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Yoo Myung-hee, South Korea’s candidate for director-general of the World Trade Organization. (provided by the Ministry of Trade, Industry, and Energy)

The South Korean and Japanese governments’ dispute over the World Trade Organization (WTO) is heating up. After South Korea lodged a complaint with the WTO over Japan’s export controls, Japan is poised to block South Korea’s attempt to fill the seat of WTO director-general.

On July 7, the Japanese government declared that it means to intervene in the election of the WTO director-general, a seat for which South Korean Trade Minister Yoo Myung-hee is vying.

“It’s important that [the WTO director-general] be a person capable of exercising leadership in the COVID-19 response and WTO reform. In that respect, Japan wants to be definitively involved in the election process,” Industry Minister Hiroshi Kajiyama said during the daily press briefing on Tuesday.

The deadline for submitting candidates for director-general is July 8. As of the previous afternoon, Yoo was one of five people in the running, alongside candidates from Mexico, Nigeria, Egypt, and Moldova. EU Trade Commissioner Phil Hogan, who had been regarded as the leading contender for the position, recently pulled out of the race.

Amid cautious predictions that Yoo could be Korea’s first WTO director-general, Japan is likely to push harder to prevent that from happening. The South Korean government plans to respond by mobilizing its global diplomatic network to persuade WTO member states of the need for a middle power to play a mediating role.

While the Japanese government hasn’t voiced overt support for or opposition to Yoo’s candidacy, it’s clearly wary of South Korea’s bid for the position given its ongoing spat with South Korea over export controls. The WTO director-general is selected by canvassing support for each candidate among the 164 member states and eliminating the least popular candidates, one at a time, until just one remains. While the selection process typically takes six months, the current vacancy of the director-general position makes it likely that the process will be sped up to end the leadership vacuum.

The Japanese press has taken considerable interest in Yoo’s candidacy for director-general. The Yomiuri Shimbun said that “the big question is how Japan will respond [to Yoo’s candidacy] given its dispute with South Korea over Japan’s tougher export controls.” Jiji Press reported earlier that “the Japanese government is cautious about South Korea increasing its international clout by filling the director-general position.” The Sankei Shimbun reported that “the election of a South Korean director-general would create an element of uncertainty for Japanese trade policy.”

Bilateral battle of nerves already intensifying; WTO to launch review of Japan’s export controls

South Korea and Japan’s battle of nerves is already intensifying even though the WTO has yet to launch its review of South Korea’s complaint about Japan’s export controls. One skirmish took place on July 6, when Japan became the topic of a WTO discussion about member states’ overall trade policy in a meeting in Geneva, Switzerland.

“The Japanese government’s measures to toughen controls on exports of semiconductor materials to South Korea in July of last year were all invalid because they lacked a legitimate rationale,” the South Korean delegate said in a meeting that was attended by representatives from some 40 countries and regions, according to Japanese broadcaster NHK. South Korea was protesting the unfairness of the Japanese measures before the international community.

Tensions have risen as Japan has overtly obstructed the process of reviewing its export controls. The WTO’s Dispute Settlement Body attempted to set up a panel to handle the issue of Japan’s export controls on June 29, but that effort was thwarted by Japan. As a result, the question of setting up the panel will likely be decided on July 29. WTO rules state that when the subject of the complaint refuses to set up a panel, the panel will be automatically set up at the next meeting, barring the unanimous opposition of all member states.

By Kim So-youn, staff reporter

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