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South Korea and China: WTO complaint must be resolved swiftly and amicably

In July 2016, American and South Korean military officials agreed to deploy the Terminal High Altitude Area Defense (THAAD) missile defense system in South Korea. China was unimpressed, seeing the move as an act of aggression and intimidation by the US close to its borders, as well as citing concerns that it could interfere with the efficacy of its own military capabilities.

On March 20, 2017, South Korea complained to the WTO that China’s unease with the THAAD situation has caused it to retaliate economically, although it was keen to point at that at this stage, they are just making the organization aware of potential breaches and that the complaint does not constitute legal action. In this sense, the action is more a request for the WTO to look in to whether China is in violation of trade agreements, agreements with which the country has been extremely eager to align itself in the face of strong rhetoric from President Trump.

The alleged economic retaliation has taken several forms: travel agents have been banned from selling group packages to South Korea, shows starring Korean artists have been cancelled on visa grounds, the distribution of Korean TV shows has been suspended, and numerous Lotte Mart stores and a chocolate factory have been temporarily closed due to alleged fire safety breaches. The list goes on.

Chinese media and authorities are behind this, although they remain quiet on the matter, and the issue is of huge concern to a South Korean economy overly-reliant on China. However, China does not want to damage relations permanently and it is therefore it is therefore crucial for all parties that the whole issue is resolved as swiftly and amicably as possible. The WTO will look to ease through a resolution that does not involve legal action and a lot of publicity, and China, having now made its point, will likely play ball, safe in the knowledge that it has been successful in making a point that will force South Korea to think about its interests in future.