SEOUL, Jul. 21 (Korea Bizwire) — South Korea will step up its efforts this week to fend off a move by Japan to impose additional trade restrictions against Seoul, according to government officials on Sunday, amid a growing trade dispute that could also disrupt global supplies of semiconductors and smartphones.
Diplomatic and economic tensions are escalating between the neighbors after Tokyo recently tightened controls on exports of key high-tech materials crucial for the production of semiconductors and displays to Seoul, in apparent retaliation for a series of South Korean court rulings last year over Japan’s wartime forced labor.
Japan has also threatened to remove South Korea from a “whitelist” of trusted importers, with its decision expected this week.
If South Korea is removed from the list of streamlined and preferential exports procedures, it would have major impact on global supply chains.
Before Japan makes the decision, South Korea’s trade ministry will send its documents to Tokyo on Monday or Tuesday containing further calls for Japan to withdraw the trade restrictions, a ministry official said.
Last week, South Korean Finance Minister Hong Nam-ki told lawmakers that the government is bracing for Japan’s plan to remove Seoul from the list.
Hong said the government is working on how to deal with a possible delisting, which could affect about 1,000 items.
The delisting would require Japanese companies to apply for an individual license to export items to South Korea, a move that could disrupt the supply of such materials.
The ministry has asked Japan to hold director-level talks by Wednesday to help resolve the trade dispute, but Tokyo has kept mum on the request.
South Korea plans to raise the issue at a meeting of the World Trade Organization in Geneva later this week.
At a meeting with political leaders last week, President Moon Jae-in made it clear that Japan’s move to remove South Korea from the list is jeopardizing not only Seoul-Tokyo ties but also security cooperation in Northeast Asia.
Tokyo is expected to announce a decision of whether to take Seoul off the whitelist on July 31 or Aug. 1, Chung Eui-yong, director of national security at Cheong Wa Dae, was quoted as telling the party officials.
Responding to a call for reconsidering the extension of the military information-sharing pact with Japan, Chung said the government may do so, depending on the future situation.
Chung added, however, that Seoul’s current position is to maintain the bilateral General Security of Military Information Agreement (GSOMIA).