A disappointing meeting

The meeting President Moon Jae-in had at the Blue House Wednesday with leaders of Korea’s 30 largest business groups was supposed to be a chance for him to hear their troubles after Japan’s restrictions of three key industrial materials. But the meeting was disappointing in many ways. Moon underscored the importance of communication between the government and the corporate sector to prepare for the possibility of Tokyo taking additional retaliatory steps as the conflict continues. He also vowed to bolster government support for diversification of import sources and localization of parts and technologies needed to produce semiconductors, displays and other items.

No one can find fault with the government’s effort to respond, albeit belatedly, to Japan’s trade offensive and ease our companies’ deepening concerns. Yet the way the president sent his message rings alarms as it gives the impression that the government mobilized corporate leaders to establish a joint front to deal with Japan’s economic retaliation. Business leaders are worried about the retaliation’s impact on their enterprises. Can such a demonstration of resolve help them? It would have been better for the government to find appropriate countermeasures by quietly listening to their complaints.

The government needs to find effective ways to counter the restrictions. Instead, Moon offered boilerplate answers to corporate leaders, such as stressing the need to diversify import sources and localize parts. The business leaders must have been dissatisfied with such answers given their urgent need to maintain their suppliers of essential materials.

As Moon said, it is necessary to reinforce the competitiveness of our materials, parts and equipment industry through companies’ own efforts and the government’s support. In a global supply chain, however, one country cannot excel in everything. The government has the responsibility to protect local companies from external risks. Actually, it all began with the government’s vow to not intervene in the Supreme Court’s rulings ordering compensation from Japanese companies to Koreans forced to work during World War II. The sooner the government finds a diplomatic solution, the better.

The government must listen to corporate leaders’ complaints that excessive financial and environmental regulations hamper them from localizing parts and materials. For instance, they cited strict regulations on hydrogen fluoride — one of the three materials Tokyo banned from being exported to Korea — after a fatal industrial accident in Gumi, North Gyeongsang. One businessman grumbled about financial restrictions on mergers and acquisition in our parts and materials industry. Moon must pay heed.

JoongAng Ilbo, July 11, Page 30