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54 J. World Trade 591 (2020)
Litigating, Arbitrating and Mediating Japan-Korea Trade and Investment Tensions

handle is hein.kluwer/jwt0054 and id is 603 raw text is: Litigating, Arbitrating and Mediating Japan-Korea Trade and Investment Tensions James M. CLAXTON*, Luke NOTTAGE** & Brett WILLIAMS*** In July 2019, Japan introduced measures tightening export restrictions to South Korea on three chemicals critical to the manufacture of consumer electronics. The restrictions prompted an animated response by the Korean government that has included WTO consultations and threats to terminate an intelligence-sharing agreement with Japan. Meanwhile, the controversy has filtered down to the public with boycotts of Japanese products in Korea. Tension between the states has been unusually high since late 2018 when the Korean Supreme Court affirmed a judgment against Japanese companies accused of forcing Korean nationals to labour for them during Japan's colonial rule. Japan argues that such claims are precluded by a 1965 treaty normalizing post-war relations. While Japan states that its trade restrictions were not motivated by the judgment, the disputes have together contributed to the worst breakdown in cross-border relations in five decades. This article evaluates Korea's trade claims against Japan, means of resolving them, and the challenges that the claims face in the WTO dispute settlement system. The article also considers claims from the Japanese side through the International Court ofJustice (ICJ), inter-state arbitration, and investor-state dispute settlement. We conclude that formal mediation offers an effective means to facilitate negotiations and centralize the WTO and other treaty disputes in a single forum involving multiple stakeholders. Keywords: WTO, Japan, Korea, ISDS, mediation, arbitration, export, international trade law, investment treaties 1 INTRODUCTION: COMPLEX MULTI-FACETED TENSIONS A media and geopolitical storm erupted from mid-2019 after Japan introduced mea- sures affecting exports to the Republic of Korea (Korea). Thunder sounded with Japan's imposition of certification requirements on three chemicals needed by South Korean companies to make semiconductors, memory chips and displays for consumer electronics (the 4 July Measure). This was followed by lightning and rain when Japan removed Korea from its 'white list' of trusted trading partners (the 2 August Measure), Professor of Law, Rikkyo University. Email: jclaxton@claxtonidr.com. Professor and Associate Director (Japan), Centre for Asia and Pacific Law at the University of Sydney (CAPLUS). Email: luke.nottage@sydney.edu.au. Principal, Williams Trade Law & CAPLUS Associate. We thank Ashley Taylor Kelaita, LLM candidate and CAPLUS intern, for superlative research and editorial assistance. Email: williams@williamstradelaw.com. Claxton, James M., Nottage, Luke & Williams, Brett. 'Litigating, Arbitrating and Mediating Japan-Korea Trade and Investment Tensions'. Journal of World Trade 54, no. 4 (2020): 591-614. © 2020 Kluwer Law International BV, The Netherlands

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