Japan’s government spokesman has said his country’s downgrading of South Korea’s trade status is not intended as retaliation for disputes over court rulings ordering Japanese companies to pay compensation for their treatment of Korean labourers during World War II.
A decision by the Japanese Cabinet last Friday to drop South Korea from a list of countries granted preferred trade status became official on Wednesday when it was published in Japan’s official gazette, KAMPO. The measure will take effect on August 28.
The step adds to Japan’s export controls imposed in July on three key materials for South Korea’s semiconductor industry, an attempt seen by South Koreans as an attack on the industry at the core of its economy and reminding them of wartime grievances.
Japan colonised the Korean Peninsula from 1910 to 1945 and insists all compensation issues were settled under a 1965 agreement normalising ties.
Chief Cabinet Secretary Yoshihide Suga said on Wednesday that the measures are about Japan’s national security concerns and not countermeasures for the court rulings.
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.
“The revision was a necessary step for Japan to appropriately carry out its export control system from a national security point of view,” Suga said. “It was not intended to affect Japan-South Korea relations, let alone economic countermeasures or retaliation.”
Japanese officials have said that South Korea, with its insufficient export control system and operation, no longer qualifies as a country with preferential status for Japanese shipments.
Suga said the measure only puts South Korea back to standard class, or the second tier of four divisions. “It’s not an export ban,” he said.
Japanese officials have also denied South Korea’s allegation that they are using trade to retaliate, but Prime Minister Shinzo Abe and other officials had earlier suggested a link between the two issues.
The officials kept mentioning new reasons, including lack of communication between the two export control authorities, triggering doubts that the real issue may be the historical dispute.
Abe, when asked about the deteriorating relations between the neighbours and a prospect for meeting South Korean President Moon Jae-in at upcoming international events, said the main cause of escalating tensions between the two countries is the wartime compensation issue.
Anger over the tightened export controls has prompted a widespread boycott by South Koreans of Japanese products and services, from beer to clothes and cars to travel.
Many supermarkets and convenience stores have been removing Japanese items from their stands and stopping new orders.
South Korean imports of Japanese beer have slumped 45 percent in July from the previous month amid the boycott, which – if it continues – could be seriously damaging as South Korea buys 61 percent of Japan’s beer exports.
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 as they brace for a dwindling number of tourists.
South Korea’s second-largest carrier Asiana Airlines Inc and Eastar Jet said on Wednesday they would temporarily halt a combined four more flights between Korea and Japan.