Japan and South Korea clash at WTO over trade row

GENEVA (Reuters) - South Korea tried to bring international pressure to bear on Japan by airing its complaint at the World Trade Organization (WTO) on Wednesday, the latest move in a festering dispute that has seen Washington’s two biggest Asian allies lobbing accusations at each other.

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Japan has enraged South Korea with a plan to “normalize” trade procedures that are currently “simplified”, effectively curbing exports to South Korea and erecting a barrier that could disrupt the global supply of semiconductors.

That followed a ruling last year by a South Korean court that Japanese companies had to pay compensation to South Koreans forced to work in Japanese factories during Japan’s occupation of the Korean peninsula from 1910 to 1945.

Japanese ambassador Junichi Ihara told the WTO meeting that the change in trade procedures was Japan’s prerogative, was nothing unusual, and reflected Seoul’s failure to maintain dialogue on the mutual streamlining of trade procedures.

It also was also based on national security concerns, following “some cases of inappropriate export” to South Korea, the ambassador said.

That national security claim could make it exempt from the rules of the WTO, where South Korea chose to raise the issue on Wednesday, sending deputy trade minister Kim Seung-ho to address the WTO’s top-level meeting short of a ministerial conference.

“It’s not at all a trade measure, it’s not at all a security measure, it’s purely strategically planned to gain the upper hand in the diplomatic rows, I mean the forced labor issues,” Kim told reporters.

Japan sent the director-general of economic affairs at its Foreign Ministry, Shingo Yamagami, and Kim said he had asked for a face-to-face meeting with Yamagami but had been flatly turned down.

“That clearly shows that Japan has not confidence or even courage to face what Japan has done,” he said. “This evasive attitude shows that Japan tries to close its eyes to what it has done and Japan tries to close its ears to... Japanese actions’ victims.”

Kim said Japan risked causing disruption to the world economy and undermining the WTO, and called on Japan to return to bilateral talks.

Ihara said Japanese officials had already briefed their South Korean counterparts for five hours and although Japan was not refusing further talks, Yamagami said he had not received an official request for dialogue.

“There is apparently a paucity of dialogue between export control agencies between the two countries, maybe that is where they should start,” Yamagami told reporters.

South Korea had brought the dispute to the WTO’s General Council, hoping to rally international opposition to Japan’s move.

But no other WTO members took the floor, and diplomats from several other countries told Reuters they preferred not to get involved in the dispute between two nations with an intertwined and complex history.

Reporting by Tom Miles; Editing by Gareth Jones, William Maclean and Frances Kerry