S.Korea complains to WTO over China's response to anti-missile system-minister


UPDATE 3-S.Korea complains to WTO over China's response to anti-missile system-minister

* S.Korean minister says China appears to violate trade
    * China is South Korea's largest trading partner
    * Tension grows over deployment of anti-missile system

 (Adds Chinese Foreign Ministry comment)
    By Christine Kim and Jane ChungSEOUL, March 20 (Reuters) - South Korea's trade minister
said on Monday Seoul had complained to the World Trade
Organization (WTO) about China's retaliation against South
Korean companies over the deployment of a U.S. anti-missile
defence system in the South.
    "We have notified the WTO that China may be in violation of
some trade agreements," Trade Minister Joo Hyung-hwan told
parliament in response to questions about China's reaction to
the deployment of the Terminal High Altitude Area Defense
(THAAD) system in South Korea.
    Joo said the issue was raised with the WTO's Council for
Trade in Services on Friday after China imposed restrictions on
South Korean companies in the tourism and distribution sectors.
    A trade ministry official, who asked not to be identified
because of the sensitivity of the matter, said the complaint
could not be categorised as legal action but was rather a
request for the WTO to look into whether China was upholding
trade agreements fairly.
    In Beijing, Chinese Foreign Ministry spokeswoman Hua
Chunying did not comment directly on the WTO complaint.
    "We support normal business and other exchanges between
China and South Korea," Hua told a daily news briefing. "But
everyone knows this needs a corresponding basis in public
    South Korea and the United States say the sole purpose of
the THAAD system is to guard against missile launches from North
Korea but China has been infuriated by its deployment, saying
that its powerful radar could penetrate into its territory.
    Beijing also says THAAD will do nothing to ease tensions on
the Korean peninsula.
    China is South Korea's largest trading partner and the
dispute over THAAD has resulted in a sharp decline in Chinese
tourists in the South's shopping districts.
    Chinese authorities have also closed nearly two dozen retail
stores of South Korea'sLotte Group amid the diplomatic
standoff. [nL3N1GJ15G]
    Beijing has never explicitly linked the restrictions to the
THAAD deployment, but the South Korean government has offered
cheap loans and extended deadlines on existing debt to help
businesses that have been affected and has pushed to diversify
trade markets.
    Lawmakers ramped up their criticism of what they say has
been the government's lack of an aggressive response to China's
actions, which also include a freeze on South Korean television
dramas, as well as music and product boycotts. [nL3N1GS2AM]
    Seoul's options, however, look limited.
    Efforts to hold direct discussions between the finance
ministers of China and South Korea at a Group of 20 meeting in
Germany at the weekend fell through after Beijing declined
Seoul's request to meet, citing scheduling reasons.

 (Additional reporting by Ben Blanchard in Beijing; Editing by
Paul Tait)
 ((christine.kim@thomsonreuters.com; 822 3704 5665; Reuters
Messaging: christine.kim.thomsonreuters.com@reuters.net))


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