July 03, 2019 09:48
Cheong Wa Dae was apparently stumped Tuesday by new Japanese export curbs on materials that are vital to Korea's IT industry.
In a Cabinet meeting, officials were unable to come up with any remedies for Korea's removal from an export "whitelist" for three core materials used to make semiconductors, televisions and smartphones, which was expressly designed as retaliation in a bilateral spat over compensation for forced labor victims. President Moon Jae-in did not say a word about the crisis.
A senior Cheong Wa Dae official said, "I believe diversifying imports, bolstering domestic production and developing home-grown products could be a possible solution." But at the moment Japan controls 70 to 90 percent of the markets for fluorinated polyimide, high-purity hydrogen fluoride, and photoresist, so diversification may not be an option.
Foreign Minister Kang Kyung-wha, pulled up about the export curbs, only said, "I think we need to do some research and monitor the situation."
Industry insiders say filing a complaint against Japan at the World Trade Organization and producing the materials in Korea cannot shield Korean businesses in the short term. "If Japan resorts to actual retaliatory measures, we don’t have many options, which is frustrating," a government official admitted.
The Japanese government, by contrast, planned the offensive carefully. Prime Minister Shinzo Abe told the Yomiuri Shimbun newspaper that his government is pursuing measures "according to WTO regulations."
One Japanese government official told the Asahi Shimbun that the materials were selected because the impact on Japan's economy would be minimal even if some Japanese exporters suffer.
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