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South Korea to Remove Japan From Trading White List

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By The Maritime Executive 2019-08-05 22:05:36

South Korea plans to remove Japan from its trusted trading partner white list, amid an escalating trade war.

The conflict is the result of South Korea's expectations for compensation for forced labor and sexual slavery by Japan before and during World War II.  A local court ruled last month that Japanese companies should provide compensation for war-time forced labor.

Last week when Japan downgraded its trading relationship with South Korea by taking it off a list of nations for which exports of industrial and high-tech products are fast-tracked. 

The new Japanese restrictions will come into effect on August 28, and they follow moves last month by Japan to tighten controls on exports of chemicals used to make semiconductors and digital screens. Japan claimed these items, important to South Korea's economy, posed national security concerns.

Thousands of South Koreans protested over the weekend, accusing Japan of “economic invasion.” South Korea's industry minister said on Sunday that he would help the nation's industry cope with Japan's economic retaliation and export restrictions on key industrial materials.

President Moon Jae-in warned: “As it has become clear that the responsibility for the worsening situation lies with Japan, I clearly warn that the Japanese government will be fully responsible for what happens going forward. We won’t be defeated by Japan again.”

South Korean imports of Japanese beer and cars dropped dramatically in July - with beer imports down 45 percent and car imports down 17 percent.

South Korea is now considering withdrawing from an intelligence-sharing deal signed in 2016 to support U.S. military bases that the two nations host. The deal has been automatically renewed each year but could be terminated by either nation before this year’s deadline of August 24.