Japanese Government Likely to Become More Meticulous in Implementing Export Curbs

With the General Security of Military Information Agreement (GSOMIA) terminated, the Japanese government is expected to put pressure on South Korean industries by slightly increasing the number of items subject to export restrictions or delaying export inspection procedures rather than coming up with new high-impact measures.

The Japanese government conducted its first economic retaliation against South Korea early last month by strengthening its export restrictions on three semiconductor and display materials. More recently, it carried out the second retaliation by excluding South Korea from its trade white list with regard to strategic items and applying all-out restrictions to non-strategic items.

According to the South Korean government, the Japanese government is likely to maintain its export curbs within the current framework after the termination of the GSOMIA and this is because any additional restrictions can result in significant damage to Japanese companies. At present, many in Japan are criticizing their government as the two retaliations are increasingly affecting local semiconductor and electronics supply networks.

Likewise, the South Korean government is going to refrain from taking additional measures in view of the potential damage to South Korean companies. Still, the government is predicted to put pressure on Japan by strengthening its safety inspections targeting products imported from Fukushima and nearby regions.

Some are pointing out that the U.S. government can put more pressure on South Korea against its decision to terminate the GSOMIA. Last month, the United States said that South Korea and China were abusing their position as a developing country, calling for them to redress the situation. The Donald Trump administration is planning to make a decision by mid-November concerning automotive tariffs based on Section 232 of the Trade Expansion Act of 1962.