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(LEAD) S. Korea to remove Japan from its "whitelist" of trusted trading partners

All Headlines 17:09 August 02, 2019

(ATTN: UPDATES with details and quote in lead, paras 2-9)
By Kim Kwang-tae

SEOUL, Aug. 2 (Yonhap) -- South Korea said Friday that it will remove Japan from its "whitelist" of trusted trading partners in an escalating trade war between the two neighbors, in what could be its latest salvo against Tokyo's expanded trade restriction.

"We will take a step of strengthening export control by excluding Japan from the whitelist," Hong Nam-ki, the minister of economy and finance, said in a joint news conference.

He also said South Korea will step up efforts to file a complaint with the World Trade Organization (WTO) over Japan's export restrictions.

The move came just hours after South Korean President Moon Jae-in warned that South Korea will "resolutely take corresponding measures" in response to Japan's unjustifiable economic retaliatory measures.

Early in the day, Japan decided to drop South Korea from the "whitelist" of countries, despite South Korea's repeated calls to scrap the move, which it warns would further escalate their trade row.

The delisting requires Japanese companies to apply for an individual license to export about 1,120 dual-use items to South Korea, a move that could disrupt global supply chains for semiconductors and other key industrial products.

It is the second retaliatory step against last year's South Korean Supreme Court ruling that ordered Japanese firms to compensate South Korean victims of forced labor during Japan's 1910-45 colonial rule of the Korean Peninsula.

In July, Japan imposed tighter regulations on exports to South Korea of three materials -- resist, etching gas and fluorinated polyimide -- that are critical for the production of semiconductors and flexible displays.

Hong also pressed Japan to immediately withdraw its trade retaliation as South Korea called for a diplomatic resolution of the dispute.


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