The Japanese government announced that it would withdraw its export procedure-related preferential treatment for South Korea this month or next.
This means South Korean companies must obtain an individual export license for each strategic item, including semiconductors and displays, and Japan’s export restrictions will be strengthened in almost all industries down the road. According to the South Korean government, the measure is likely to affect more than 1,100 items. The government is currently working on countermeasures with regard to 100 items most likely to be targeted by the Japanese government while monitoring situations in the industries including automobile and precision chemical.
International credit rating agency S&P said that the ongoing trade disputes between South Korea and Japan can pose a downside risk on the former’s economy. Global economy experts are pointing out that the disputes will lead to a negative chain reaction with global value chains closely intertwined.
Under the circumstances, the Nihon Keizai Shimbun reported on July 14 that the WTO will discuss Japan’s semiconductor material export restrictions against South Korea at its general board meeting scheduled for July 23 and 24 in Geneva, Switzerland. Earlier, South Korea criticized Japan at a WTO conference on July 9. In response, the Japanese government said that its measure is necessary for security-related export system check and constitutes no export restrictions.