Japan rejects South Korea’s plan to revoke top-tier trade partner status

Sep 04 , 2019. KYODO NEWS.

TOKYO – Japan’s industry ministry on Tuesday questioned the rationale behind South Korea’s decision in mid-August to remove the country from a list of preferred trading partners in the latest escalation of the Asian neighbors’ feud.

The Ministry of Economy, Trade and Industry submitted its opinion to South Korea regarding the decision announced on Aug. 12 to end preferential trade status for Japan, apparently in direct response to Tokyo’s earlier revocation of Seoul’s trusted trade status.

The ministry sent its opinion and sought clarification for reasons behind the plan to tighten trade controls as the South Korean government is currently accepting public comments on the matter.

If South Korea goes ahead with the removal of Japan from the list of top-tier trade partners “without answering questions on its rationales and details, the revision would be assumed as arbitrary and illegitimate countermeasures to Japan,” the ministry said in a statement.

In addition to more restrictive conditions for applying for comprehensive licenses for exporting strategic goods to Japan, an export approval process will also be extended to between five and 15 days.

The decision came after Japan on Aug. 28 removed South Korea from its “white list” of preferred trade partners that enjoy minimum trade restrictions on goods such as electronic components that can be diverted for military use.

Japan had already implemented in July tighter controls on exports of some materials needed by South Korean manufacturers of semiconductors and display panels including Samsung Electronics Co. and SK Hynix Inc.

The move was widely seen as retaliation for South Korean court decisions last year ordering compensation to be paid to people claiming to have been forced to work in Japanese factories during Japan’s colonial rule of the Korean Peninsula from 1910 to 1945.

Japan maintains that the issue of compensation was settled “finally and completely” by a 1965 bilateral agreement, under which it provided South Korea with $500 million in financial aid.

Japan has said its tighter export rules were adopted after discovering “inappropriate” cases of export controls related to South Korea.

CR:KYODO NEWS