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International relations

South Korean companies urge diplomacy in Japan export dispute

Seoul seeks support from US and WTO to end Tokyo's curbs on chip materials

The skyline of central Seoul: Many businesses in South Korea want the government to engage in dialogue with Japan.   © Reuters

SEOUL -- South Korean businesses want the government to talk with Japan to resolve the recent dispute involving Tokyo's export curbs on key chipmaking materials, while Seoul pursues a case with the World Trade Organization.

After Japan tightened restrictions on July 4 for exporting the three materials to South Korea, the Federation of Korean Industries surveyed 50 company representatives that have transactions with Japan as well as securities analysts and trade experts.

Diplomatic dialogue was the most popular choice for what actions the government should take, favored by 48% of respondents. This was followed by the 30% who said South Korea should produce domestically the parts and materials it relies on Japan to supply, while 10% suggested that Seoul bring the matter to the WTO.

South Korean companies make finished products using parts and materials supplied by Japanese businesses. According to the survey, 62% believe that South Korea will be hit harder if shipments from Japan are delayed due to stricter export procedures.

Japanese and South Korean negotiators met Friday in Tokyo, but neither side gave ground in the dispute. The WTO has agreed to hear Seoul's grievances over the export curbs. 

Seoul is scrambling to gain support from the international community. Minister of Foreign Affairs Kang Kyung-wha spoke by phone Wednesday with U.S. Secretary of State Mike Pompeo about Japan's export controls.

South Korea also sent Kim Hyun-chong, second deputy chief of its National Security Office, to Washington on Wednesday to make the case that Tokyo's move is unfair.

"With no exception, U.S. figures sympathized with that," Kim told reporters on Sunday as he returned to South Korea.

Local media reported that Harry Harris, the U.S. ambassador to South Korea, said in a meeting with opposition party lawmakers that now is not the time for the U.S. to intervene.

But in regards to the ambassador's remarks, Kim said that he heard a greater level of interest in Washington.

Japan implemented an order on July 4 requiring government approval for contracts to ship etching gas, photoresist and fluorinated polyimides to South Korea, citing lax controls for the three chipmaking materials, which also can be used for military purposes.

Tokyo's move is widely seen as retaliation for South Korean court rulings ordering Japanese companies to compensate those forced to work for them in World War II.

In response, Seoul raised its record on crackdowns against smuggling to insist that Japan's argument has no basis.

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