Japanese media report the country may sue the South Korean government at the World Trade Organization over subsidies paid to South Korean shipbuilders.

The South Korean Foreign Ministry says Tokyo has proposed bilateral talks on the issue, implying it has begun taking the case to the WTO dispute settlement panel.

Seoul says the subsidies are provided by state-affiliated financial institutions at their own discretion, but Tokyo believes they violate international trade rules.

Since 2015, the South Korean institutions have provided assistance worth eleven billion U.S. dollars to cash-strapped Daewoo Shipbuilding and Marine Engineering, which enabled Daewoo to cut product prices in the global market.