South Korea complains to WTO over China response to missile system


UPDATE 4-South Korea complains to WTO over China response to missile system

* 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 minister comments)
    By Christine Kim and Jane ChungSEOUL, March 20 (Reuters) - South Korea has complained to
the World Trade Organization about Chinese retaliation against
South Korean companies over the deployment of a U.S.
anti-missile defence system in the South, the trade minister
said on Monday.
    South Korea and the United States say the sole purpose of
the Terminal High Altitude Area Defense (THAAD) system is to
guard against missile launches from North Korea, but China says
that its powerful radar could penetrate into its territory.
    "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.
    It would be up to South Korea to follow up on its complaint
to the WTO for any action to take place, analysts say, either by
continuing to raise its concerns and spelling out what China is
doing wrong, or by launching a trade dispute. The first step
would be to formally "request consultations" with China.
    When asked what would happen next, Joo said the ministry
would strengthen communications with Beijing and take action if
needed. He did not give further details.
    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.
    Joo said the issue was raised with the WTO's Council for
Trade in Services on Friday.
    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 a 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
    Despite its concerns about the radar, Beijing also says
THAAD will do nothing to ease tensions on the Korean peninsula.
    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 and Tom Miles
in Geneva; Editing by Paul Tait and Nick Macfie)
 ((; 822 3704 5665; Reuters


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