The high-tech trade dispute rooted in Japan's wartime history

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He said South Korea would be left no choice but to take countermeasures if the Japanese trade controls damage South Korean companies.

The number of South Korean tourists to Japan fell almost five percent in the January-May period from a year earlier, government data showed Sunday, with travel demand to Japan expected to fall further following Japan's export curbs.

According to the Ministry of Trade, Industry and Energy, South Korea recorded a deficit of 6.7 billion USA dollars in trade of industrial parts and materials with Japan in the first half of this year.

The Japanese government had given three-year permits to Japanese suppliers to export the three materials to South Korea. He added that South Korea has not yet asked Japan to resolve the dispute through the WTO.

Despite calls from Seoul for negotiations on the thorny issue, Tokyo appears to be considering expanding the export restrictions.

Japan has cited an "inappropriate case" in adopting the tougher export rules, with Prime Minister Shinzo Abe indicating a connection with sanctions imposed on North Korea over its nuclear weapons and missile development programs.

It is feared the measures will hurt the global supply of semiconductors as South Korean manufacturers, which are dominant players in the market, depend heavily on Japan for key input materials.

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In some of the sharpest comments yet, South Korean Industry Minister Sung Yun-mo urged Japan to "stop making groundless claims immediately", an apparent response to a Japanese media report last week.

The curbs apply to three materials where Japan is dominant: photoresists, used to transfer circuit patterns onto semiconductor wafers; hydrogen fluoride, used as an etching gas in the chipmaking process and fluorinated polyimides, used in smartphone displays. Although 59.9 percent said the trade row would have a negative impact on the industry, majority of 46.8 percent said they don't have any countermeasures to address the situation.

Paik Ji-ah, ambassador of the South Korean Mission in Geneva, will also participate in the WTO council meeting along with Jung Kyung-rok, director in charge of WTO affairs at the trade ministry.

Japan says the issue of forced labour was fully settled in 1965 when the neighbours restored diplomatic relations.

Japan was "not thinking at all" of withdrawing the curbs and they did not violate World Trade Organisation rules, Industry Minister Hiroshige Seko said.

The dispute stems from Japan's frustration over what it sees as South Korea's failure to act in response to a ruling by one of its courts last October ordering Japan'sNippon Steel Corp to compensate former forced labourers.

The forced wartime labour issue is the latest flashpoint in a relationship long over-shadowed by South Korean resentment of Japan's 1910-1945 occupation of the Korean peninsula.