Nov. 6 (UPI) -- Japan has requested talks with South Korea over alleged South Korean shipbuilding subsidies, while the government could also be preparing to sue Seoul over the dispute.
Tokyo's transport ministry stated online on Tuesday that the government is calling for a resolution based on World Trade Organization norms and rules, South Korean news agency Yonhap reported.
South Korean government subsidies to private shipbuilders are not a violation of WTO rules, according to a landmark ruling in 2004, but Japan has claimed the subsidies are unfair because of the price pressure exerted upon Japanese shipbuilders.
"We have conveyed concerns to South Korea that [the subsidies] could distort the market, but there have been no moves to correct the practice," said transport minister Keiichi Ishii, according to Kyodo News on Tuesday.
The ministry said in its official statement the South Korean government has repeatedly denied allegations of "market distortion."
The Japanese government claims South Korea has provided a total of $11 billion of financial assistance, to companies like Daewoo Shipbuilding & Marine Engineering Co., Ltd.
The Financial Times reported Tuesday Japan is making the announcement to prepare for a lawsuit against South Korea.
The paper's Japanese sources said they are in the "final stages of preparing a case after three years of bilateral talks."
Relations between the two countries have deteriorated in 2018, and the WTO dispute comes after the two countries disagreed over reparations for Korean wartime forced laborers during World War II.