South Korea Adds Back Japan To Its 'White List' On Trade

Recently, South Korea officially restored Japan to its list of nations it provides privileged benefits in trade, three years after the neighboring countries lowered each other’s trade positions amid a diplomatic row accelerated by historical issues.

In declaring its move through an official government gazette, South Korea’s Ministry of Trade, Industry and Energy also stated Seoul will further confine innovation and industrial exports to Russia and its partner Belarus to aid the US drive-pressure campaign against Moscow over the war in Ukraine.

After years of struggle, Seoul and Tokyo are attempting to fix relations as they upgrade their three-way security participation with Washington to confront the threat incorporated by North Korea. Pyongyang has utilized the interruptions caused by the war to speed up the testing of nuclear-capable missiles.

South Korean authorities anticipate Tokyo to reestablish Seoul as a favored trade partner too but expect that this job is going to be more time-consuming based on the techniques to modify Japan’s export guidelines.

In September 2019, South Korea dropped Japan from its “White List” of nations gaining fast-track approvals in trade, responding to a comparative move by Tokyo. Japan had also strengthened export regulations on vital chemicals South Korean organizations use to produce semiconductors and displays, provoking South Korea to lodge a complaint with the World Trade Organization.

Seoul blamed Tokyo for weaponizing trade strikes against South Korean court decisions that ordered Japanese companies to provide reparations to South Koreans constrained into slave work before the end of World War II when Japan had colonized the Korean Peninsula. The 2018 rulings disturbed Japan, which insisted all the compensation complexities were handled by a 1965 treaty that normalized decisions. Relations between the US partners started to defrost in March when the government of South Korean President Yoon Suk Yeol, who took charge in May 2022, declared strategies to utilize South Korean funds to compensate the forced laborers without demanding Japanese contributions. Yoon went to Tokyo to interact with Japanese Prime Minister Fumio Kishida and they committed to reestablishing the nation’s safety and economic rules.

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Yoon’s focus to make up ties with Tokyo has initiated criticism from some constrained labor victims and from his political rivals. They demanded direct compensation from Japanese organizations that employed forced laborers. Yet, Yoon has safeguarded his choice, stating closer ties with Japan are vital for handling a slew of area complexities, especially North Korea’s increasing nuclear threat.

Following the Yoon-Kishida summit, South Korea took back its complaint at the WTO against Japan as Tokyo also assured of its removal of export controls over a combination of chemicals considered as important to South Korea’s technology industry. The Japanese restrictions covered fluorinated polyimides, which are utilized in organic light-emitting diode (OLED) screens for TVs, smartphones, and photoresists, and hydrogen fluoride, which accounted for creating semiconductors. With Japan’s reestablished, South Korea now gives preferential treatment to 29 nations - including the United States, Britain, and France - oversupply of delicate “strategic” materials that can be utilized for both civilian and military agendas.

South Korea separates its trade partners into two groups in handling supply approvals of sensitive materials. The waiting period is generally five days for white-list nations, while other nations are compelled to go through case-by-case evaluations that can take up to 15 days. 

In reporting its new guidelines over exports of strategic materials, the South Korean Trade Ministry also stated the nation will introduce hundreds more industrial products and components under its export restrictions against Russia and Belarus starting this week.

Seoul’s controls so far have accounted for 57 items, including those related to electronics and shipbuilding, with authorities prohibiting their shipments to Russia and Belarus unless the companies gain special approvals. The list will extend to 798 items, including exports related to construction, machinery, steelmaking, automobiles, semiconductors, and advanced computing. 

“(We) strategize to operate with suitable ministries to boost crackdowns and implementation to prohibit (the restricted items) from reaching Russia or Belarus through third nations,” the Ministry said in a statement.

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