Business

South Korea to unveil plans to ease reliance on Japanese industries

Reuters

South Korea will soon unveil plans to reduce its economy’s reliance on Japanese industries, its finance minister said Wednesday, while repeating his call for Tokyo to end the tightening of controls on some exports.

“The government is working on comprehensive plans to reduce the country’s dependence on Japan’s materials, components and equipment industries and will announce them soon,” Finance Minister Hong Nam-ki said at the start of a regular meeting of economy-related ministers.

He added that South Korea wanted to make its supply chain more independent.

Simmering tension, particularly over a case for compensation of South Koreans forced to work for Japanese companies during World War II, took a sharp turn for the worse this month, when Japan tightened the procedure for exports of high-tech materials to South Korea.

Japan has denied that the dispute over compensation for laborers is behind the tightened controls, even though one of its ministers cited broken trust with South Korea over the labor dispute in announcing the restrictions.

On Wednesday a Japanese government spokesman urged Seoul to take “appropriate steps” to resolve the labor issue, which was reignited by a South Korean court ruling late last year that ordered Japanese companies to pay compensation.

The export measures Japan imposed in its dispute with South Korea will adversely affect global technology companies and hurt the operations of tech giant Samsung in Austin, Texas, a South Korean government source said Wednesday.

Japan’s steps are inconsistent with World Trade Organization principles, but South Korea wants to resolve the dispute through dialogue, the source told reporters in Seoul, speaking on the condition of anonymity in order to discuss the negotiations.

If Japan goes so far as to drop South Korea from its “white list” of countries that enjoy minimum trade restrictions, it would cause a “tremendous amount of problems,” the source added.

Meanwhile, Washington “will do what it can do” to help defuse a political and economic dispute between its allies South Korea and Japan, the top U.S. diplomat responsible for Asia policy said during a visit to Seoul on Wednesday.

David Stilwell, U.S. assistant secretary of state for Asian and Pacific affairs, said that he took the situation seriously but did not elaborate on what steps Washington might be willing to take and said fundamentally it was up to South Korea and Japan to resolve their differences.

“We hope that resolution will happen soon,” he said. “The United States, as a close friend and ally to both, will do what it can do to support their efforts to resolve it.”

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