South Korea says to 'actively' consider filing WTO complaint against China

SEOUL (Reuters) - South Korea will consider filing a complaint against China to the World Trade Organization over what it described as trade retaliation for the deployment of a U.S. anti-missile system outside of Seoul, the ruling party said on Tuesday.

Overview of the World Trade Organization (WTO) headquarters in Geneva, Switzerland, January 26, 2017. REUTERS/Pierre Albouy

South Korea in July decided to install the Terminal High Altitude Area Defense (THAAD) system in response to missile threat from North Korea, despite China objecting that THAAD’s radar can penetrate its territory.

South Korean companies in China have since reported cyber attacks, store closures and fines, while state-controlled media has called for a boycott of South Korean goods and services.

“We will actively consider whether China’s action is in violation of the South Korea-China free trade deal, while stepping up efforts to minimize damage on South Korean industries,” Lee Hyun-jae, chairman of the Liberty Korea Party’s policy committee, said after meeting senior government officials.

Chinese foreign ministry spokesman Geng Shuang, when asked about the matter on Tuesday, reiterated China’s stance that law-abiding foreign companies are welcome and will be protected.

In the latest instance of suspected discrimination, China has rejected applications from airlines including Jeju Air Co Ltd 089590.KS to add charter flights between the two countries this month, Yonhap News Agency reported on Tuesday.

This adds to similar rejections for January and February. No reasons have been given for any of the rejections.

A Jeju Air spokesman confirmed the March rejection when contacted by Reuters. Chinese foreign ministry spokesman Geng said in a briefing he was not aware of the charter flight issue.

The rejections would be the second blow in a matter of days for South Korean travel companies, after the Chinese government last week ordered tour operators in China to stop selling trips to South Korea.

Lee said on Tuesday the Seoul government had since agreed to provide 50 billion won ($43.3 million) worth of “special loans” for tourism firms experiencing difficulties due to the order.

Chinese authorities have also closed retail stores belonging to Lotte Group following inspections. The number of closures had reached 39, and one store has received a fine, a Lotte Mart spokesman said on Tuesday.

Reporting by Daewoung Kim and Hyunjoo Jin; Additional reporting by Joyce Lee in SEOUL and Ben Blanchard in BEIJING; Editing by Paul Tait and Christopher Cushing