April 26, 2024

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South Korea is sparing no efforts to persuade the international community this week to help press Japan withdraw its export restrictions on high-tech materials and impugn Tokyo’s reasoning behind its retaliatory measures.

Early this month, Japan announced it would curb exports on Korea’s high-tech materials crucial to the production of chips and display panels. It also said it plans to remove South Korea from a whitelist of 27 countries that receive preferential treatment for trade with Japan. The Japanese cabinet will consider the revision of relevant legislation after pooling opinions by July 24.


 

(Yonhap)

Also this week, at the request of the Korean government, the World Trade Organization’s General Council is slated to discuss the two nations’ trade dispute at its meeting on July 23 and 24.

The general council, which is the WTO’s highest-level decision-making body in Geneva, is not the main body to settle trade issues. But the Korean government aims to tell other members the unfair measures taken by Japan before officially taking the case to the WTO.

The Korean government is predicted to employ articles of the WTO’s General Agreement on Tariffs and Trade to counter Japan’s moves to exclude Korea from the whitelist and its restrictions on key tech materials.

Article 1 of GATT specifies that a country must offer the same terms to the whole world, not just one country. Article 11 prohibits quantitative restrictions on the importation or the exportation of any product among member nations.

The representatives are expected to be Ambassador Paik Ji-ah, Seoul’s top envoy at its permanent mission in Geneva, and Shingo Yamagami, director-general of Tokyo’s Foreign Ministry’s economic affairs bureau.

Alongside the council, South Korea’s Ministry of Trade, Industry and Energy plans to deliver an opinion this week to the Japanese government to press it to withdraw the export curbs.

“The opinion will be a synthesis of the iniquity of Japan’s measures on export curbs. It will include all the grounds and evidence that can back the stance of the Korean government,” said an official of the Industry Ministry. 

Amid an escalating trade row with Japan, the impact of the US-China trade war and the global electronics sector downturn, Korea saw a sharp fall in exports from January to April this year.

The world’s seventh-largest exporter reached $181 billion in exports from January to April, a 6.9 percent drop from the same period of last year. Japan also saw a 5.6 percent slump during the same period. 

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, said any protracted disruption of Japanese exports of the key materials to South Korea could disrupt the global electronics supply chain since Korea is a dominant global producer of memory components used in many electronics products.

“If the bilateral Japan-South Korea trade frictions significantly disrupt South Korea’s electronics supply chain, this could be a further negative factor for the global electronics industry outlook.”

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)