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(4th LD) Seoul delays countermeasure after Tokyo approves 1st shipment of restricted item

Diplomacy 20:35 August 08, 2019

(ATTN: ADDS details in last 3 paras)
By Kim Kwang-tae and Kim Soo-yeon

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.

(4th LD) Seoul delays countermeasure after Tokyo approves 1st shipment of restricted item - 1

South Korean Prime Minister Lee Nak-yon said earlier in the day that Japan's trade ministry had permitted the shipment of extreme ultraviolet (EUV) photoresist to South Korea.

In Tokyo, Japan's trade ministry confirmed its export approval for a case that posed no security risk, without identifying the item and its export destination.

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.

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)

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.

A South Korean presidential official described Japan's approval of the export as a positive development but repeated its call on Japan to quickly approve exports of other items.

"Our stance remains unchanged that Japan should quickly withdraw its removal (of South Korea) from its whitelist as uncertainty on other items has not been fully cleared," the presidential official told reporters on condition of anonymity.

Seoul's environment ministry, meanwhile, announced its plan to strengthen the customs clearance process for coal ashes imported from Japan amid concerns about radioactive contamination.

It is part of the government's efforts to ensure the safety of Koreans against Japanese imported goods, according to the ministry.

Coal waste generated at Japanese thermal power plants is being used as a supplementary material when producing cements in South Korea.

Currently, importers of Japanese coal ashes submit to the government documents verifying safety tests on radioactivity and heavy metal content. Selected samples are subject to authorities' inspection.

"The government has checked the authenticity of such tests on a quarterly basis, but it will take corresponding measures if needed after looking into all cases," the ministry said.

The government has been making efforts to expand communications with local companies to deal effectively with the dispute.

Kim Sang-jo, the chief of staff for policy at the presidential office, met executives of South Korea's top five conglomerates, including Samsung and Hyundai, earlier in the day, according to industry sources.

While details of the meeting were not immediately made public, the participants are presumed to have shared ideas on ways to cope with the trade row.



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