Retaliation backfires

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Retaliation backfires

The Japanese government resorting to retaliate against the Korean court rulings on wartime forced labor by regulating exports of three materials essentials for chip-making and organic light-emitting diode display production is mean and childish. Japan’s Ministry of Economy, Trade and Industry revised export control regulations and removed Korea from a list of countries eligible for simplified and fast-track clearance for three items — fluorinated polyimide, used to make OLED displays; photoresists, used for semiconductor fabrication; and hydrogen fluoride (etching gas), which is needed to clean chemical substances in chipmaking.

As a result, the new regulation requires Japanese vendors to seek approval every time they want to ship these materials to Korea. The review process could take up to 90 days, which could seriously disturb Korean chip and display production that makes up the mainstay of Korean exports.

Tokyo has more or less declared a war by targeting the core of Korean exports and industrial production as it is well aware of the weight of semiconductors and displays in Korean economy. The foundation of bilateral relationship could be shaken. Prime Minister Shinzo Abe called for “sustainability and development of a free, fair and non-discriminative trade order” in his closing address to the Group of 20 summit in Osaka, Japan on Saturday. Then, he ordered a contradictory retaliatory action on its trade partner in just two days.

Abe claimed that the measure was based on changes in trust between states and that it does not violate the rules of the World Trade Organization (WTO). The non-violation claim under the WTO article allows member countries to file complaints against another member even when they do not violate the rules technically. Seoul must take the issue to the WTO without any hesitance. Japan acts as if it practices fairly according to global standards. But Seoul has proven Tokyo wrong by winning the WTO’s backing for its restrictions on fisheries import from seas near Fukushima.

The de facto embargo is ruinous for Japan, too. In a recent editorial, the Nikkei warned that the trade move to settle the wartime labor row can cause damages to Japanese companies and disrupt the supply chain between the two countries. The action not only hurts Korean companies, but also Japanese companies as Korean manufacturers are their major clients.

Japan must reverse the restrictions immediately to prevent harm for both nations. A tit-for-tat attack could worsen bilateral relationship beyond repair. The Tokyo Summer Olympics are coming up next year. It must withdraw the retaliatory actions and work with Korea to solve the wartime labor issue through diplomatic means.

JoongAng Ilbo, July 3, Page 30
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