Tokyo looking into alleged dumping by Seoul

President Moon Jae-in visits a hydrogen fluoride plant in Cheonan, South Chungcheong, in November 2019. The chemical is one of three key materials restricted by the Japanese government in July 2019. [YONHAP]

Japan has reportedly started an investigation into possible dumping of the potassium carbonate by Korea.

The move comes as Seoul doubles down on its complaint to the World Trade Organization (WTO) about Tokyo’s restrictions on exports of key industrial materials a year ago, and after Korean Trade Minister Yoo Myung-hee officially announced a bid for the WTO top position last week.

According to Tokyo-based Jiji Press on Monday, Japan's Ministry of Finance and Ministry of Economy, Trade and Industry are looking into possible violations of trade laws by Korean potassium carbonate exporters.

Jiji quoted the Japanese government as saying Korea exported the chemical at an “unreasonably low price.”

The chemical is used in the manufacturing of liquid crystal displays (LCDs) as well as detergents.

The Korean government said it is monitoring the situation, but cautioned against making too much over a dumping investigation.

“A government investigating alleged dumping is not unusual and happens frequently,” said an official from the Korean Ministry of Trade, Industry and Energy on Tuesday.

Japan started a trade war with Korea when it announced last July 4 it was restricting exports of three key materials — hydrogen fluoride, photoresists and fluorinated polyimide.

The move was considered retaliation to the Korean Supreme Court’s ordering in 2018 two Japanese companies to compensate Korean forced laborers from the colonial period and World War II.

The materials are essential components to make key Korean export goods, including semiconductors and displays. Semiconductors alone account for 23 percent of all of Korean exports.

A year later, the impact of Japan's restrictions have been limited.

Korea's main chip and display manufacturers have not reported any production setbacks since the restriction began largely thanks to the finding of new suppliers.

In January, the Korean government succeeded in persuading the U.S. chemical company DuPont to build an extreme ultraviolet (EUV) photoresist plant in Cheonan, South Chungcheong.

President Moon Jae-in on Monday expressed his satisfaction with the Korean government and Korean companies' handling of the trade dispute with Japan.

During a cabinet meeting on Monday, Moon said Japan's export restrictions turned out to be an opportunity for Korea.

“This week will be the first anniversary since Japan unilaterally restricted exports,” Moon said. “[But] it opened a pathway toward [building] a strong economy that no one can shake.”

He said the predictions of doom for Korea proved wrong.

“So far there have been no production setbacks,” Moon said. “It spearheaded the localization of materials, parts and equipment as well as establishing a diverse and stable supply chain.”

Last month, the Korean government revived its complaint for the WTO about Japan's export controls after a lackluster diplomatic response from Tokyo in May. The Japanese government has urged Korea to reconsider.

“I urge you to quit the procedure [of the WTO dispute settlement subcommittee] and return to the dialogue table,” Japanese Economy, Trade and Industry Minister Hiroshi Kajiyama said during a press conference in Tokyo on Monday.

Japan continued to raise concerns about Korea’s “systematic and operational weakness” in export control at the WTO in Switzerland on Monday, where Korea's request to create a dispute settlement subcommittee was discussed.
In particular, Tokyo raised concerns about the “proliferation of military technology” resulting from Seoul allegedly weak export controls.

The Korean government in May argued that it has met all requests made by Tokyo on trade.

The Japanese government was also reported to have protested Korea being invited to a G7 meeting this year, which the Blue House on Monday criticized as shameless.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]