ZCZC
BCN-12
SKOREA-JAPAN-TRADE-TECHNOLOGY
South Korea warns of ‘prolonged’ export row with Japan
SEOUL, July 11, 2019 (BSS/AFP) – South Korean President Moon Jae-in told
top business leaders Wednesday that Japan’s restrictions on exports of
chemicals crucial to the country’s tech sector had caused an “unprecedented
emergency” and warned of a drawn-out trade dispute.
Tokyo last week said it would stop the expedited shipment of compounds
used by major firms including Samsung Electronics and SK Hynix in the
manufacture of microchips and smartphones, increasing long-simmering tensions
over the use of forced labour during World War Two.
With the two firms accounting for almost two-thirds of global chip
production, the issue is raising concerns about the impact on supply chains
across the planet.
Moon on Wednesday met executives from Samsung Electronics and SK Group as
well as Hyundai Motor Co. and Lotte Group to discuss the crisis, telling them
last week’s decision by Tokyo was intended to damage South Korea’s economy.
Our “government is doing its best to solve the matter diplomatically. I
hope the Japanese government will reciprocate”, he said at the presidential
office in Seoul, adding: “We cannot rule out the situation will be
prolonged.”
A “joint government-private sector response system is required as we are
in an unprecedented emergency”.
South Korea’s prime minister said the government would also ask parliament
to release more than 120 billion won ($101 million) in extra budgetary funds
to help cope with the impact of the restrictions, according to Yonhap news
agency.
South Korea has said the measures violate international law and has
threatened to raise the issue at the World Trade Organization.
It is the latest development in a spat over South Korean court rulings
requiring Japanese firms to compensate victims of a wartime forced labour
policy.
The row comes with global tech companies already under pressure from a
weakening global outlook, while the chip sector is particularly under
pressure from weak demand.
Moon said dependence on overseas markets for the crucial materials Tokyo
has cut off must be reduced in the long term.
Despite Seoul’s appeals for negotiations, Japan has refused to budge.
Tokyo’s deputy chief cabinet secretary Yasutoshi Nishimura told a regular
news conference Wednesday that the new restrictions were “necessary to manage
the export control system appropriately for security purposes”.
Seoul has dismissed reports in Japanese media that say the South
transferred some of the imported Japanese materials to North Korea.
South Korea has said it is arranging a meeting with Japanese officials in
Tokyo on Friday to discuss the issue.
BSS/AFP/HR/1055