willingness for a breakthrough in the deepening feud.
The Japan-Korea Parliamentarians’ Union will also be held in Japan on Oct. 31, four days before the Speakers’ Summit in the context of the G20.
Participants of the meeting will include about 100 Japanese lawmakers and 50 South Korean lawmakers.