Japan, South Korea fail to end trade dispute

Japan and South Korea have failed to mend a dispute that could threaten global supplies of microchips and smartphone displays, after officials met in Tokyo on Friday for a more than five-hour briefing that drew media attention for its frosty start.

Japan has tightened restrictions on the export of three materials used in high-tech equipment, officially citing what Japan has called "inadequate management" of sensitive items exported to South Korea, as well as a lack of consultations about export controls.

However, the dispute also appears to be rooted in a decades-old wartime disagreement. It comes amid deep frustration in Japan over what is seen as Seoul's failure to act in response to a South Korean court ruling ordering a Japanese company to compensate former forced laborers.

The briefing in Tokyo got off to an uncomfortable start when two South Korean bureaucrats were ushered into a narrow room in the Japanese trade ministry, where their Japanese counterparts were already seated.

Neither side greeted the other and, in front of television cameras, they faced each other in stony silence. A Japanese official later explained that the bureaucrats had earlier met and exchanged greetings. South Korean media, however, reported there was a "cold reception" for their officials, and that the meeting took place in a room that looked like a "garage."

Japan told South Korea that its trade controls system was vulnerable, the Japanese official told reporters after the meeting.

South Korea said it has proposed more talks with Japan by July 24. Japan did not say whether it would accept the request for more talks, made at a meeting in Tokyo, Lee Ho-hyeon, a director at South Korea's trade ministry, told a briefing in Seoul.

The dispute between the US allies could disrupt supplies of chips and displays from South Korea's tech giants Samsung Electronics and SK Hynix, which count Apple Inc and other smartphone makers as customers.

SS