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WORLD NEWS Tuesday 30 July 2019

Japan-Korea trade spat to intensify with new export limits

By MARI YAMAGUCHI of forced labor and sexual
ELAINE KURTENBACH abuse of Korean women in
Associated Press military brothels during the
TOKYO (AP) — Antago- Japanese occupation of
nisms between South Ko- the Korean peninsula in the
rea and Japan are already early 20th century.
at the boiling point. They're Until recently, such issues
bound to deepen with To- had not affected trade
kyo's plan to expand con- between the two coun-
trols over exports of sensi- tries, both of which depend
tive materials by dropping heavily on exports. Japan
its neighbor from a list of 27 has run a perennial trade
countries granted prefer- surplus with South Korea,
ential trade status. at $20.3 billion in 2018, with
The decision, expected parts, chemicals and other
soon, will ripple across the materials and equipment
high-tech sector, further accounting for about $15
shaking up supply chains billion of its exports last year.
already rattled by trade The tighter approvals on
tensions between the U.S. the three items newly sub-
and China. ject to licensing controls
As of July 4, Japanese — fluorinated polyimides,
companies need case-by- photo resists and hydro-
case approvals to export gen fluoride — have had
to South Korea three mate- In this July 24, 2019, file photo, South Korea's Minister of Trade, Industry and Energy Sung Yun-mo a limited impact, analysts
speaks during a press conference on Japan's trade restrictions against South Korea at the govern-
rials used to make semicon- ment complex in Seoul, South Korea. say, because South Ko-
ductors and displays used Associated Press rean companies had at
in smartphones and other least 3-month stockpiles of
high-tech devices. riod ended Wednesday, sell a huge array of prod- up illegally in North Ko- the computer chips and
With the loss of South Ko- Japan's trade minister Hi- ucts ranging from alloys of rea since South Korea was displays that would be af-
rea's so-called "white coun- roshige Seko said Japan aluminum to freeze dryers added to the white list in fected, thanks to slowing
try" status, that requirement plans to go ahead and strip and vacuum pumps. 2004, government docu- demand and worries over
will apply to dozens more South Korea of its preferred Approvals of such exports ments show. trade tensions between the
products on a list of items status for export licensing. could take up to 90 days, Adding another layer of U.S. and China.
that potentially could be He said Seoul had failed slowing but not halting ship- ambiguity to the diplomat- But the tightening controls
converted to weapons, to provide a convincing ments. But ending South ic dispute, Tokyo also has are adding to uncertainty
according to a Japanese explanation to address Ja- Korea's "white country" sta- expressed dissatisfaction for technology manufac-
trade ministry document. pan's doubts that South tus would also mean Japan over demands for compen- turers: According to IHS
That's in addition to more Korean export controls are could limit exports of any sation for people forced to Markit, in 2018 Korean firms
than 200 other items requir- strict enough to prevent product on national secu- work for Japanese com- SK Hynix and Samsung
ing individual inspection for sensitive materials from po- rity grounds. panies before and during Electronics supplied 61% of
exports to all countries. tentially being misused. Officials say Japan found World War II, an issue Ja- memory components used
Japan's trade ministry says Officials are studying opin- some sensitive items were pan says it settled under in various electronics, rely-
Seoul has undermined a ions submitted to the gov- shipped to South Korea the 1965 treaty normalizing ing heavily on Japanese
"relationship of trust," in- ernment, but that's largely "with inadequate man- relations. suppliers. "If restrictions re-
cluding export controls, a formality. agement by companies" Japan and South Korea main, Korean chipmakers'
with lax controls on re- Chief Cabinet Secretary — without giving specific are both important hosts production lines and there-
exports to other countries. Yoshihide Suga has not examples or saying which for U.S. military bases in East fore global semiconductor
South Korea denies that, as confirmed reports the Cab- Japan-based companies Asia. But they've been bick- supply chains are likely to
meanwhile tensions have inet will approve the plan were at fault. ering for years over a territo- be disrupted. Korean chip-
risen with some South Kore- as early as Aug. 2. If it does, In at least five cases that rial dispute and over South makers are major actors in
ans calling for boycotts of the new rules would take were exposed and penal- Korean demands for more global semiconductor sup-
Japanese products. effect on Aug. 23, forcing ized, Japanese exports to contrition and compensa- ply chains," Fitch Ratings
As a "public comment" pe- exporters to get licenses to South Korea have ended tion from Japan for its use said in a recent report.q