Japan Ignores Korea's Requests to Lift Sanctions
The South Korean government has decided to resume the process of filing a complaint with the World Trade Organization against Japan’s export restrictions. The process was temporarily halted in November 2019.
The Korean Ministry of Trade, Industry and Energy (MOTIE) announced on June 2 that it will file a complaint with the WTO against Japan's measures to restrict exports of three key items -- EUV photoresist, fluoride polyimide, and hydrogen fluoride -- to Korea since July 2019.
The Korean government filed a complaint with the WTO in September 2019, but temporarily suspended it in November of the same year, citing the resumption of "export management policy dialogue" between the two countries.
The Korean government's decision to resume the WTO proceeding was prompted by Japan’s virtual ignoring of the Korean government’s continued request to revoke the export restrictions. Since the resumption of the Korea-Japan export management policy dialogue, the MOTIE revised the Foreign Trade Act in March to strengthen export control of strategic materials that may be diverted to conventional weapons. In May, it expanded the organization in charge of trade security by appointing a trade security policy officer. These measures were intended to address the problems that Japan cited when it began imposing export restrictions in July 2019. "There was an answer to our ultimatum from the Japanese side, but it was not the one we wanted to hear," a MOTIE official said in a briefing.
Meanwhile, Japan's Chief Cabinet Secretary Yoshihide Suga expressed his regrets. "We are very sorry for the Korean government's announcement as it was made at a time when export authorities of the two countries were in talks," he said. "The Japanese government's review of export management operations announced in July 2019 has been in line with the WTO agreement. We will continue to clarify Japan's position in the future."
The Japanese government uses the term "export management" instead of "export regulations" in describing its action, to avoid giving the impression that its measures are retaliatory against the Korean Supreme Court's ruling on compensation for Koreans who suffered forced labor by the Japanese government in the past.
"It is regrettable that Korea unilaterally announced the resumption of the WTO complaint process despite continued talks between authorities of both countries," Japanese Foreign Minister Toshimitsu Motegi said in a press conference later on the day.
Earlier, the Korean government urged Japan to clarify its position on the export regulations by May 31, saying it had addressed the matters cited by the Japanese government as reasons for tightening the export regulations. However, as the Japanese government did not give a sincere response, the Korean government officially announced that it would take the matter to the WTO.
Japanese companies are also suffering from the Japanese export regulations. Stellar Chemical, a hydrogen fluoride producer, saw its net profit drop 18 percent in 2019. Another company, Morita Chemical Industries, also saw its trading volume with South Korea drop 30 percent following the export regulations.