Published: Mon, July 01, 2019
Global News | By Blake Casey

SKorea summons Japanese envoy over export curbs

SKorea summons Japanese envoy over export curbs

Japan holds a majority share in the global market of these three items, and it controls their exports based on the Foreign Exchange and Foreign Trade Control Law because they are also used for military supplies.

The news comes after Tokyo announced its plans to remove South Korea from a list of so-called "white nations", like the USA and European countries that have minimum restrictions on trade.

The materials to be restricted are fluorinated polyimide, which is used in smartphone displays, and resist and high-purity hydrogen fluoride (HF), which is used as an etching gas in the making of semiconductors, the paper said.

The three materials are fluorine polyimide as a liquid crystal display component for use in TVs and smartphones and resist and etching gas necessary for manufacturing of semiconductors.

Tighter export controls, to become effective on Thursday, would slow the export process by several months, hitting South Korean tech giants, such as Samsung Electronics, SK Hynix and LG Display.

Japan and South Korea are both democracies, market economies and U.S. allies, but their relationship has been strained for decades as a result of Tokyo's brutal 1910-45 colonial rule over the Korean peninsula.

This comes as Seoul's Supreme Court previous year ordered Japanese companies, Nippon Steel & Sumitomo Metal Corporation and Mitsubishi Heavy Industries to compensate South Korean victims of forced labor during its colonization under Japan.

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"We're talking about equipment where there's no great national security problem with it", the U.S. He said a ban wasn't fair to United States suppliers, who were upset by the move.

Japan, which maintains that the issue of forced labour was fully settled in 1965 when the two countries restored diplomatic ties, has denounced the ruling and called for the launch of an arbitration panel.

"The Korean government has worked together with the related industry players in order to diversify imports, expand domestic production of the materials and develop Korea's original products", the Korean trade minister said. They could also cite the damage incurred from the restrictions as a bargaining chip to later lower prices from Japanese partners, it added.

Japan argues that package should have permanently resolved the issue.

Outbound shipments came to $44.18 billion for June, down from the $51 billion tallied a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

The trade tensions developing between the Asian neighbors seem to undermine the message of free and open trade that leaders endorsed at the Group of 20 summit in Osaka last week.

But relations have soured since South Korea's Supreme Court ordered the seizure of local assets of a Japanese company after it refused to compensate forced laborers during World War II.

It said there have been cases of inappropriate implementation of export control measures in the past for items shipped to South Korea, but did not elaborate.

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