Japan expresses regret over WTO panel on trade dispute with S.Korea

SEOUL, July 30 (Reuters) - Japan's trade ministry on Thursday expressed regret over the World Trade Organization's decision to set up a panel to rule on Tokyo's export curbs on some technology materials to South Korea, in an escalating dispute stemming from wartime history.

In July 2019, the Japanese government said it would stop preferential treatment for shipments to South Korea of three materials that companies such as Samsung Electronics Co Ltd use to make smartphone chips and displays.

The WTO set up the dispute settlement body on Wednesday despite Tokyo's opposition, said South Korea, which filed the complaint.

South Korea's trade ministry said it plans to prove that Japan's export restriction measures are "arbitrary and discriminatory" and to urge Tokyo to withdraw the measures as soon as possible.

It usually takes 10 to 13 months for the WTO dispute settlement body to make a final decision, Seoul said.

A Japanese trade ministry official said that Japan believes the issue should be resolved through dialogue and that it is regrettable that South Korea acted in a way that could spoil talks between the two countries.

South Korea last year filed a WTO complaint over Japan's tighter export controls, but Seoul in November suspended the proceedings.

In June, however, South Korea said it would recommence the WTO action, citing little progress in talks with Japan.

Bilateral relations deteriorated after a South Korean court ruling ordering Japanese firms to pay compensation to Koreans forced to work for them during World War Two.

Japan also this week condemned a statue in South Korea that appears to depict Japan's prime minister, Shinzo Abe, kneeling and bowing to a seated "comfort woman," a euphemism for women forced to work in Japan's wartime brothels. (Reporting by Hyunjoo Jin in SEOUL and Makiko Yamazaki in TOKYO. Editing by Gerry Doyle)