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Korean Gov’t Gave Up Instituting Lawsuit against China’s Retaliation to WTO
Deliberate Ostracism
Korean Gov’t Gave Up Instituting Lawsuit against China’s Retaliation to WTO
  • By Jung Suk-yee
  • October 13, 2017, 18:30
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Minister of trade, industry and energy Baek Woon-kyu answers questions from lawmakers during an audit of the Ministry of Trade, Industry and Energy by the National Assembly on Sept. 13.
Minister of trade, industry and energy Baek Woon-kyu answers questions from lawmakers during an audit of the Ministry of Trade, Industry and Energy by the National Assembly on Sept. 13.

 

It has been found that even though China's economic retaliation against Korea for the deployment of the THAAD System was continuing, the Korean government judged that China’s retaliation violated rules of the WTO and the Korea-China Free Trade Agreement (FTA), but gave up using a card to complain to the WTO about it.

Under the circumstances, many lawmakers ran down the government, saying, “The government's responses were insufficient.” As even ruling party lawmakers criticized government trade authorities’ lack of ability to cope with China’s retaliation, mentioning estimated damage to Korea, lawmakers of opposition parties lambasted the government much more.

“The volume of Korea’s trade with China hit about 160 trillion won including commodities and tourism,” said Park Jung, a lawmaker of the ruling Minjoo Party during an inspection of the Ministry of Trade, Industry and Energy by the Industry, Commerce, SMEs and Venture Business Committee at the National Assembly on September 13. “The Korea Development Bank estimates damage to Korean companies by China’s retaliation at 22 trillion won.”

"87 of Lotte Mart's 99 Chinese stores shut down in half a year and Lotte Mart suffered loss of 1,225 billion won," said Kim Soo-min, a lawmaker of the People’s Party. “An unusual situation where Lotte Mart suffered a 70% drop in sales this year compared to last year leads people to have no choice but to blame the situation on China’s retaliation against Korea."

"We have received 247 cases of damages that stemmed from China’s retaliation against Korean companies for the deployment of the THAAD System," said lawmaker Lee Chan-yeol of the same party. "Korean companies of all sizes are suffering from China’s retaliation but the government did not tackle the matter properly and wisely. The ministry said that they will actively respond to the matter such as filing a lawsuit against China to the World Trade Organization (WTO) on September 13, but next month, Cheong Wa Dae showed an about-face, saying, "We will address this issue by strengthening strategic communications and cooperation between Korea and China."

"Materials from the Ministry of Trade, Industry and Energy say that the Korean government asked a Korean law firm whether or not China’s actions in the fields of distribution and tourism in March were violations of WTO rules and the Korea-China FTA,” said Jung Yoo-seop, a lawmaker of the opposition Liberty Korea Party. “It is said that after a legal review, the law firm judged that China's measures in the distribution and tourism sectors contravened some provisions of WTO rules and the Korea-China FTA which specify treatments for the most favored nations, market access and transparency.”

"If reprisals had been taken not by China but by America or Japan, candlelight vigils would have taken place right away," lawmaker Jung said sarcastically. "They (those who participated in candlelight vigils) are mostly pro-North and anti-American people, right?"

When asked “Cheong Wa Dae (Korea’s White House) gave up bringing the case to the WTO. Did you drop a lawsuit card?” by Jung Woo-taek, a lawmaker of the Liberty Korea Party, minister Baek said, "Complaining to the WTO will be used as a dispute resolution card. It is necessary to have strategic communications with China in connection with North Korea’s nuclear provocations and the Chinese Communist Party’s coming 19th convention. We will deal with related matters while communicating with Cheong Wa Dae."

"Even though various law firms and experts advised to us that China’s retaliation could be regarded as a violation of WTO rules, instituting a lawsuit to the WTO should be decided after taking into consideration situations such as an agreement to extend a Korea-China currency swap. We will not bring the case to the WTO right now,” trade minister Kim Hyeon-jong said.

The Ministry of Trade, Industry and Energy announced that the ministry would actively consider complaining to the WTO about China’s retaliation at the beginning of this year but drop a card to file a lawsuit to the WTO as Cheong Wa Dae said last month that it was high time to maintain cooperation with China due to the North's nuclear weapon development program and missile provocations. The Korean government did not raise any issue about China’s retaliation in the Services Council of the WTO held in Geneva, Switzerland on October 6.