(ATTN: UPDATES throughout with more remarks; CHANGES headline; ADDS photo)
SEOUL, July 17 (Yonhap) -- South Korea is willing to put all options on the table to resolve the trade stand-off with Japan via diplomacy, a government official said Wednesday.
He did not rule out the possibility of "arbitration" in the process, speaking to foreign reporters based in Seoul.
"We're open to all suggestions, putting all options on the table and see which direction is the best way to go," the official said on the condition of anonymity. "We are open to constructive suggestions, and we try to exercise flexibility."
He said South Korea is taking a "neutral stance on the issue of arbitration," adding it is not "hostile" to it.
His remarks apparently reflect the Moon Jae-in administration's continued efforts for a diplomatic solution to the problem of Japan's tougher restrictions on the export of some key materials used in semiconductor and digital display products.
Moon earlier warned Japan publicly about more damage from a potential trade war with South Korea. The president urged Tokyo to immediately withdraw the trade measure that was taken July 4 apparently in reprisal over historical issues.
Japan is upset about rulings by South Korea's Supreme Court ordering Japanese firms to pay compensation for victims of wartime forced labor. Many Koreans were forced to toil at Japanese factories and mines during World War II.
The Moon government has stated that it respects the court decisions, while Japan claimed all reparations, associated with its 1910-45 colonization of Korea, were covered by a 1965 state-to-state treaty.
Japan set Thursday as the deadline for South Korea to respond to its call for an arbitration process involving three third-country members to discuss the matter. It's preparing for additional trade steps against Seoul.
South Korea made it clear that Japan's demand is unacceptable.
On the trade issue itself, however, the official emphasized that his government is open to "constructive suggestions" aimed at exploring the "most efficient, effective" diplomatic resolution "for the sake of South Korea-U.S.-Japan trilateral cooperation."
Asked about consultations between Kim Hyun-chong, deputy chief of Cheong Wa Dae's national security office, and David Stilwell, U.S. assistant secretary of state for East Asian and Pacific affairs, in Seoul earlier in the day, the official said Kim had briefed him on the negative impact from the Seoul-Tokyo trade row and the urgency of diffusing tension.
Kim informed Stilwell "of this economic issue between (South) Korea and Japan, and its impact on trilateral cooperation and its detrimental effect," the official said.
Stilwell "fully understood the serious nature of this issue," he added.
He said "no" in response to a question about whether Kim requested Washington's intervention.
He also stressed that Japan is undermining free trade with the export curbs against South Korea, and it will also take a toll on the global tech industry,
Tokyo's move is "inconsistent" with the World Trade Organization (WTO) principles, he pointed out.
"I don't think I need to remind you of the dire consequences stemming from the stoppage of semiconductor lines," he said. "It will adversely affect companies ranging from Apple, Amazon and Dell to Sony, and billions of consumers all over the world."
He said it's particularly disappointing that Japan has targeted the chipmaking sector, when it accounts for some 25 percent of South Korea's exports and Samsung Electronics Co. represents 21 percent of the country's stock market.
The official stressed that science and technology shouldn't be used as tools in a trade war, which will "only lead to tragic consequences."
Instead, he added, they should be used to stoke "the passion for creativity" for contributions to the world.
He also rapped Japan for inconsistent assertions about the ostensible reason for limiting exports to South Korea. Tokyo initially talked about "breach of trust" and then claimed the possibility of illegal shipment of dual-use materials out of South Korea without presenting any clear evidence.
In a report published earlier this year by the Institute for Science and International Society, South Korea ranked 17th, while Japan stood at 36th in terms of national strategic trade controls, according to the official.
"Such claims, therefore, are simply groundless," he said.
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