SEOUL – In what was seen as a countermeasure to Tokyo’s recent decision to downgrade Seoul’s trade status amid a diplomatic row, South Korea’s Trade Ministry said Monday that around September Japan will be removed from a list of countries entitled to preferential treatment in trade.
The Ministry of Trade, Industry and Energy said Japan will be placed in a newly established third category in which, in addition to narrowed conditions for applying comprehensive licenses for strategic goods, the approval process will be extended to between five and 15 days, with procedures being tightened.
The exclusion measures are to be implemented after a 20-day public comment period, it said.
“It is difficult to work closely with countries that use systems that deviate from the basic principles of the international export control system or continue inappropriate cases,” Industry Minister Sung Yun-mo told a news conference, indicating that Tokyo’s recent trade restrictions against Seoul were behind the removal.
It was not immediately clear how South Korea’s tightened export controls will impact bilateral trade. Seoul said South Korean companies exporting to Japan will be able to receive exceptions from case-by-case inspections that are normally applied to exports to nations with lower trade status and go through a faster approval process they currently enjoy.
Sung and other South Korean officials did not specify what they see as Japan’s problems in export controls. They say that Seoul will work to minimize negative impact on South Korean exporters and bilateral trade.
Sung said Seoul is willing to accept any request by Tokyo for consultation over the issue during the opinion-gathering period.
On Monday, Masahisa Sato, state minister for foreign affairs, tweeted that if Seoul made the decision as a countermeasure to Japan’s tightening of export controls on high-tech materials to South Korea, it will be in violation of World Trade Organization rules.
“We will not overreact,” a senior official at the Japanese Foreign Ministry said, adding that he will monitor reaction in South Korea ahead of Thursday’s Liberation Day, which commemorates the end of Japanese colonial rule in 1945, before considering how Tokyo might respond to Seoul’s decision.
South Korea’s announcement came weeks after President Shinzo Abe’s Cabinet approved the removal of South Korea from a list of countries with preferential trade status. Seoul vowed retaliation while accusing Tokyo of weaponizing trade to retaliate over political rows stemming from their wartime history.
Japan’s move came weeks after it imposed stricter controls on certain technology exports to South Korean companies that rely on Japanese materials to produce semiconductors and displays for TVs and smartphones, which are key South Korean export items.
Meanwhile, South Korean President Moon Jae-in on Monday again criticized Japan over its tightened export controls, calling them an “unfair economic retaliation,” while also urging a cool-headed response.
Moon, in a meeting with top government officials held three days ahead of Liberation Day, said the stricter controls are not only unfair but also very serious as they stem from disputes over wartime history.
“Our measures, however, should not be emotional,” Moon said, adding that the issue should be looked at with a long-term view.