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DECEMBER 2020

Japan And South Korea Clash In Local Variant Of US-Chinese Economic War

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Japan And South Korea Clash In Local Variant Of US-Chinese Economic War

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On July 15th, South Korean President Moon Jai-in warned that Japan’s tightened economic pressure against Seoul could harm Tokyo more.

He said that Japan’s strengthened export controls of photoresists and other sensitive materials mainly to manufacture semiconductors and display screens could hurt its export-dependent economy and disrupt global supply chains.

“Japan’s export restrictions have broken the framework of economic cooperation between South Korea and Japan that had continued over a half-century based on mutual dependence,” Moon said.

“The shattered credibility of cooperation with Japan in the manufacturing industry will inspire our companies to break out of their dependence on Japanese materials, components and equipment and work toward diversifying import sources or localizing the technologies. I warn that, eventually, it will be the Japanese economy that will be damaged more.”

Approximately a week earlier, Japan tightened restrictions on the export of three materials used in high-tech equipment, citing “inadequate management” of sensitive items exported to South Korea.

The curbs were seen as a response to a South Korean court ruling last year ordering a Japanese company to compensate South Koreans who were forced into labor during World War II.

Japanese officials have cited “inadequate management” of sensitive items exported to South Korea as a reason behind the curbs, as well as lack of information sharing on export controls.

Reportedly, Japan’s NHK and FNN broadcasters reported that hydrogen fluoride, one of the three materials covered by the curbs that can also be used in chemical weapons, had been shipped to North Korea after being exported to the South.

South Korea responded that the accusations were groundless and called for a UN investigation into the matter.

Kim You-geun, deputy chief of South Korea’s presidential National Security Office, said South Korea has been thoroughly implementing U.N. sanctions against North Korea over its nuclear weapons program. He demanded that Japan provide evidence for claims made by Prime Minister Shinzo Abe and his conservative aides that there may have been illegal transfers of sensitive materials from South Korea to North Korea.

Kim said the Seoul government proposes Japan accept an inquiry by the U.N. or another international body over the export controls of both countries to end “needless arguments” and to clearly prove whether the Japanese claims are true or not.

“If the result of the investigation reveals that our government did something wrong, our government will apologize for it and immediately apply measures to correct it,” said Kim, reading a prepared statement on live TV.

“We will continue boycotting the consumption and distribution of Japanese products until Japan’s government and the Abe administration apologizes and withdraws its economic retaliation,” Kim said, referring to Prime Minister Shinzo Abe.

“If the result shows that our government has done nothing wrong, the Japanese government should not only apologize but also immediately withdraw the exports restrictions that have the characteristics of a (political) retaliation. There also should be a thorough investigation on (any) Japanese violation,” he said.

On June 9th, South Korea’s trade minister said an “emergency inspection” of companies that process and export the chemicals imported from Japan found no sign of illegal transactions allowing them to reach North Korea or any other country affected by United Nations sanctions.

On July 12th, Japanese and South Korean officials sat down in Tokyo to discuss the tightening of the sanctions, but there appears to be little result.

Following the meetings, Lee Ho-hyeon, a South Korean trade ministry official, gave a briefing. He said that apanese officials cited inadequate bilateral discussions as a reason why they tightened controls on high-tech exports to South Korea, but they didn’t clearly say whether Tokyo believes Seoul may have illegally transferred sensitive materials to North Korea.

Following the South Korean announcement, a Japanese trade official was cited as saying that the sanctions were prompted by a review of trade policy and were not related to WW2 reparations.

These developments are at least partly a direct result of the Trump Administration’s policy towards its economic partners. The recent US actions against the EU bloc in terms of trade, as well as more specifically towards China have created the necessity for the Washington-led establishment to take steps in filling the gaps created by the antagonistic policy that Washington has been applying.

At the same time, the history between Seoul and Tokyo has been completely disregarded, and Washington appears to have overestimated its ability to “push its allies into line.” Forcing both its allies in a falsely established alliance is causing ripples that, with time, would get only stronger. In a sense, Washington’s trade policy, and otherwise, have opened a sort of “Pandora’s Box,” especially in Southeastern Asia.

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