hankyoreh

Minister of Trade

The South Korean government is predicted to state its case on Japan’s recent export controls before the World Trade Organization (WTO) Council for Trade in Goods while requesting mediation from the US on the grounds that the Japanese regulations are in violation of the international system for controls of strategic goods. The approach signals a “two-track” strategy taking shape as Seoul pursues bilateral discussions with Tokyo on one hand, while on the other making the case with the international community that the Japanese measures are unfair.

A Ministry of Trade, Industry and Energy (MOTIE) senior official said on July 9 that Minister for Trade Yoo Myung-hee plans to visit the US shortly to request mediation. As the matter is related to strategic goods, Yoo also appears likely to meet with figures from the Commerce Department and State Department.

“South Korea and Japan are the only Asian countries that are parties to all three treaties on export controls on strategic goods,” explained a MOTIE senior official.

“We will be explaining to the US that Japan’s baseless export controls are not merely an issue between our two sides, but undermine the very international system for export controls on strategic goods,” the official said.

“Strategic goods” are items that are seen as posing a risk of being diverted to military goods and munitions. The international community shares an export control system to prevent such items from finding their way to dangerous places. A representative example of this is the Wassenaar Arrangement (WA). A successor to the US-led Coordinating Committee for Multilateral Export Controls (CoCom) framework from the Cold War era, the WA was launched in 1996 to prevent proliferation of conventional weapons. Forty-two states are currently participating, including South Korea and Japan. On July 4, Yoo said the Japanese measures were “in violation of the basic guidelines of the Wassenaar Arrangement, which states that institutions must be operated in such a way as not to target specific states and states’ militaries [with export controls] or obstruct well-intentioned civilian transactions.”

The South Korean government also plans to speak to US companies that comprise a significant portion of semiconductor demand. It is expected to work toward establishing trust as a trade partner by explaining ahead of time about the severe damages that could arise for those companies if its factories producing memory semiconductors – a category where South Korea accounts for around 60% of the global market – cut or halt production due to the Japanese export controls, while also emphasizing how Japan’s actions are destabilizing the global supply network.

Seoul’s prediction is that the US – which holds the “key” for the system of export controls on strategic goods – will not be able to sit idly by as the situation progresses. But diplomatic sources in Washington said the US “does not appear willing” to actively involve itself in the situation and noted that there were “no signs of serious concern” over the South Korea-Japan conflict emerging from related US industries.

Meanwhile, the South Korean government is also considering whether to go ahead with an official case or other dispute settlement procedures if Japan fails in its bid to apply pressure with the WTO by stirring up international opinion. It’s a decision that requires some caution – since the WTO dispute settlement approach would take too long to have any practical effect.

It could take as long as one year simply to request Japan’s participation in bilateral discussions as the first stage in WTO dispute resolution. If those discussions fail, a roughly six-month long panel review ensues before an initial ruling; if one side refuses to comply, it would take at least two to three years to receive a ruling from the final appellate body. Working-level officials with MOTIE have already begun examining related laws, but remain circumspect about proceeding with a complaint – which would lock the current situation into the long term.

“We plan to work swiftly to prepare for a WTO complaint, but the timing is to be decided strategically,” a Blue House official said.

By Choi Ha-yan and Noh Ji-won, and Hwang Joon-bum, Washington correspondent

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