U.S. urges Japan, South Korea to look at 'standstill agreement' for trade feud

WASHINGTON (Reuters) - The United States has urged South Korea and Japan to consider signing a “standstill agreement” on a serious diplomatic dispute to buy time for the countries to negotiate, a senior U.S. official told reporters on Tuesday.

Japan reined in exports of high-tech materials to South Korea as relations between the two countries worsened this month, fueled by a feud over compensation for South Koreans forced to work in Japan’s factories when Japan occupied the Korean peninsula from 1910 to 1945.

President Donald Trump said earlier this month that he wanted to help ease tensions between the two biggest U.S. allies in Asia. White House national security adviser John Bolton traveled to the two countries last week for discussions.

Washington is trying to be helpful in the dispute between its regional allies, the official said, noting that Secretary of State Mike Pompeo was expected to meet with foreign ministers from Japan and South Korea at a regional conference in Bangkok on Thursday.

Japan could decide as early as Friday to drop South Korea from a “white list” of countries that enjoy minimum trade restrictions, said the official, who spoke on condition of anonymity.

The standstill proposal would not resolve any of the differences between the two countries, but would forestall any further actions for a set period of time to allow for talks to take place, the official said.

The length of the proposed agreement had not been determined, the official said.

The United States is closely watching the dispute, particularly ahead of an Aug. 24 deadline for the two countries to recommit to an annual intelligence sharing agreement.

The bilateral General Security of Military Information Agreement is automatically renewed every year and is primarily aimed at countering nuclear and missile threats from North Korea.

Washington is also closely watching an expected Aug. 15 speech to be delivered by South Korean President Moon Jae-in marking the end of the Second World War, the official said.

Reporting by Roberta Rampton; Editing by Dan Grebler and Leslie Adler