Japan, South Korea find 'common ground' in trade dispute talks, agree to meet again

TOKYO (Reuters) - The first meeting between senior Japanese and South Korean trade officials since Japan imposed controls on exports of high-technology materials to its neighbor ended hours later than scheduled on Monday, with the two saying they had reached “common ground” and agreeing to talk again.

Japan's Director General for Trade Control Department Yoichi Iida shakes hands with South Korea's Director General For International Trade Policy Lee Ho-hyeon shake hands at the start of their senior-level talks in Tokyo, Japan, December 16, 2019, in this photo released by Kyodo. Mandatory credit Kyodo/via REUTERS

Testy relations between the two U.S. allies sank to a new low in July after Japan imposed the curbs on exports to South Korea of three materials used to make semiconductors, threatening a pillar of its economy and the global supply chain of chips.

Japan cited its concern about insufficient South Korean controls on the materials for the move in July, although the curbs came as relations soured over a dispute over Japan’s wartime actions.

Yoichi Iida, director-general at the Japanese trade ministry’s trade control department, and his South Korean counterpart Lee Ho-Hyeon, met in Tokyo for the first senior-level bilateral talks in three-and-a-half years.

The two made no comment as they shook hands at the beginning of their meeting, but the talks ran more than three hours over schedule and Japanese trade minister Hiroshi Kajiyama said there was “progress”, adding the next dialogue would be held in Seoul in the near future.

“These policy talks were the first ones for three-and-a-half years, and we verified each others’ position,” Kajiyama told reporters in brief, late-night remarks after the talks broke up. “We’ll make a judgment after building on this.”

The ministry later said in a statement that the 10 hours of talks had been broad and the two shared the opinion that, given the current international security situation, promoting “effective” export controls was essential.

South Korea’s trade ministry said they had reached “common ground” that the two nations needed to pursue effective management of export systems, and that they would continue talking to resolve outstanding issues.

“We explained that it is necessary to return to the situation before July 1 with the soonest possible, and that will be a crucial step to stronger cooperation between the two countries going forward,” Lee told a news briefing.

“There were differences in perceptions to some extent, but overall I can tell you that there was enhanced understanding.”

South Korean President Moon Jae-in is expected to hold separate talks with Japanese Prime Minister Shinzo Abe and also Chinese President Xi Jinping during his trip to China next week.


The mood after Monday’s lengthy talks contrasted with the frosty meeting in July, when Japanese officials briefed their Korean counterparts on their decision - held in a small room with no refreshments that was criticized by South Korea as lacking courtesy.

The dispute centers on Japan’s imposition of tighter rules on its exports and its removal of South Korea from its list of countries with fast-track trade status. South Korea responded by dropping Japan from its favored-trade list and threatening to end security cooperation.

Earlier on Monday, Japan’s Chief Cabinet Secretary Yoshihide Suga downplayed expectations for any quick solution to the dispute, saying he looked forward to “a comprehensive assessment”.

Relations between the neighbors have been plagued for years for bitterness over Japan’s colonization of the Korean peninsula from 1910 to 1945, which saw forced use of labor by Japanese companies and the use of “comfort women”, a Japanese euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.

Japan’s July trade restrictions came after a South Korean court ruled last year that Japanese companies had to pay compensation to South Koreans forced to work in Japanese factories during Japan’s occupation.

Japan believes the issue was settled under a 1965 treaty and the court ruling violated international law.

The trade dispute has raised fears about security cooperation although South Korea, under pressure from the United States, last month decided to retain an intelligence-sharing pact with Japan that it had threatened to end.

Additional reporting by Kaori Kaneko, Naomi Tajitsu and Ritsuko Shimizu in TOKYO, and Hyunjoo Jin in SEOUL; Writing by Elaine Lies; Editing by robert Birsel and Alex Richardson