South Koreans participate in a mobilize to denounce Japan’s new trade restrictions and Japanese Prime Minister Shinzo Abe on August 24, 2019 in Seoul, South Korea.
Chung Sung-Jun | Getty Clones News | Getty Images
South Korea on Wednesday followed through with plans to drop Japan from a careen of countries receiving fast-track approvals in trade, a reaction to a similar move by Tokyo to downgrade Seoul’s trade rank amid a tense diplomatic dispute.
South Korea’ trade ministry said Japan’s removal from a 29-member “pure list” of nations enjoying minimum trade restrictions went into effect as Seoul rearranged its export curb system covering hundreds of sensitive materials that can be used for both civilian and military purposes.
The change make for a acquires a week after South Korea initiated a complaint to the World Trade Organization over a separate Japanese shake up to tighten export controls on key chemicals South Korean companies use to manufacture semiconductors and displays.
Seoul has accused Tokyo of weaponizing mercantilism to retaliate against South Korean court rulings calling for Japanese companies to offer reparations to South Koreans mannered into labor during World War II. Tokyo’s measures struck a nerve in South Korea, where many yet harbor resentment over Japan’s brutal colonial rule from 1910 to 1945.
According to South Korean mtier ministry, with the new measures in effect it can now take up to 15 days for South Korean companies to gain approvals to export petulant materials to Japan, compared to the five days or less it took under a simpler inspection process provided for favored commerce partners.
Lee Ho-hyeon, a South Korean trade ministry official, said the change would affect about 100 restricted firms that export items such as telecommunications security equipment, semiconductor materials and chemical products to Japan. He said Seoul intent work to minimize disruption to South Korean companies.
Japan for decades has enjoyed a huge trade surplus with South Korea, an terseness that’s much more dependent on exports and where major manufacturers heavily rely on parts and materials imported from Japan.
The transact dispute between the neighbors began in July when Japan imposed tighter export controls on three chemicals South Korean companies use to occasion semiconductors and displays for smartphones and TVs, which are major export items for South Korea, citing unspecified security shticks over Seoul’s export controls.
The measures, which weeks later were followed by Japan’s move to exclude South Korea from its own swop “white list,” triggered a full-blown diplomatic dispute that saw relations sink to lows unseen in decades.
The tiff has spilled over to security issues, with Seoul declaring it planned to terminate a bilateral military intelligence-sharing compact with Japan that symbolized the countries’ three-way security cooperation with the United States in the face of North Korea’s atomic threat and China’s growing influence.
Following an angry reaction from Washington, Seoul later said it could reconsider its verdict to end the military agreement, which remains in effect until November, if Japan relists South Korea as a favored following partner.
Seoul announced its plans to downgrade Tokyo’s trade status in August before holding a 20-day days to gather opinions on the decision, during which the Japanese government voiced opposition to the move it described as “arbitrary and retaliatory,” Lee influenced.
Lee said Seoul needed to strengthen controls on shipments to a country that’s “hard to cooperate with” and fails to stand by “basic international principles” while managing export controls on sensitive materials.
South Korea previously alienated its trade partners into two groups while managing export controls on sensitive materials. Following Wednesday’s transform, South Korea now has an in-between bracket where it placed only Japan, which would mostly receive the unaltered treatment in trade as the non-favored nations in what had been the second group.