Photo/IllutrationDelegations from Japan and South Korea sit next to each other at the July 24 General Council meeting of the World Trade Organization held in Geneva. (Shinya Wake)

Japan was preparing further trade restrictions against South Korea after the two countries presented their arguments at the World Trade Organization on July 24 in a dispute that shows no signs of abating.

Tokyo had been collecting public opinions about its plan to remove South Korea from its “white list” of nations that have only the minimum level of trade restrictions placed on them.

The deadline of July 24 has passed, and the Japanese government is now expected to go ahead with the removal.

“There has been overwhelming support for the move,” a high-ranking official of the Abe administration said. “The public sentiment toward South Korea has considerably worsened.”

Japan has already imposed stricter export controls on materials used to manufacture semiconductors to South Korea. That measure was introduced on July 4.

At the WTO’s General Council meeting in Geneva on July 24, Kim Seung-ho, a deputy minister in South Korea’s Ministry of Trade, Industry and Energy, said that move by Japan was a “retaliatory measure” against South Korean Supreme Court rulings ordering a number of Japanese companies to pay compensation to wartime Korean laborers.

But the Japanese side, led by Junichi Ihara, Japan’s ambassador to the International Organizations in Geneva, rejected Seoul’s claim and argued that the topic should never have been brought up at the WTO.

They said the new export restrictions were simply part of a general review of export control procedures.

“We have explained our position separately to member nations and have obtained their understanding,” Ihara told reporters after the session.

Japan and South Korea are using different articles of the General Agreement on Tariffs and Trade (GATT) to back their arguments.

Seoul said Japan’s tighter control measure could represent a violation of GATT’s Article 1, which calls for most favored nation status among WTO members regarding tariff rates, as well as Article 11, which bans export volume quotas.

However, Japanese officials argued that the export control falls under an exemption defined in Article 21 of GATT based on national security concerns.

The Cabinet of Prime Minister Shinzo Abe plans to up the ante in the dispute by approving a revision to a Cabinet order to remove South Korea from the white list. The measure could take effect as early as late August.

Once Seoul is removed from the list, a wide range of additional exports to South Korea will require separate approval. The items range from machine tools to advanced materials, such as chemicals and carbon fiber, which are already regulated by international trade arrangements.

Sung Yun-mo, South Korea’s trade minister, said on July 24 he had submitted an opinion paper to the Japanese government asking that Tokyo refrain from removing South Korea from the white list. He said such a move “would have a deep, negative effect on free trade in the world.”

He also rejected Tokyo’s earlier claims about problems with South Korea’s export control, saying Seoul had included all international guidelines in its control measures.

Hiroshige Seko, Japan’s minister of economy, trade and industry, responded immediately, saying it was impossible to believe South Korea’s claim on trade control because it has not presented any evidence to back its argument.

With no sign that the two sides were even considering direct discussions to deal with the issue, a South Korean government official said Seoul would ask the WTO, “at the appropriate time,” to look into the dispute over the latest semiconductor material export control measure.

(This article was written by Shinya Wake in Geneva, Takeshi Kamiya in Seoul and Hiroki Ito in Tokyo.)