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New coronavirus leading to more jitters in Seoul-Tokyo trade row

All News 10:34 March 09, 2020

By Kang Yoon-seung

SEOUL, March 9 (Yonhap) -- South Korea and Japan plan to hold another meeting this week to discuss their monthslong trade dispute, but they are unlikely to reach a compromise anytime soon as the global outbreak of the new coronavirus has led to more jitters in the bilateral relationship.

The two Asian neighbors are set to hold their first trade meeting in around three months on Tuesday, according to the Ministry of Trade, Industry and Energy. While the meeting was planned to be held in Seoul, it was later replaced with a video conference, considering "various circumstances."

Seoul and Tokyo, which have been under a deadlock over trade for the past nine months, have recently fallen into another round of conflict amid the global spread of COVID-19 that led both countries to virtually shut their borders against each other.

New coronavirus leading to more jitters in Seoul-Tokyo trade row - 1

The dispute first started in July last year, when Japan imposed restrictions on exports to Seoul of three key industrial materials critical for South Korea's chip and display industries, namely photoresist, etching gas and fluorinated polyimide.

Tokyo cited Seoul's alleged lax export control system for sensitive materials that can be diverted for military use as the reason behind its export restrictions. It removed Seoul from its list of favored trade partners as well.

South Korea, which called Japan's allegations groundless, took a tit-for-tat move, also erasing Tokyo from the list of its trusted partners.

For the Seoul government, Japan's export curbs were considered more of a politically motivated move, which apparently came in response to the country's court rulings ordering Japanese firms to provide compensation for Korean victims of forced labor during Japan's 1910-45 colonial rule.

The two countries have made very little progress in amending their relationship.

To seek a breakthrough, South Korea in November decided to suspend its lawsuit filed against the World Trade Organization (WTO) and conditionally put off the termination of the General Security of Military Information Agreement (GSOMIA) with Japan.

In December, Tokyo partially lifted curbs on exports to South Korea of photoresist in an apparent goodwill gesture ahead of their summit as well.

All the efforts, however, failed to achieve notable progress.

New coronavirus leading to more jitters in Seoul-Tokyo trade row - 2

While the upcoming meeting was supposed to serve to provide hope for a breakthrough, the two countries are set to further languish in a deadlock as the global outbreak of COVID-19 has led to more trust issues.

Starting Monday, Japan adopted a temporary 14-day self-quarantine for people flying in from Korea and China and asked them to refrain from using public transport. Flights can only land at Narita International Airport near Tokyo and Kansai International Airport in Osaka.

Tokyo also decided to suspend its visa-waiver program for South Korean nationals.

In response, Seoul decided to suspend the its own visa-free entry program for Japanese visitors and invalidate already issued visas from midnight Monday, saying Tokyo's move shows a "lack of understanding" over South Korea's "advanced, outstanding" quarantine system.

Amid the prolonged disarray, South Korea said it nevertheless plans to focus on the upcoming dialogue, although it is too early to jump to a conclusion, according to another official.

Normalizing its trade with Japan has been one of the top policy priorities for South Korea as the move has emerged as a major business uncertainty for its tech firms, although the restriction has not yet caused a significant delay in the production of tech goods.

South Korea's exports to Japan slipped 6.9 percent in 2019, while imports fell at a bigger pace of 12.9 percent.

In a statement last week, South Korea said it has been making efforts to beef up its export-control capabilities and removed the issues raised by Japan.

For one, South Korea said it has increased the number of staff at the Korean Security Agency of Trade and Industry by 25 percent to better manage its export control system and restructured related organizations to better meet Japan's demands.

Seoul currently calls for Japan to take corresponding action and normalize its trade regulations to the level before July last year.


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