South Korea seeks US help in bitter trade spat with Japan

Analysts say U.S. help would be critical for South Korea’s efforts to find an end to its trade dispute with Japan as it doesn’t have much leverage against the economically stronger Tokyo.

11 July 2019 | 11:15

Source: Associated Press

  • Source: Associated Press
  • Last update: 11 July 2019 | 11:15

In this Tuesday, July 9, 2019, file photo, notices campaigning for a boycott of Japanese-made products are displayed at a store in Seoul, South Korea. (AP Photo)

SEOUL, South Korea: South Korea is seeking U.S. help in a bitter diplomatic row with fellow American ally Japan over its moves to tighten controls on high-tech exports.

The government said Thursday that Foreign Minister Kang Kyung-wha discussed the issue with U.S. Secretary of State Mike Pompeo by phone and conveyed Seoul’s view that Japan’s “undesirable” trade curbs could disrupt global supply chains and hurt trilateral cooperation among the countries.

The ministry said Pompeo expressed an “understanding” of South Korea’s position and agreed to help facilitate communication through diplomatic channels among Washington, Seoul and Tokyo.

Tokyo last week tightened the approval process for Japanese shipments of photoresists and other sensitive materials to South Korean companies, which need the chemicals to produce semiconductors and display screens used in TVs and smartphones.

The move has escalated into a full-blown diplomatic dispute that threatens to worsen relations between the neighbors, which have feuded in past years over issues related to Japan’s brutal colonial rule of Korea before the end of World War II.

″(Minister Kang) expressed concern that Japan’s trade restrictions would not only inflict damage to our companies, but could also disrupt global supply chains and cause negative effects not only to U.S. companies but also to the global trade order,” the ministry said in a press release.

“This would not be ideal for the bilateral friendship and cooperation between South Korea and Japan and also the three-way cooperation between South Korea, the United States and Japan.”

Kim Hyun-chong, deputy chief of South Korea’s presidential National Security Office, arrived in Washington on Wednesday and told reporters he would discuss the trade spat with Japan with U.S. officials. His trip came a day after South Korean President Moon Jae-in urged Japan to refrain from pushing the situation to a “dead-end street” and respond to Seoul’s efforts to resolve the matter diplomatically.

“I came because there are a lot of bilateral issues between South Korea and the United States to be discussed in meetings with the White House and also the Senate and House,” Kim told South Korean reporters at the Dulles International Airport. When asked whether South Korea would ask the United States to mediate in the trade dispute with Japan, Kim said, “That issue will be discussed too.”

Analysts say U.S. help would be critical for South Korea’s efforts to find an end to its trade dispute with Japan as it doesn’t have much leverage against the economically stronger Tokyo.

The deteriorating relationship between South Korea and Japan could possibly complicate U.S. efforts to strengthen their three-way cooperation to deal with nuclear-armed North Korea and China’s growing influence in the region. But it’s unclear how much the Trump administration would be willing to intervene, considering its close ties with Tokyo and when it seems to put less value on alliances than previous U.S. governments.

South Korea’s Ministry of Trade, Industry and Energy said its minister for trade, Yoo Myung-hee, will head for the United States soon to discuss the Japanese trade curbs. South Korea will also send trade officials to Tokyo for a meeting with their Japanese counterparts on Friday, but the ministry said Japan has so far shown no willingness to negotiate its measures and will likely use the meeting to explain and reaffirm its stance.

According to the ministry’s figures, South Korea’s economy received $330 million in direct investment from Japan during the first six months of the year, a 51% drop from the same period last year.

Park Tae-seong, a senior ministry official, said the decline was unrelated to Tokyo’s trade curbs that were announced in July and that Japanese companies were committing more money to domestic investment ahead of next year’s Tokyo Olympics. He didn’t answer straightforwardly when asked whether the worsening relationship between Seoul and Tokyo was affecting Japanese investment to South Korea.

South Korea, an export-reliant economy that is the world’s biggest supplier of computer chips and displays, sees the Japanese trade curbs as retaliation for court rulings that ordered Japanese firms to compensate aging South Korean plaintiffs for forced labor during World War II.

Japanese officials say such materials can be exported only to trustworthy trading partners, hinting at security risks and illegal transfers of sensitive materials to North Korea, without citing specific cases.

South Korea has denied the claims, saying that an inspection of companies that process and export chemicals imported from Japan found no sign of illegal transactions that allowed them to reach North Korea or any other country affected by U.N. sanctions.

South Korea plans to file a complaint with the World Trade organization. It raised the issue at a WTO Goods Council meeting in Geneva on Tuesday, calling on Japan to withdraw its tighter restrictions, which it says have repercussions for electronics products worldwide.

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