South Korea Kicks Japan Off List of Favored Trading Partners

Date: Tuesday, August 13, 2019
Source: The Wall Street Journal

Decision had been signaled earlier this month when Tokyo took a similar step

SEOUL—South Korea dropped Japan as a favored trading partner, further escalating tensions between the two U.S. allies.

Seoul said Monday it would remove Japan from a list of countries that qualify for accelerated imports of South Korean products, a move South Korea had signaled earlier this month when Tokyo enacted a similar measure against it.

Starting in early September, importing certain South Korean goods will require a process taking up to 15 days versus the current window of five days, Seoul’s Ministry of Trade, Industry and Energy said.

Japan’s Ministry of Economy, Trade and Industry couldn’t be reached for comment. It is a holiday in Japan.

The trade spat threatens to create delays all along the world’s tech-supply chain. Japan and South Korea play central roles in the manufacturing of electronics products from Apple Inc.’s iPhones to Amazon Inc.’s data servers.

The two countries are also essential to Washington’s efforts to persuade North Korea to relinquish its nuclear arsenal. President Trump told reporters Friday that Japan and South Korea need to get along, as their dispute places the U.S. in a bad position. Washington hasn’t yet taken an active role to mediate the disagreement.

The saga, which traces back to the World War II era, has dragged relations to their worst levels in decades, experts say, setting off boycotts and protests in South Korea.

South Korean trade officials said the action isn’t a reaction to Japan’s similar measure, but part of its regular trade oversight.

“It’s difficult to work closely with countries whose practices don’t abide by basic principles of the international export-control system and continuously are applied inappropriately,” said Sung Yun-mo, South Korea’s Minister of Trade, Industry and Energy. He added that Seoul is open to negotiating with the Japanese government on the change at any time during the review period.

Japan has previously defended its trade restrictions against South Korea for national-security reasons. But other Japanese officials have cited a breach in trust stemming from a South Korean court’s decision last year on World War II reparations.

Earlier this month South Korea said it would invest $6.5 billion in research and development for industrial materials and equipment. South Korean chip makers Samsung Electronics Co. and SK Hynix Inc. have said they are seeking to diversify suppliers.

Seoul’s measures are expected to take effect after a 20-day review period.

 

Read from the original source.

 

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