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(2nd LD) Seoul delays countermeasure after Japan approves 1st shipment of restricted goods

Diplomacy 15:56 August 08, 2019

(ATTN: RECASTS throughout with S. Korea's delay in working out details in removing Japan from its whitelist in paras 1-4, 6)
By Kim Kwang-tae

TOKYO/SEOUL, Aug. 8 (Yonhap) -- South Korea on Thursday held off its decision to drop Japan from its list of trusted trading partners as the neighboring country approved the first shipment of a key material under restriction to South Korea, in what appears be a pause in their mounting trade tussle.

In its countermeasure against Japan's removal of South Korea from its so-called whitelist, the Seoul government has threatened to take Japan off its own list, upping the ante in the month-long trade haggling caused by Tokyo's export curbs on three key industrial materials crucial for the production of chips and display panels.

South Korea said last week that it will create a new category in its export controls and put Japan in the lower-tier category.

In the latest tweak, Japan officially dropped South Korea from its whitelist early this week, though it did not unveil any additional goods subject to tougher regulations when shipped to South Korea.

(2nd LD) Seoul delays countermeasure after Japan approves 1st shipment of restricted goods - 1

Earlier in the day, Japan's trade ministry said it had permitted the shipment of extreme ultraviolet (EUV) photoresist, saying it has concluded that the shipment of the material posed no national security risk.

But Japan made it clear that it would strictly implement its export regulations on goods bound for South Korea, signaling that the trade war would take a turn for the worse at any time.

The motive for Japan's approval of the shipment remains unclear.

Confronted with growing criticism from the international community for using trade as a tool for political gains, Japan may be seeking to give the impression that it's not banning trade with South Korea itself, observers said.

Industry officials in Seoul said Samsung Electronics Co. had applied for approval of photoresist used in its EUV fabrication line, in which the world's largest memory chip maker has a competitive edge.

"Samsung asked for the photoresist for EUV approved by the Japanese government, but it hasn't been delivered to the production line yet," an industry source familiar with the matter in Seoul said.

Once the chemical arrives here, Samsung is expected to use it in its fab line in Hwaseong, south of Seoul, the source said. The company plans to complete the construction of a new line at the site in the second half to ramp up EUV-based production from next year.

Samsung Electronics Co.'s fabrication line in Hwaseong, south of Seoul, is shown in this photo provided by the company on April 24, 2019. (PHOTO NOT FOR SALE) (Yonhap)

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