South Korea complains to WTO over Japan trade curbs

South Korea’s senior trade official Yoo Myung-hee at a briefing in Seoul. AP
Updated 11 September 2019

South Korea complains to WTO over Japan trade curbs

SEOUL: South Korea said on Wednesday it will initiate a complaint to the World Trade Organization over Japan’s tightened export controls on key materials that South Korean companies use to make computer chips and displays.

South Korea, which has accused Tokyo of weaponizing trade to retaliate over political disputes, will formally request bilateral consultations with Japan on Wednesday as the first step in the WTO dispute settlement process, said Yoo Myung-hee, a senior official at South Korea’s Ministry of Trade, Industry and Energy.

She said that the country is also considering whether to pursue WTO action over Japan’s move to delist South Korea as a preferential trade partner.

Japan in July imposed tighter export controls on three chemicals South Korean companies use to produce semiconductors and displays for smartphones and TVs, citing unspecified security concerns over South Korea’s export controls on sensitive materials that could be used for military purposes.

The measures, which weeks later were followed by Japan’s move to exclude South Korea from its “white list” of countries with fast-track trade status, triggered a full-blown diplomatic row that saw relations sink to a low unseen in decades.

South Korea says Japan’s trade measures threaten its export-dependent economy, where many manufacturers rely on materials and parts imported from Japan. It claims Tokyo is retaliating over South Korean court rulings that called for Japanese companies to offer reparations to aging South Korean plaintiffs over World War II forced labor.

Japan insists that all compensation matters were settled when the two countries normalized relations under a 1965 treaty and that the South Korean court rulings go against international law.

“Japan’s export restriction on the three materials were based on political motivation related to rulings by our Supreme Court on forced labor,” Yoo said at a news conference. “It was a discriminatory measure that directly targets only our country.”

Hiroshige Seko, Japan’s minister of economy, trade and industry, told reporters in Tokyo he thought hardly any WTO member countries were sympathetic to South Korea’s position.

“Regardless, it is clear that our action is consistent with the WTO,” he said.

Seko added that Tokyo would study the demands and respond according to the proper WTO procedures.

If Japan accepts South Korea’s request, the countries must hold consultations for a minimum 60 days. If Japan refuses the consultations or if the talks fail, South Korea could request a WTO panel ruling on the dispute. The process usually takes about 15 months but may also last years, said Jeong Hae-seong, a South Korean trade ministry official.

The measures Tokyo introduced in July require Japanese companies to receive case-by-case inspections and approval on the shipments of the three materials to South Korea, which takes up to 90 days, compared to the previous fast-track process that took one or two weeks, South Korean officials said. Yoo said Japan approved the shipments of the materials only three times since the measures took effect on July 4.


US to extend license for its companies to continue business with Huawei

Updated 15 min 36 sec ago

US to extend license for its companies to continue business with Huawei

  • A longer extension is in the works but has not yet been finalized due to regulatory hurdles

WASHINGTON: The Trump administration is set to issue a two-week extension of a license allowing US companies to continue doing business with China’s Huawei Technologies, two sources familiar with the deliberations said.

The extension of around two weeks is far shorter than the prior 90-day extension and a longer extension is in the works but has not yet been finalized due to regulatory hurdles, said one source who was briefed on the matter.

After adding Huawei to an economic blacklist in May citing national security concerns, the US Commerce Department has allowed it to purchase some American-made goods in a move aimed at minimizing disruption for its customers, many of which operate networks in rural America.

The extension will be announced on Monday, when the earlier reprieve is set to expire, the sources said, declining to be identified as the extension has not been publicly announced.

A spokesman for Huawei, the world’s biggest maker of telecom network equipment, said the company does not comment on rumors and speculation. The Commerce Department declined to comment.

HIGHLIGHTS

  • US added Huawei to an economic blacklist in May citing national security concerns.
  • The Commerce Department is also considering whether to grant individual licenses for US firms to sell components to Huawei.

Commerce Secretary Wilbur Ross told Fox Business Network on Friday that some rural carriers need the temporary licenses and are dependent on Huawei for 3G and 4G networks.

“There are enough problems with telephone service in the rural communities — we don’t want to knock them out. So, one of the main purposes of the temporary general licenses is to let those rural guys continue to operate,” Ross said.

The development comes amid discussions between the US and China aimed at coming to an initial agreement to resolve a trade war that has lasted for over a year.

In blacklisting Huawei, the US government said it had a “reasonable basis to conclude that Huawei is engaged in activities that are contrary to US national security or foreign policy interests.” Huawei has repeatedly denied the accusations.

Attorney General William Barr said on Thursday Huawei and ZTE Corp. “cannot be trusted,” as he backed a proposal to bar US rural wireless carriers from tapping an $8.5 billion government fund to purchase equipment or services from them.

In May, President Donald Trump also signed an executive order declaring a national emergency and barring US companies from using telecommunications equipment made by companies posing a national security risk. The Commerce Department was due to draw up an enforcement plan by mid-October but has yet to publish one.

The Commerce Department is also considering whether to grant individual licenses for US firms to sell components to Huawei after receiving more than 200 requests.