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S. Korea warns of countermeasures to Japan's curbs

China Daily Global | Updated: 2019-07-05 07:59

SEOUL - South Korea's economic policy chief warned on Thursday that the country make take measures in response if Japan restricts exports of certain high-tech materials to South Korean companies for a long time.

"Implementing corresponding measures against Japan cannot be ruled out because it will take a long time for the World Trade Organization to produce a conclusion," South Korean Finance Minister Hong Nam-ki said on radio.

Japan has said it would tighten curbs on exports of three materials used in smartphone displays and chips to South Korea amid a growing dispute over wartime forced labor. South Korea has so far sought to settle the issue through the WTO.

The export curbs could hamper production of South Korea's chip giants Samsung Electronics and SK Hynix as the two chemicals targeted are essential, analysts say.

Hong also said he expected the South Korean central bank's monetary policy committee to take recent changes in economic conditions into account when it decides on its interest rate policy.

A day earlier, Japanese Prime Minister Shinzo Abe said that Japan cannot give South Korean exports preferential treatment because the country is not abiding by an agreement regarding wartime issues that Japan insists have been resolved.

Abe was objecting to criticism over escalating tensions between the two neighbors amid disputes over Koreans forced to work as laborers during World War II when the Korean Peninsula was Japanese colony.

He was also defending a decision announced on Monday to impose restrictions on Japan's exports of semiconductor-related materials to South Korea. As of Thursday, exports of some materials used in manufacturing computer parts, including fluorinated polyimides used for displays, must apply for approval for each contract.

"We did not intertwine historical issues with trade issues," Abe said. "The issue of former Korean laborers is not about a historical issue but about whether to keep the promise between countries under international law, ... and what to do when the promise is broken."

Abe made the comment when asked about diplomacy during a party leaders' debate ahead of Tuesday's start of official campaigning for the Japan's July 21 elections to the Upper House.

To counter Japan's decision, South Korea said on Wednesday it will seek to invest 1 trillion won ($854.4 million) annually in developing homegrown materials and equipment used to produce microchips.

"We are doing a preliminary feasibility analysis (on the investment)," Cho Jeong-sik from the South Korea's Democratic Party told reporters after meeting with officials from the presidential office and government ministries to discuss a response to Japan's decision.

Relations between the two countries have rapidly soured since South Korea's top court in October ordered Nippon Steel & Sumitomo Metal Corp to pay 100 million won each to four plaintiffs forced to work for the company during Japan's 1910-45 colonization of the Korean Peninsula. South Korea's top court ordered the seizure of local assets of the company after it refused to pay the compensation.

Mitsubishi Heavy Industries also has refused an order by South Korea's Supreme Court to financially compensate 10 elderly Koreans for forced labor during Japan's colonial era.

Agencies

(China Daily Global 07/05/2019 page7)

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