Japan pushes back against Seoul's calls to scrap export curbs (updated)

STELLA CHEMIFA

09/07/2019 03:15

(Recasts)
    TOKYO, July 9 (Reuters) - Japan pushed back on Tuesday
against calls from South Korea to scrap restrictions on
high-tech exports to its Asian neighbour, as a diplomatic row
over forced wartime labour escalates between the two key U.S.
allies.
    The dispute threatens to disrupt global supplies of South
Korean memory chips and smartphones, with Samsung Electronics
 005930.KS  and SK Hynix  000660.KS  among the key names likely
to be affected.
    Japan was "not thinking at all" of withdrawing the curbs and
they did not violate World Trade Organization rules, Industry
Minister Hiroshige Seko said. 
    "Whether Japan implements additional measures depends on
South Korea's response," he told a news conference after a
cabinet meeting.
    South Korea's benchmark index  .KS11  fell after the
minister's comments, standing down 0.18 percent at 2,060.38
points by 0155 GMT.  urn:newsml:reuters.com:*:nL4N24949X
    The remarks followed urging on Monday by South Korean
President Moon Jae-in for the restrictions to be withdrawn.
Seoul could not rule out countermeasures for damage they
inflicted on firms in South Korea, Moon added.
    South Korea plans to complain to the WTO.  urn:newsml:reuters.com:*:nL4N2491GT
    Japan announced the curbs on the exports of materials used
in smartphone displays and chips last week, amid a growing
dispute over South Koreans forced to work for Japanese firms
during World War Two.  urn:newsml:reuters.com:*:nL4N2420DG 
    Also caught in the fray are Japanese chemical suppliers such
as JSR  4185.T  and Stella Chemifa  4109.T , which are exploring
ways to supply South Korean clients from plants outside Japan.
 urn:newsml:reuters.com:*:nL8N2490TE
    Japanese and South Korean officials plan to hold talks in
Japan as early as this week on the export restrictions, the
Yomiuri newspaper said on Tuesday. 
    Chief Cabinet Secretary Yoshihide Suga said South Korea had
asked Japan for an explanation of the curbs and that
working-level officials would respond. The schedule was being
arranged, he added.
    South Korea's trade ministry is in talks with its Japanese
counterpart about the timing and agenda, but nothing has been
decided, a ministry spokeswoman said. 
    The countries share a bitter history dating to Japan's
colonisation of the Korean peninsula from 1910 to 1945, which
saw forced use of labour by Japanese companies and the use of
"comfort women", a euphemism for those forced to work in wartime
brothels.
    The latest dispute stems from a South Korean court ruling
last year that ordered Nippon Steel  5401.T  to compensate
former forced labourers.
    Japan says the issue of forced labour was fully settled in
1965, when the two countries restored diplomatic ties.

 (Reporting by Takaya Yamaguchi, Kaori Kaneko, Chris Gallagher
in TOKYO and Hyunjoo Jin in SEOUL; Writing by Chris Gallagher;
Editing by Clarence Fernandez)
 ((chris.gallagher@thomsonreuters.com; https://twitter.com/ChrisGallagher4;
 81-3-6441-1842; Reuters Messaging:
chris.gallagher.thomsonreuters.com@reuters.net))