Japan, South Korea hold export talks, seek dispute solution

Japan and South Korea weren't able to settle their sharp differences in talks on Japanese restrictions on high-tech exports to South Korea but agreed to continue their dialogue, officials said

TOKYO -- Japan and South Korea were unable to settle their sharp differences in talks Monday on Japanese restrictions on high-tech exports to South Korea but agreed to continue their dialogue, officials said.

The talks in Tokyo were the first since Japan tightened controls in July on exports to South Korea of materials used in the manufacture of smartphones, television screens and other high-tech products, citing national security concerns.

A month later, Japan also removed South Korea from a list of preferential trading partners.

The steps have contributed to a sharp escalation in tensions between the two countries and pushed their relations to the lowest level in decades.

South Korea has demanded that Japan reverse its measures, saying Tokyo is using trade controls to retaliate for recent South Korean court rulings that ordered Japanese companies to compensate former Korean laborers for their treatment during Japan's 1910-1945 colonial rule of the Korean Peninsula. Tokyo has insisted that a 1965 agreement establishing diplomatic relations between the two countries settled all compensation issues.

The talks Monday between Yoichi Iida, director-general of Japan's Trade Control Department, and his South Korean counterpart, Lee Ho-hyeon, were the first at that level between the countries in more than three years.

“We made a step forward,” Japanese trade minister Hiroshi Kajiyama said of the talks, but added that more dialogue is necessary before Japan can regain confidence in South Korean export controls and is able to reverse its measures. Japan has accused South Korea of not properly guarding against the re-export of sensitive materials to third countries.

He said the two sides discussed a wide range of issues, including export controls on sensitive materials, conventional weapons and screening procedures, and “were able to promote mutual understanding.”

“Taking into consideration the current international security environment, we shared the view that it is necessary to promote effective export controls within their areas of responsibility and discretion," Kajiyama said.

He said the two sides agreed to continue a dialogue on export control policies with the aim of resolving their differences, and plan to hold their next meeting in Seoul at an unspecified time in the near future.

Japan's trade curbs against South Korea led to retaliatory measures that spilled into national security, with Seoul threatening to abandon a key military intelligence sharing pact with Tokyo.

The pact was saved just hours before its expiration in November, following U.S. pressure and an announcement by Tokyo that it was willing to resume talks on export controls requested by Seoul.

South Korean consumers have boycotted Japanese products and tourism to Japan, causing imports of Japanese beer to drop to just $5,000 in September, down from $7 million a year earlier, according to Fitch Solutions Macro Research.

South Korea also has voiced safety concerns about seafood from Fukushima and a number of other prefectures in northeastern Japan near the Fukushima nuclear plant disaster, causing a drop in its seafood imports from Japan.

Monday's talks came a week ahead of a planned meeting of the leaders of the two countries and China.

Japanese Foreign Minister Toshimitsu Motegi and his South Korean counterpart, Kan Geun-wha, who were attending an Asia-Europe Meeting in Madrid, Spain, welcomed the trade officials’ meeting in Tokyo, Japanese officials said.

Chief Cabinet Secretary Yoshihide Suga said earlier Monday that export controls are its international responsibility and “they are not something that we decide by negotiating with a trade partner."

“Our policy has been consistent and there is no change to our position," Suga said, referring to Japan's position on the compensation issue. “We urge South Korea to act wisely.”

South Korean National Assembly Speaker Moon Hee-san is seeking a compromise under which a compensation fund for Korean laborers under Japanese colonial control would be established to which Japanese companies could donate.

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