Japan strips S. Korean of special trade status

S. Korea to tighten export regulations on Japan

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TOKYO/ SEOUL; Japan on Friday decided to remove South Korea from a list of nations entitled to simplified export control procedures, a move that has already triggered a harsh backlash from Seoul and will likely see ties further soured between both countries.
The Cabinet of Prime Minister Shinzo Abe approved plans to remove South Korea from its white list of countries, raising the stakes in a bitter diplomatic row between the two neighbors. The removal of South Korea from the list will take effect on August 28 following the necessary completion of domestic procedures, Japanese Minister of Economy, Trade and Industry Hiroshige Seko said at a press conference on Friday.
Seko maintained that the move by Tokyo was not aimed at curbing trade or supposed to damage bilateral ties between both countries, but did point to some perceived “deficiencies” on South Korea’s part. Today’s Cabinet decision is a review of the implementation of Japanese export policies in response to some deficiencies in South Korea’s export control system and its application, Seko said.
Japan has no intention for this to alter relations with South Korea, and it is not meant as a countermeasure against certain issues, said Japan’s trade minister. Observers have noted, however, that bilateral relations have already sunk to new lows in recent times amid an ongoing labor dispute and Japan’s previous tightening of export control regulations, and the latest move by Japan would likely see ties further deteriorate.
On the other hand, South Korean Minister of Economy and Finance Hong Nam-ki said Friday that the country will tighten export regulations on Japan in response to Japan’s removal of South Korea from its whitelist of trusted trading partners. Hong, who also serves as the deputy prime minister for economic affairs, told a press briefing that South Korea will take actions to strengthen the export management towards Japan by removing Japan from the whitelist.
The minister said the government will speed up the process of taking Japan’s export restriction to the World Trade Organization (WTO) as Japan’s action is in violation of the WTO rules. Japan’s action will affect 1,194 strategic materials in trade between the two countries, but 159 items will be actually influenced when excluding items that are not used here, not made in Japan, or can be replaced with other items, Hong noted.
He said the government will help local companies find alternative import sources, simplify the import process of alternative items and reduce tariff burden. The government will provide support for the development of parts and materials and the construction of factories to expand the production of the affected materials

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