Business

South Korean leader urges Japan to withdraw export curbs as survey shows most Japanese back them

Bloomberg, AP

South Korean President Moon Jae-in urged Japan on Monday to withdraw new export restrictions in his first public remarks regarding the dispute that erupted last week and has intensified animosity between the two countries.

In a meeting with senior aides, Moon called for Japan to withdraw what he described as a politically motivated measure, and for “sincere” bilateral discussion of the issue.

He said South Korea would be left no choice but to take unspecified countermeasures should the Japanese trade curbs result in actual harm to South Korean firms.

“The recent trade curbs imposed by Japan have raised concern over disruption in production for our companies and the threat it poses to global supply chains. … There are global concerns over the move to limit mutually beneficial trade between civilian companies for political purposes,” Moon said.

“A vicious cycle created by measures and countermeasures wouldn’t be ideal for both countries. But if South Korean companies begin experiencing actual damages, our government would have no choice but to (take) a necessary response,” he said before adding he hopes things don’t come to that.

Moon’s comments came as a new poll showed that most Japanese approve of the government’s decision to tighten controls on exports to South Korea of key materials needed by its tech industry.

Some 58 percent of respondents to the survey carried out by the Japan News Network said they approve of the government’s policy, compared with 24 percent who do not.

Prime Minister Shinzo Abe on Sunday reiterated denials that the checks were a form of retaliation against South Korea for recent court rulings holding Japanese companies liable for cases of forced labor before and during World War II. Japanese officials have said the judgments damaged trust between the U.S. allies and risked undermining the 1965 treaty that forms the basis of their relations.

While the stricter checks on three specialist materials — which took effect Thursday — don’t amount to a ban, exporters will be required to obtain a separate license each time they want to sell the materials to South Korea, causing delays.

Japan is also considering removing South Korea from a list of trusted export markets, a move that could affect a broader swath of products.

South Korea’s government and top electronics firms scrambled to tackle the situation. Samsung Electronics Co. Vice Chairman Jay Y. Lee traveled to Japan on Sunday to discuss the tighter controls with local business leaders, Yonhap News reported.

Finance Minister Hong Nam-ki held discussions on the “external economic situation” with the heads of top domestic companies over the weekend, Moon’s office said in a statement. Moon, who has not responded publicly to the measures, is set to meet industry leaders on Wednesday, according to Yonhap.

The Seoul Metropolitan Government will provide emergency funds to domestic companies affected by Japan’s export restrictions on South Korea’s crucial tech industry, Yonhap reported, citing Cho In-dong, an economic policy officer at the city’s office.

Analysts say the measure won’t have a meaningful impact immediately on South Korean companies like Samsung Electronics and SK Hynix Inc., which both have sufficient supplies of the materials for now, given the slowdown in demand for semiconductors.

However, there is concern that Japan might expand the restrictions to include other key semiconductor materials, such as wafers, or materials and components used in other products, including rechargeable batteries for electric vehicles.

In January to May, 94 percent of South Korea’s imports of fluorinated polyimide and 92 percent of its imports of photoresist were from Japan, according to a report by Moody’s Investors Service, which cited trade data from South Korea.

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