S’Korea restores Japan to trade whitelist after years of conflict

Bisola David
Bisola David
S'Korea restores Japan to trade whitelist after years of conflict

South Korea has formally restored Japan to its list of countries that receive preferential economic treatment, three years after the neighbors downgraded each other’s commercial status amid a diplomatic conflict fueled by historical grudges.

According to Aljazeera, to support the US-led pressure campaign against Moscow for the crisis in Ukraine, the South Korean Ministry of Trade, Industry, and Energy announced the decision through a government gazette on Monday. It also claimed Seoul will further restrict technology and industrial exports to Russia and its ally Belarus.

To combat the threat posed by North Korea, Seoul, and Tokyo are attempting to mend fences after years of tension. They are also tightening their three-way security cooperation with Washington. Pyongyang has employed the distractions caused by the war to accelerate the testing of nuclear-capable missiles.

The procedures to change Japan’s export restrictions suggest that South Korean officials will have to wait longer than expected for Tokyo to reinstate Seoul as a preferred trading partner.

In response to Tokyo’s similar action, South Korea removed Japan from its “white list” of nations eligible for expedited trade permits in September 2019. South Korea filed a protest with the World Trade Organization after Japan tightened export regulations on crucial chemicals that South Korean businesses use to manufacture semiconductors and displays.

Seoul charged Tokyo with using trade as a weapon in retaliation for South Korean court decisions ordering Japanese businesses to compensate South Koreans forced into slave labor before the end of World War II when Japan colonized the Korean Peninsula.

The 2018 judgments infuriated Japan, which maintains that a 1965 treaty that normalized relations resolved all compensation-related disputes.

When the government of South Korean President Yoon Suk-yeol, who took office in May 2022, announced plans to use South Korean finances to recompense the forced laborers without demanding Japanese contributions, the alliance between the United States’ allies started to thaw in March. Yoon traveled to Tokyo to meet with Prime Minister Fumio Kishida of Japan, with whom he made a commitment to rebuild the security and economy of their respective nations.

Yoon’s efforts to repair relations with Tokyo have drawn criticism from both his political enemies and from some victims of forced labor. They demanded that the Japanese businesses that used the forced laborers pay them directly. Yoon, though, has defended his choice, asserting that better ties with Japan are necessary for addressing a number of regional issues, particularly North Korea’s growing nuclear threat.

Following the Yoon-Kishida summit, South Korea abandoned its WTO case against Japan as Tokyo announced it has lifted export restrictions on a group of chemicals deemed essential to the country’s technological sector.

Fluorinated polyimides, which are used in organic light-emitting diode screens for TVs and smartphones, as well as photoresist and hydrogen fluoride, which are used to make semiconductors, were all subject to Japanese limitations.

With Japan’s status being restored, South Korea is now giving 29 nations, including the US, UK, and France, priority consideration when it comes to exports of delicate “strategic” commodities that can be used for both civilian and military objectives.

In order to manage the approval of the export of sensitive materials, South Korea classifies its trading partners into two categories. White-list countries typically have a waiting period of five days, while other countries must undergo case-by-case reviews, which can take up to 15 days.

The South Korean trade ministry also declared that this week will see the start of the country’s export restrictions against Russia and Belarus, which would affect hundreds of industrial products and components.

Seoul has so far implemented controls on 57 products, including those used in shipbuilding and electronics, and has forbidden enterprises from shipping these products to Russia and Belarus unless they have received special permission. Starting on Friday, there will be 798 items on the list, including exports of advanced computing, machinery, steelmaking, autos, semiconductors, and construction.

“We plan to work with relevant ministries to strengthen crackdowns and enforcement to prevent (the restricted items) from reaching Russia or Belarus through third countries,” the ministry stated in a statement.

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