Japan accepts talks with South Korea on WTO arbitration

Trade minister Isshu Sugawara, however, said Japan’s controls on exports to South Korea follow WTO rules and that Tokyo stands by its position. (File Photo: すがわら一秀/Facebook)

TOKYO — Japan announced Friday it will accept South Korea’s request for joint talks leading to arbitration by the World Trade Organization after Seoul filed a complaint with the international body over Tokyo’s tightening of export controls.

Trade minister Isshu Sugawara, however, said Japan’s controls on exports to South Korea follow WTO rules and that Tokyo stands by its position.

“We have decided to accept the negotiations requested by South Korea,” Sugawara said. “Japan’s position is that its review of trade controls is consistent with WTO rules and that there is no change to that. We will give South Korea a thorough explanation.”

South Korea initiated a complaint with the WTO last week after a trade dispute between the neighbours erupted in July.

The two countries also held talks in Tokyo on Friday on a range of contentious issues including forced labour by Koreans during World War II and South Korea’s cancellation of a military intelligence pact, but failed to make progress.

Shigeaki Takizaki, head of Asian and Oceanian Affairs Bureau at Japan’s Foreign Ministry, held talks with his South Korean counterpart, Kim Jung-han, but the two sides repeated their respective positions and no concessions were made, Japanese officials said.

Japan tightened controls on key chemicals that South Korean companies use to produce semiconductors and displays, and then downgraded South Korea’s preferential trade status a month later. Tokyo cited unspecified security reasons, while South Korea accused it of “weaponizing” trade in response to a longstanding dispute over Japan’s wartime actions.

The trade restrictions, which affected a core South Korean industry, have led to a full-blown dispute, sending relations between the U.S. allies to their lowest level in decades and spilling over into tourism, security and other areas.

Seoul declared it is terminating a military intelligence sharing pact with Japan that had symbolized the countries’ three-way security co-operation with the United States in the face of a North Korean nuclear threat and China’s growing assertiveness.

South Korea last week announced that it has removed Japan from a group of countries given fast-track trade approval process. Seoul also began raising questions over Japan’s handling of massive amounts of treated but still radioactive water stored at the Fukushima nuclear plant, which was destroyed in 2011 by a massive quake and tsunami.