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South Korea removes Japan from trusted trade list in retaliatory move

By Thomas Maresca
South Korea removes Japan from trusted trade list in retaliatory move
South Korean Trade Minister Sung Yun-mo announced a new export list at a press conference in Sejong on Monday that removes Japan as a trusted trade partner for preferential export treatment. Photo by Yonhap

SEOUL, Aug. 12 (UPI) -- South Korea announced Monday that it would be removing Japan from its top tier of preferred trading partners, a retaliatory move in an ongoing trade and diplomatic dispute that has soured relations between the neighboring countries.

South Korea's Ministry of Trade, Industry and Energy said that it would be amending its list of trade partner categories from two tiers to three and adding Japan to the new category.

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Japan had been in a group of 29 preferred export partners, a list whose members are parties to the four major multilateral export control regimes: the Wassenaar Arrangement, the Nuclear Suppliers Group, the Australia Group and the Missile Technology Control Regime.

The newly created bracket is for countries that are parties to the export control regimes but have "improper operating practices," Trade Minister Sung Yun-mo said at a press briefing at the ministry headquarters in Sejong.

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"Close international cooperation is required to operate the export control system," he added.

Sung said that the change will be implemented in September after a 20-day period for comment gathering and regulatory and legislative review. Japan would be able to ask for a consultation during the review period, the minister said.

Under the revamped regulations, Korean suppliers shipping strategic materials to Japan will have to submit five documents for approval, up from the current three. The approval process will now take longer as well, lasting up to 15 days from the current five.

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The move comes on the heels of Japan's decision on Aug. 2 to remove South Korea from its own white list of preferred trading partners, an action that is slated to go into effect later this month. That move could require an approval process of up to 90 days for a list of over 1,000 items deemed sensitive.

Japan had already slapped export restrictions on three key materials used in South Korea's high-tech manufacturing industry the previous month, setting relations between the neighboring countries on edge.

Tokyo has said the tightened controls were implemented for security reasons, but Seoul claims they are retaliation for a Supreme Court decision last year that stated Japanese companies must provide compensation to their victims of wartime forced labor.

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Japan has long argued that all such reparations claims were resolved with the 1965 agreement that normalized bilateral relations.

In South Korea, the trade flap has triggered a large-scale consumer boycott of Japanese products, which has targeted everything from Asahi beer to Uniqlo clothing to travel to Japan.

South Korean President Moon Jae-in has spoken out forcefully against Japan's moves, calling the export restrictions "a selfish, destructive act that will cripple the global supply chain and wreak havoc on the global economy."

On Monday, however, he struck a more measured tone, saying that responses to Japan "should not be emotional" and calling for maintaining the "friendly relations between the two peoples."

In a meeting with senior aides, Moon said that responses to Japan's economic moves should be "cool-headed and in a long-term manner."

"If the people of both countries communicate with the values of democracy and human rights and build friendship with humanity and peace, the future of Korea-Japan relations will be brighter," he said.

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