Moon: Trade dispute with Japan helps no one

South Korean President Moon Jae-in has warned Japan not to play “a game where nobody wins and everyone, including Japan, becomes victims” over the recently-imposed trade curbs against South Korea.

Japan imposed strict controls on three key materials for South Korea’s semiconductor industry. The rules also downgrade South Korea’s trade status.

“Japan is the country that has benefitted the most from the orders of free trade, and it is the country that has been actively supporting free trade when the country finds the need, so Japan’s measures this time are very antinomic.

“I am unsure what benefits Japan gains over its unilateral measures. Even if there were benefits to Japan, they would only be temporary. In the end, it is a game where nobody wins and everyone, including Japan, becomes victims,” Moon said.

In a meeting with economic advisers on Thursday, Moon repeated some of his previous stances, saying that Japan’s trade curbs are in retaliation for South Korean court rulings over wartime forced labour, something Tokyo has denied.

Moon pointed to Japan’s shifting explanations for the curbs and its downgrading of South Korea’s export status, saying this raised suspicions. 

“Japan initially cited our Supreme Court’s ruling over wartime forced labour as the reason [for the curbs] but it later changed its words by citing South Korea’s insufficient export management for strategic materials. Because of that, I come to question what the real intention of Japan is,” he said.

Japan colonised the Korean Peninsula from 1910 to 1945 and insists all compensation issues were settled under a 1965 agreement normalising ties. 

Japan says South Korea violated international law by moving to force Japanese companies to compensate beyond the 1965 agreement, under which Japan already provided $500m in grants and loans.

Anger in South Korea

Moon’s comments came as Japan granted the first permit for a South Korea-bound shipment of chemicals for use in hi-tech materials under Tokyo’s new export requirement.

Japanese Trade Minister Hiroshige Seko made a rare announcement regarding the approval on Thursday, saying that officials determined the transaction raised no security concerns.

The move is apparently meant to calm South Korean anger over Tokyo’s export curbs and reaffirm that there is no trade ban in place after South Korea described Japan’s recent curbs as an “embargo” on shipments.

It followed “strict examination”, Japanese ministers said, cautioning that Tokyo could consider expanding its controls beyond the three hi-tech materials.

“If improper use of exports are found beyond three hi-tech materials, we will implement thorough steps to prevent recurrence including expanding application examination,” Seko said. 

Anger over the tightened export controls has prompted a widespread boycott of Japanese products and services in South Korea.

Many supermarkets and convenience stores have reportedly been removing Japanese items from their stands and stopping new orders. 

Meanwhile, Japanese carmakers such as Toyota and Honda are bracing for further sales drops in South Korea in the coming months after they posted sharp sales declines last month.

A slew of South Korean airlines are also suspending flights to Japan in anticipation of dwindling tourist numbers.