South Korea and Japan to hold talks over trade dispute on Friday

SEOUL – Trade officials from South Korea and Japan will hold bilateral consultations in Geneva on Friday, following a complaint filed by Seoul with the World Trade Organization last month over Tokyo’s tightening of export controls, trade ministries of the two countries said Thursday.

The talks are part of a dispute settlement process stipulated in WTO rules. If the talks fail to resolve differences, South Korea would likely ask the WTO to set up a dispute settlement panel, which would function as a lower court.

In July, Japan imposed tougher rules on three key materials required by South Korean companies to produce semiconductors and display panels, saying trust between the countries had been undermined.

Seoul has alleged that Tokyo’s tightening of export controls was in retaliation for South Korean Supreme Court rulings last year ordering Japanese companies to pay compensation over wartime forced labor.

The two countries had been arranging a date and venue for the talks since Sept. 20, when Japan agreed to South Korea’s request to hold bilateral consultations at director general-level, according to South Korea’s Trade, Industry and Energy Ministry.

Japan-South Korea ties have deteriorated sharply due to disputes over wartime history and trade policy.

In addition to reviewing the export controls, Japan removed South Korea on Aug. 28 from its whitelist of trusted trade partners that enjoy minimum trade restrictions on goods such as electronic components that can be diverted for military use.

In response, South Korea deleted Japan from its equivalent list on Sept. 18.

Under the tightened export rules that took effect on July 4, Japanese manufacturers have to obtain approval each time before shipping the three materials to South Korea.

South Korea’s trade ministry said earlier this month that Japan had approved seven shipments of the materials so far.