After weeks of being on the high gear, the South Korea-Japan trade war may be taking a break for now. Japan has reportedly decided to stop adding to its lists of controlled materials they shipped to Korea. Government officials from Japan gave the announcement this Wednesday giving Korean manufacturers a sigh of relief.
“Japan appears to be slowing down on imposing additional export restrictions,” said Institute for International Trade at the Korea International Trade Association’s senior researcher, Mun Byung-ki, during a press conference.
However, according to trade analysts, Japan’s restraint from adding to its list of trade restrictions on South Korea is not a sign that the trade war is about to end. The reason for this is that Japan has emphasized its intention to continue retaliating against Korea until their demands are met. One such demand is for South Korea to accept the 1965 settle it received for Japan’s World War II war crimes against the Korean citizens.
The Minister of Economy, Trade, and Industry of Japan said that they had updated their trade control law and enforcement rule. He, however, failed to detail which materials Japan will further restrict. If added to this list, a material will be required to undergo inspection per transaction. Fortunately for South Korea, the absence of a definite list means that the restriction is yet to apply beyond the first three mentioned materials.
Senior researcher, Mun Byung-ki, also stated that if Japan were to release a comprehensive list of materials to be restricted, they would likewise suffer from such policy.
“If Japan specifies items, it means a direct confrontation between the two countries, which is also a burden for Japan too, given concerns over economic impact are growing within and outside of Japan,” he said.
South Korea has been under pressure after Japan imposed restrictions over the export of photoresist, hydrogen fluoride and fluorinated polyimide to the former. These materials are crucial in the production of highly advanced technologies such as chips, computers, and other gadgets. The embargo on these materials has deeply affected some of South Korea’s largest companies, such as Samsung, Hyundai, LG, and more.
Japan followed up the embargo last Friday (August 2, 2019) by removing South Korea from their trade “whitelist.” The “whitelist” is a list of countries Japan provides streamlined export procedures. South Korea is the only country in Asia to be part of this 27-member list. After August 2, it will also be the only country to have been removed from this list.