As Japan imposed export restrictions on some items needed for manufacturing such as semiconductors, the South Korean government has started to come up with countermeasures.
The government held a greenroom meeting with Trade, Industry and Energy Minister Sung Yun-mo, senior presidential secretary for economic affairs Lee Ho-seung and heads of related ministries presided over by Deputy Prime Minister Hong Nam-ki on July 1.
Government officials then held a meeting at the Korea Trade Insurance Corp. in Seoul to check export conditions and discuss necessary measures, including a complaint to the World Trade Organization.
"We closely checked the situation and the direction of response through a meeting of related ministers earlier in the day," said Industry Minister Sung Yun-mo. "In the future, we will take steps in accordance with international and domestic laws, including the WTO complaint."
Minister also expressed deep regret after defining Japan's export restrictions as an economic retaliation measure.
"Korean government has been trying to maintain reciprocal cooperation with Japan in the economic field, but today the Japanese government imposed export restrictions on Korea for economic retaliation," said minister. "The reason why the Japanese government did this is because the Korean Supreme Court ruled that Japan should compensate victims of forced labor."
"This is deeply regrettable because it goes against the common sense that the separation of powers is a democratic principle," he added. "The export-restriction measures are also banned in principle at the WTO's cooperation. It runs squarely counter to the spirit of agreement in the G-20 summit declaration Japan hosted last week as the chair country."
The G20 summit declaration includes "We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open."
"We will make every effort to provide support to minimize damage to our companies through close communication with the industry, and use it as an opportunity to enhance the competitiveness of our parts, materials and equipment," minister sung stressed.
Meanwhile, Japan's Ministry of Economic and Industrial Affairs said on the same day that it will impose strong regulations when exporting key items that are absolutely necessary to produce semiconductors and smartphones to Korea.
Items announced to tighten regulations on the nation's exports include transparent polyimide, which is used to make liquid crystal screens such as smartphones and TVs, photoresist needed to make semiconductor substrates, and high purity fluoride used to clean semiconductors. These items simplify export procedures for some countries only. Japan has decided to exclude Korea from those countries.
Korean companies must immediately go through the Japanese government's approval whenever they bring in these items from July 4. The process could take more than three months, industry sources said.
The Kyodo news agency reported that the Japanese government asked the South Korean government to resolve the issue of compensation for forced conscription, but it carried out tough measures because the problem has not been resolved.
Some, however, predicted that retaliatory measures will not last long, saying that Korea will not only suffer from export restrictions, but Japan will also have to be prepared to suffer losses.