South Korea to take measures against Japan’s export restrictions, including appealing to WTO

South Korean government denounces Japan’s retaliatory action and says it will respond with counter-measures

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(By Associated Press)

TAIPEI (Taiwan News) – The South Korea government announced that it is working on countermeasures, including but not limited to a World Trade Organization (WTO) case against Japan’s export restrictions on semiconductor and display materials, which took effect on Thursday (July 4).

Minister of Economy and Finance Hong Nam-ki (洪楠基) denounced the export restrictions as “blunt economic retaliation” against a Korean court's decision to order Japanese firms to compensate South Koreans forced into labor during World War Two, NHK reports.

“If Japan does not withdraw the restrictions, [South Korea] will take various appropriate countermeasures,” Hong said on Thursday. “A WTO case takes quite a long time, so it will not be our only alternative,” he added.

South Korean Foreign Minister Kang Kyung-wha (康京和) also denounced the restriction as “unreasonable and contrary to common sense” on Wednesday (July 3), the Yonhap News Agency reports. “Japan has damaged its own international credibility with its latest measure and damaged the economic relations that the two countries have maintained for a long time,” she added.

Seko Hiroshige (世耕弘成), the Japanese Minister of Economy, Trade, and Industry, responded on Wednesday that it is only natural for a country to manage exports of materials that could be used to produce firearms, according to NHK. “Of course [Japan is] not considering a withdrawal at all,” he added.

Seko reemphasized that the restrictions are not a retaliatory measure, but that the government is merely reevaluating the mutual trust between the two countries. When asked if it would hurt Japanese companies who rely on South Korean-made semiconductors and monitors, Seko only responded that the ministry would "keep a close watch" on the situation.

The materials subject to the export restrictions include fluorinated polyimide, hydrogen fluoride, and resists, which are widely used in the manufacture of chips and displays and are nearly monopolized by Japan.

The Japanese government announced on Monday (July 1) that it would remove South Korea from its “white list,” meaning that the country would no longer enjoy preferential treatment on exports. Although Japan has repeatedly claimed that this does not equate to a sanction, it can in effect control the supply of the materials by prolonging bureaucratic procedures, writes Nikkei News.

The relationship between the two countries is at its historic lowest point since the end of the Second World War, in part due to the quarrel over South Korea's Supreme Court ruling. Japan insists that any obligation of compensation has been settled “completely, and finally” under a 1965 bilateral agreement.

Japan has proposed setting up a three-country arbitration panel under the 1965 agreement, a proposal the Korean government has ignored. Earlier this month, Minister of Trade, Industry, and Energy Sung Yun-mo (成允模) denounced Japan’s continuous efforts to force President Moon Jae-in's administration to meddle with judicial rulings.