South Korea urges Japan to scrap export curbs, pledges help to firms

Lloyd Doyle
July 11, 2019

"(Minister Kang) expressed concern that Japan's trade restrictions would not only inflict damage to our companies, but could also disrupt global supply chains and cause negative effects not only to USA companies but also to the global trade order", the ministry said in a press release.

While the South Korean government refutes Japan's claims that the materials could end up in North Korea, Japanese government officials continued to raise the issue. Analysts say that given a slowdown in demand for smartphones and for semiconductors overall, South Korean chipmakers Samsung Electronics and SK Hynix both have sufficient supplies of the materials for now.

Also caught in the fray are Japanese chemical suppliers such as JSR Corp. and Stella Chemifa Corp., which are exploring ways to supply South Korean clients from plants outside Japan.

Japanese Prime Minister Shinzo Abe and his aides have hinted that there might have been illegal transfers of sensitive materials from South Korea to North Korea.

South Korea has admitted to 156 incidents of illegally exporting strategic materials, some of which could be used to produce chemical weapons, in a report from the country's own trade ministry.

The latest dispute stems from a South Korean court ruling past year that ordered Nippon Steel compensate former forced laborers. Japan insists all compensation issues were settled when the two countries normalized relations under the 1965 treaty. South Korea's trade minister on Tuesday said an inspection of companies that process and export the chemicals imported from Japan found no sign of illegal transactions allowing them to reach North Korea or any other country affected by United Nations sanctions.

UNANSWERED QUESTIONS: Japanese officials have not specified which companies they suspect of having mismanaged exports of sensitive materials.

In response, the South Korean government argued most of the cases were carried out by small companies that did not know the goods were categorized as strategic or subject to export controls.

"I think it could be a move to show that (Japanese government) will take a stronger position on hard bilateral issues regarding damages to Japanese companies", Korea National Diplomatic Academy professor Choi Eun-mi said.

But there's concern that Japan might expand the restrictions to include other sectors.

The ministry said Pompeo expressed an "understanding" of South Korea's position and agreed to help facilitate communication through diplomatic channels among Washington, Seoul and Tokyo. It was unclear if any cases involved Japanese imports or were the main reason for Japan's decision to impose stricter controls on exports to South Korea. Thousands of South Koreans have signed petitions posted on the presidential office's website that call for boycotting Japanese products and travel to Japan.

Associated Press writer Elaine Kurtenbach in Bangkok contributed.

Other reports by Iphone Fresh

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