Trade Ministry reaffirms export control system

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Trade Ministry reaffirms export control system

As Seoul braces for more export restrictions from Tokyo, the government urged Japan again to return to talks.

The Ministry of Trade, Industry and Energy argued Friday against Tokyo’s questioning of Korea’s export control system, and proposed discussions to resolve any “misunderstanding.”

“The Japanese government has said that Korea’s export control system is inadequate, citing the size of its workforce and its scope,” said Lee Ho-hyeon, director general for international trade policy, during a press briefing at the Central Government Complex in Seoul.

“These [claims] are contrary to the truth and are based on a misunderstanding of Korea’s system,” said Lee. “An honest discussion about Korea’s export controls and operations, which serve as the grounds for Japan’s export restriction measures, is needed.”

Lee said that Korea’s export control system is managed by professional agencies including the Nuclear Safety and Security Commission and that it is similar in size to the system employed by Japan.

He also addressed Japan’s claims of erosion of trust as they related to regular talks about export controls between the two countries, which have not been held in the past three years. Lee said the two countries had agreed late last year to hold the talks this year.

The urgency expressed by the trade official comes as Tokyo is expected to remove Seoul from a list of countries receiving preferential trade status early next month.

If taken off the list, more restrictions would go on Japanese exports to Korea beyond the three industrial materials - hydrogen fluoride, fluorinated polyimide and photoresists - that Tokyo started restricting July 4.

Korea has called for a senior-level meeting before July 24, when Tokyo will conclude discussions on whether to remove Korea from the list.

Japan has so far not responded.

Lee expressed Seoul’s frustration at Tokyo, particularly for the changes in reasons for the trade restrictions.

“At first, [Japan] mentioned the court decision on [wartime] forced labor and, afterward, concerns about export controls,” said Lee. “Ultimately, we understand that [Japan] is concentrating on two issues: the export control system and a problem of trust as bilateral talks [on trade] have not continued.”

With no sign of immediate resolution, the government announced plans to accelerate domestic production of key industrial materials restricted by Japan.

The Ministry of Economy and Finance said Friday that the government will temporarily ease the requirement for government approval for local companies to produce industrial materials.

“While maintaining the intentions and principles of existing laws and policies, the government has decided to provide temporary measures under certain conditions for companies that face difficulties,” said the Finance Ministry in a statement.

“We are planning to reduce the time it takes for approval in chemical materials in areas such as research and development,” said the ministry, adding that it would also allow extended working hours for companies conducting tests to localize production of such materials.

The announcement was made after top government officials, including Finance Minister Hong Nam-ki, met for the second time this week to discuss the fallout from Japan’s export measures.

The ministers agreed to prepare additional measures to reduce reliance on materials imported from Japan.

The government explained that it would try to secure as much support for the materials industry in the supplementary budget, which is currently stuck in the National Assembly.

It added that it would work to expand tax exemptions for research and development in technology for the production of core materials such as hydrogen fluoride.

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