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(3rd LD) S. Korea, Japan end 1st round of WTO talks on trade row with no deal

All News 18:32 October 12, 2019

(ATTN: RECASTS headline, lead paras; ADDS details in paras 4-12)

GENEVA/SEOUL, Oct. 12 (Yonhap) -- South Korea and Japan failed to reach an agreement in their inaugural bilateral talks in Geneva on Friday (local time) in connection with Seoul's complaint with the World Trade Organization (WTO) over Tokyo's export restrictions.

Ending around six hours of consultations held as part of a dispute settlement process under WTO rules, the two sides agreed to meet again for additional talks.

"We agreed that further consultations are necessary, and decided to schedule a second round of bilateral talks through diplomatic channels," Chung Hae-kwan, the chief South Korean delegate to the talks, told reporters.

This photo shows Chung Hae-kwan, director-general of multilateral and legal affairs at South Korea's Ministry of Trade, Industry and Energy. (Yonhap)

The next round of discussions will likely take place before Nov. 10, given the date, Sept. 11, when South Korea filed the complaint with the WTO. Such one-on-one consultations can be held for 60 days following a complaint.

In the case of no deal, South Korea and Japan can request that the WTO Dispute Settlement Body establish a panel to look further into the case.

"Bilateral consultations usually end in one round, but the fact that we agreed to meet again means that both countries are ready for dialogue and willing to work together," Chung said.

The Japanese delegation also held a press briefing earlier, claiming it was "inappropriate" for South Korea to bring the dispute to the WTO for "political" reasons.

"Japan is concerned about the vulnerability of South Korea's export management system," Junichiro Kuroda, Tokyo's chief delegate to the talks, said. "We are allowing (the export of the affected items) once their civilian use is verified, so it is not an embargo."

He also claimed that the regulations had nothing to do with the South Korean court ruling on forced labor.

The European Union and Taiwan wanted to observe the Geneva consultations between South Korea and Japan, but Tokyo refused to allow it.

Japan cited "sensitive and secret" issues covered in the session.

Seoul regards Tokyo as having violating a set of international trade rules, including Article 11 of the General Agreement on Tariffs and Trade (GATT), which bans regulations on export volumes unless the products have a serious impact on national security.

South Korea also claims that Japan has violated the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and Trade Related Investment Measures (TRIMS).

The move came after Japan implemented regulations in early July on the export to South Korea of three industrial materials -- fluorine polyimide, photoresist and hydrogen fluoride -- vital for the production of chips and displays.

Seoul views the measure as retaliation for a South Korean court ruling that ordered compensation for Korean victims of Japan's forced labor during its 1910-45 colonial rule of the Korean Peninsula.

Japan has argued that the regulations were necessary because South Korea operates a lax control system on the trade of sensitive goods.

South Korea's trade ministry claims that allegations raised by Japan were groundless and they cannot justify a discriminative trade policy that targets only Asia's No. 4 economy.

The trade dispute has escalated and spilled into other spheres of bilateral relations, with South Korea deciding in August to terminate a military intelligence-sharing pact with Japan.

In August, Japan also removed South Korea from its "whitelist" of trusted trading partners, which are granted preferential treatment in the trade of sensitive industrial materials. Last month, South Korea also took Japan off its own list of trusted trade partners in an apparent tit-for-tat measure.



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