The South Korean government can adopt a limited market access targeting Japanese goods or services, raise import tariffs, implement export restrictions against Japan, and strengthen its technology and standard certification requirements in order to respond more immediately to Japan’s export restrictions in compliance with the state responsibility rules of general international laws, the Korea Institute for International Economic Policy said in its report on July 16.
In principle, the South Korean government is required to give Japan prior notice regarding compensation for damage and propose negotiations. However, emergency countermeasures are possible if necessary although the countermeasures must be equivalent to South Korea’s damage caused by the restrictions. “It should be noted that these measures, which are not allowed in the framework of the WTO, may lead to WTO litigation against South Korea and Japan’s additional retaliation,” the institute explained.
The other options of the South Korean government include bilateral and multilateral diplomatic negotiations and litigation in the WTO. However, the latter based on the Dispute Settlement Understanding (DSU) of the WTO is not very effective in that it takes at least 28 months.
The Japanese government is likely to exclude South Korea from its so-called white list next month, and then South Korean companies must obtain individual export licenses for approximately 850 items and their damage is likely to increase in a wide variety of industries.