Tokyo Set to Remove Korea from Trade Whitelist
Tokyo has been ignoring Seoul’s proposals to hold talks to discuss Japan’s trade restrictions on South Korea. South Korean Trade Minister Yoo Myung-hee told reporters on July 29 that she proposed to Japan's Trade Minister Hiroshige Seko that they meet on the sidelines of the ministerial conference of the 8th Regional Comprehensive Economic Partnership (RCEP) scheduled to be held in Zhengzhou, China, from Aug. 2. Seko, however, declined the request citing his schedule. He is known as the leader of Japan’s latest decision to impose export curbs against South Korea.
However, there is a possibility that Yoo and Seko will have a meeting at the RCEP ministerial conference. An official from the Ministry of Trade, Industry and Energy (MOTIE) said, “It is still unclear whether Seko will attend the RCEP ministerial conference or not. But, we are keeping our eyes on it because there is a possibility.”
Yeo Han-koo, head of trade negation bureau of the MOTIE, held a bilateral meeting with four Japanese chief delegates for the RCEP conference on July 27. During the meeting, Yeo said, “Japan’s export regulatory measures undermine international trade norms and hamper trade liberalization in the region. Since they can cause serious damage to the global value chain and the RCEP region, Japan should immediately revoke export regulations and keep South Korea on its trade whitelist.”
In addition, both Foreign Minister Kang Kyung-hwa and her Japanese counterpart Taro Kono are planning to arrive in Bangkok, Thailand, on July 31 to attend the foreign ministers' meeting of ASEAN Regional Forum (ARF) slated for Aug. 2. An official from the Ministry of Foreign Affairs said, “It is difficult to predict whether the foreign ministers of South Korea and Japan will have a meeting but there is a possibility.” It is also reported that the United States is planning to push for trilateral talks, including Secretary of State Mike Pompeo, at the ARF conference.
Japan is expected to approve a rule that will remove South Korea from its "whitelist" of countries at a cabinet meeting on Aug. 2. Yoo said, “During my visit to the United States last week, I could confirm growing concern over the unfairness of Japan’s export regulations and their negative effects on the global supply chain and the international trade order. We will bring up the inequity of Japan’s action in every important meeting, including the RCEP ministerial conference this week, and form a consensus in the international society.”
In a written answer to the Strategy and Finance Committee of the National Assembly, Deputy Prime Minister and Finance Minister Hong Nam-ki said, “If Japan excludes South Korea from its whitelist, it would deal a blow to South Korean companies in a wide range of fields such as high-tech materials, electronics and telecommunications.” In regard to the material and component industries, Hong said, “Output of these industries grew by more than three times from 240 trillion won (US$202.62 billion) to 786 trillion won (US$663.57 billion) between 2001 and 2017, but the rate of localization remained at some 60 percent. Companies have relied on the existing value chain, including Japan, to secure stable suppliers and focused on inventory management and production.”
Asked about whether South Korea should take corresponding measures against Japan’s export curbs, Hong said, “We should firmly deal with unfair action, but the vicious cycle of retaliatory measures is not desirable to both countries. We think that the Japanese government should act wisely in order not to worsen the national sentiment in both countries.”