Gov’t scrambles over Japan’s restrictions

Home > Business > Economy

print dictionary print

Gov’t scrambles over Japan’s restrictions


Finance Minister Hong Nam-ki, fourth from left, explains the government’s economic policy for the second half of the year in a meeting Thursday at the Korea Chamber of Commerce in central Seoul. Hong talked about next year’s minimum wage and the implementation of the 52-hour workweek, both of which will affect small- and medium-sized businesses. [YONHAP]

Finance Minister Hong Nam-ki warned of tit-for-tat actions if Japan does not end restrictions on exports of key materials needed by Korean semiconductor and display producers.

“While [Japan] argues that [the actions it has taken] are because trust [between the two countries] has been broken, it is clearly an economic retaliation against judicial decision,” the finance minister said during an appearance on a radio show on Thursday.

“[Such] retaliatory actions have to be withdrawn as they violate international law,” Hong said. “If the restriction continues, they will not only cause damage to the Korean economy but also to Japan as well.”

While Hong said the Korean government is currently working on a complaint to be filed with the World Trade Organization (WTO), he warned that wasn’t Korea’s only option.

“This can’t be the only choice as it takes a long time before the WTO reaches a conclusion,” Hong said. “We plan to take [other] firm measures including looking into [breaches of] other international laws and [even] domestic laws.”

In the meantime, Hong said the Korean government will actively encourage local production of such key components and equipment that are normally imported.

On Wednesday the Blue House, the government and the ruling Democratic Party agreed to fund 1 trillion won ($855 million) annually for the local development of key materials, parts and equipment related to semiconductors.

Japan’s export restrictions were announced on Monday and went into effect Thursday.

Three materials are restricted: fluorinated polyimide, needed for smartphone displays, which Japan holds a monopoly on global production of; hydrogen fluoride, used to remove unnecessary chemical substances during semiconductor production; and photoresists, a light-sensitive polymer used in semiconductor production, which Korea mostly imports from Japan.

Japan is considering removing Korea from a so-called “white list” of 27 national security allies. Nations on the list face minimal restrictions for the export license applications. Korea has been on the list since 2004. With the new restrictions, exports of key materials will require time-consuming procedures and case-by-case government permits. The process could take at least 90 days, and could amount to an essential embargo.

The action is considered retaliation by the Shinzo Abe administration for the Korean Supreme Court’s landmark rulings last year ordering Japanese companies to compensate Korean wartime forced laborers.

Korean Trade Minister Yoo Myung-hee called on Japan to withdraw its restrictions in a meeting with institutions including the Korea Trade-Investment Promotion Agency, Korea International Trade Association, Korea Semiconductor Industry Association and the Korea Display Industry Association.

“The recent action taken by Japan violates the basic guideline of the Wassenaar Arrangement as it targets specifically Korea and limits exchanges between private companies of both countries,” Yoo said.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)