Business

Japan asks South Korea to explain decision to revoke top-tier trade partner status

Kyodo

In the latest escalation in the feud between the Asian neighbors, the Japanese industry ministry on Tuesday questioned the rationale behind South Korea’s decision in mid-August to remove Japan from a list of its preferred trading partners.

The Ministry of Economy, Trade and Industry submitted its opinion to South Korea regarding the decision announced on Aug. 12 to end Japan’s preferential trade status, apparently in direct response to Tokyo’s earlier revocation of Seoul’s trusted trade status.

The ministry sent its opinion and sought clarification for reasons behind the plan to tighten trade controls as the South Korean government is currently accepting public comments on the matter.

If South Korea goes ahead with the removal of Japan from the list of top-tier trade partners “without answering questions on its rationales and details, the revision would be assumed as arbitrary and illegitimate countermeasures to Japan,” the ministry said in a statement.

In addition to more restrictive conditions on applying for comprehensive licenses for exporting strategic goods to Japan, the export approval process will also be extended to between five and 15 days.

Seoul’s decision came after Japan decided to remove South Korea from its whitelist of preferred trade partners that enjoy minimum trade restrictions on goods such as electronic components that can be diverted for military use.

Japan had already implemented in July tighter controls on exports of some materials needed by South Korean manufacturers of semiconductors and display panels, including Samsung Electronics Co. and SK Hynix Inc.

The move was widely seen as retaliation for South Korean court decisions last year ordering compensation to be paid to people who said they have been forced to work in Japanese factories during Japan’s colonial rule of the Korean Peninsula from 1910 to 1945.

Japan maintains that the issue of compensation was settled “finally and completely” by a 1965 bilateral agreement.

Japan has said its tighter export rules were adopted after discovering “inappropriate” cases of export controls related to South Korea.

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