In his strongest comments yet on a growing trade dispute, South Korean President Moon Jae-in yesterday urged Japan to lift recently tightened controls on high-tech exports to South Korea, which he said threaten to shatter the countries’ economic cooperation and could damage Japan more than South Korea.
The dispute has further soured relations already troubled over Japan’s colonial rule of the then-unified Korea before the end of World War II.
Moon accused Japan of abusing its leverage in trade to punish South Korea over their historical dispute.
South Korea sees the trade curbs as retaliation for South Korean court rulings earlier this year that ordered Japanese corporations to compensate South Korean victims for forced labor during World War II.
South Korea says the strengthened export controls of photoresists and other sensitive materials used mainly to manufacture semiconductors and display screens could hurt its export-dependent economy and disrupt global supply chains.
Its government plans to file a complaint with the WTO and raise the issue at next week’s WTO General Council in Geneva, Switzerland.
Trade officials from the two countries failed to resolve the dispute in a working-level meeting in Tokyo on Friday.
Moon also said that South Korea would use the dispute as an opportunity to reduce its dependence on Japan by strengthening its technology industry and diversifying import sources.
“Japan’s export restrictions have broken the framework of economic cooperation between South Korea and Japan that had continued over a half-century based on mutual dependence,” Moon said in a meeting of senior aides at the Blue House in Seoul.
“The shattered credibility of cooperation with Japan in the manufacturing industry will inspire our companies to break out of their dependence on Japanese materials, components and equipment and work toward diversifying import sources or localizing the technologies. I warn that, eventually, it will be the Japanese economy that will be damaged more,” he said.
Moon spoke hours after dozens of South Korean small-business owners rallied in Seoul, calling for boycotts of Japanese consumer goods.
The Japanese measures, which went into effect earlier this month, have stoked public anger in South Korea, where many say that Japan still has not fully acknowledged responsibility for atrocities committed during its colonial occupation of Korea from 1910 to 1945.
Korea Mart Association president Kim Sung-min urged shop owners to boycott the distribution of Japanese products until Tokyo apologizes over the trade curbs and withdraws them.
Other demonstrators held up placards that read: “Our supermarket does not sell Japanese products.”
“We will continue boycotting the consumption and distribution of Japanese products until Japan’s government and the Abe administration apologizes and withdraws its economic retaliation,” Kim said, referring to Japanese Prime Minister Shinzo Abe.
Tokyo says the materials affected by the export controls can be sent only to trustworthy trading partners.
Abe and his aides suggested that there might have been illegal transfers of sensitive materials from South Korea to North Korea.
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