U.S. Takes Side with Japan on Seoul-Tokyo Trade Row

Posted on 06 August 2020

The United States has sided with Japan at the first meeting of a dispute settlement panel set up by the World Trade Organization to look into South Korea's complaint against Japan's export restrictions.

The WTO posted on its website on Aug. 3 a summary of the minutes of the Dispute Settlement Board (DSB) meeting held on July 29 (local time).

At the meeting, the United States said that “only Japan can judge what is necessary to protect its essential security interests.” The statement implies that if Japan implemented export restrictions for security purposes, it is not a matter for the WTO to judge. The United States effectively expressed opposition to Korea's WTO complaint against Japan.

The U.S. added: “Since the erroneous panel findings in ‘Russia — Measures Concerning Traffic in Transit’ (DS512), several WTO members have rushed to challenge national security measures. This surge in litigation poses serious risks to the WTO, threatening to enmesh the organization in national security matters it has wisely avoided for over 70 years.”

Security concern is the most important basis put forward by Japan to justify its export regulations against Korea that began in July 2019. As such, the United States can be seen as having sided with Japan.

The Korean Ministry of Trade, Industry and Energy immediately distributed a press release saying that the United States did not side with Japan. The ministry stressed that the United States has advocated the WTO’s noninvolvement in security issues since the era of the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO, and the latest comment only reflects this stance.

The Korean ministry also said that as the United States imposes trade sanctions on other countries for security reasons, it made a comment on the Korea-Japan dispute based on this position. The United States used national security to defend itself in disputes with the European Union and Canada in steel trade. Security concern was also the basis for imposing sanctions on China's Huawei and the recent announcement of a ban on China's video-sharing application "TikTok" in the United States

The U.S. position can be a major factor in the WTO review of the conflict between Korea and Japan. In 2019, when Korea and Japan locked horns over the termination of the General Security of Military Information Agreement (GSOMIA), the United States expressed its opposition to the termination of the agreement. Korea eventually refrained from terminating the agreement. Some analysts say that the United States has delivered a message that the Korea and Japan should resolve the trade conflict through dialogue.

Source : Business Korea