Japan issued statements clarifying its position under its new export restrictions against South Korea, saying certain export conditions will be tightened but others will not be impacted. The measures, which took effect Aug. 28, place restrictions on chemicals -- and other goods -- used to make computer chips and other high-tech products (see 1908020023).
Chip export news
Japan said it will allow “legitimate” exports to South Korea as it prepares today to remove the country from its list of trusted trading partners. During an Aug. 27 press conference, Hiroshige Seko, Japan’s minister of trade, economy and industry, repeated assertions that the move is not a “countermeasure” to any South Korean actions and is not an export embargo.
South Korean and Japanese officials will meet in Beijing this week amid the countries’ trade dispute over export controls, South Korea’s Ministry of Foreign Affairs said Aug. 16. The meeting is the first between the foreign ministers of the two sides in three years, South Korea said, and will feature the foreign minister of China as well. South Korea also said it is trying to hold separate bilateral talks with both Japan and China “on the sidelines” of the meeting in Beijing. The meetings, which South Korea said will take place Aug. 20-22, come as both Japan and South Korea are entrenched in a trade dispute dating back to July 1, when Japan announced restrictions on exports to South Korea involving chemicals needed to make computer chips and other high-tech goods (see 1907010020).
South Korea is trying to increase domestic production of “key materials and parts” to reduce its reliance on trade with Japan, according to an Aug. 9 South Korea Ministry of Trade press release. Sung Yun-mo, South Korea’s Minister of Trade, Industry and Energy, met with state-run research institutions on Aug. 8 at the Korea Institute of Chemical Technology to discuss how the country can increase production. The meeting comes amid a trade dispute between Japan and South Korea in which Japan announced export restrictions on three chemicals used for the manufacturing of smart chips and other technologies.
Japan is approving exports for a semiconductor manufacturing material to South Korea days after removing the country from its list of trusted trading partners, stressing that South Korea’s removal from the list was not an export embargo, Japan’s trade minister Hiroshige Seko said during an Aug. 8 press conference. But Seko also said Japan will not hesitate to increase export restrictions on South Korea if it finds more “specific inappropriate cases” of South Korea’s export control regime, according to an unofficial translation of the press conference.
The Japan-South Korea trade dispute may impact the U.S. and potentially require the intervention of U.S. export control officials, experts said during an Aug. 7 Heritage Foundation panel discussion. They also said it will be difficult for South Korea to get back on Japan’s so-called “whitelist” of preferential trading partners, a move that could hurt Japanese companies more than any other party.
South Korean companies can still import Japanese goods despite Japan’s export restrictions by making use of a Japanese approval process called the Compliance Program, according to an Aug. 3 report from the Korea JoongAng Daily. The program allows certain registered companies a shortened timeline for exporting dual-use items and allows them to trade freely for three years with “no additional paperwork,” the report said. The report said 632 Japanese companies are registered with the program, including “major material manufacturers and chemical companies” such as Toray Industries, JSR, Sumitomo Chemical and Showa Denko.
Japan is expected to pass a bill to remove South Korea from its so-called "whitelist" of trusted trading partners as the two countries grow more entrenched in their ongoing trade dispute, according to a July 30 report from The Korea Herald.
Japan’s Ministry of Economy, Trade and Industry released a July 24 statement about Japan’s ongoing dispute with South Korea, saying South Korea’s position on “catch-all controls” are “unclear” and criticizing South Korea for continuously postponing “policy dialogue” talks.
Treasury Secretary Steven Mnuchin and Larry Kudlow, the president's chief economic adviser, were set to meet July 22 with executives from Intel, Qualcomm, Broadcom, Micron, Google and other tech firms, Reuters reported. The news agency said the meeting was to discuss the restrictions on exports to Huawei, which have hurt many chip makers, and have led Google to tell Huawei its phones cannot use Android operating software. A White House spokesman told Reuters that while the Huawei ban will likely come up, that's not the purpose of the meeting.