Japan to remove South Korea from favoured trade list

Tokyo's move follows its decision last month to restrict exports of chemicals key to South Korea's chip industry.

    Protests in Seoul have been a symbol of anti-Japan feelings in South Korea, which was occupied by Japan from 1910-1945. On Friday, Japan said it would remove South Korea from a list of approved export destinations as the dispute worsens [Kim Hong-Ji/Reuters]
    Protests in Seoul have been a symbol of anti-Japan feelings in South Korea, which was occupied by Japan from 1910-1945. On Friday, Japan said it would remove South Korea from a list of approved export destinations as the dispute worsens [Kim Hong-Ji/Reuters]

    Japan's cabinet on Friday approved a plan to remove South Korea from a list of countries that enjoy minimum export controls, a move likely to escalate tensions fuelled by a dispute over compensation for wartime forced labourers.

    The decision to drop South Korea from the "white list," a step that has been protested fiercely by Seoul, comes a month after Japan tightened curbs on exports to South Korea of three hi-tech materials needed to make memory chips and display panels.

    South Korean President Moon Jae-in vowed to take stern action against Japan's decision to strip his country of its fast track export status, calling it a reckless and unfair retaliatory action by Tokyo.

    "We won't be defeated by Japan again," Moon told a cabinet meeting in a rare live broadcast, but without giving details of possible countermeasures.

    He also criticised Japan as a "selfish nuisance" for disrupting the global supply chain. 

    Japan's decision was approved by the cabinet and would take effect from August 28, Industry Minister Hiroshige Seko told a briefing. He said the trade control was not a countermeasure and was done from the standpoint of Japan's national security.

    Meanwhile, Japan's Foreign Minister Taro Kono said its review of the country's export-control regime, which led to the decision to exclude South Korea, is "fully compatible" with the global free trade regime.

    Japan has previously cited what it says is South Korea's insufficient export controls as the main impetus for the move. But Tokyo has also highlighted what it says is an erosion of trust after South Korean court rulings ordered Japanese firms to compensate wartime forced labourers.

    Japan says that issue of compensation was settled by a 1965 treaty that normalised ties between Tokyo and Seoul.

    South Korea would be the first country to be removed from Japan's white list, which currently has 27 countries including Germany, Britain and the United States.

    The measure could require exporters to take extra administrative procedures to obtain export licenses, potentially slowing down exports of a wide range of goods that could be used to produce weapons.

    South Korean officials have warned they may reconsider an intelligence-sharing accord with Japan if the feud worsens.

    The US has urged its two key Asian allies to consider reaching a "standstill agreement" to buy more time for talks, a senior US administration official told reporters in Washington on Tuesday.

    US Secretary of State Mike Pompeo said on Thursday he hoped the two would find a solution by themselves, stressing cooperation on North Korea was "incredibly important".

    Seko said Japan had briefed the US administration on its plans to remove South Korea from the list, and added that the move was not intended to hurt bilateral relations with South Korea.

    SOURCE: Reuters news agency