August 08, 2019 13:28
The Japanese Economy Ministry issued detailed regulations on Wednesday when it promulgated a bill removing Korea from a "whitelist" of preferential trade partners.
But the rules, effective late this month, specify no goods, contrary to expectations that they would single out high-tech materials and parts that are vital to Korean IT giants.
That means the widely publicized measure is as yet a procedural shot across Korea's bow rather than severely disrupting the supply chain.
But since curbs on specific items will now require no further Cabinet approval, the ministry can simply restrict their export to Korea any time it wants.
In a sense, the situation has become more uncertain because the ministry can arbitrarily restrict individual goods from one minute to the next.
Tokyo categorizes trading partners into four groups. The first-tier group now consisting of 26 countries is entitled to comprehensive approval for all exports once every three years.
But second-tier countries, which now include Korea, need approval in individual cases valid for six months. They must submit nine kinds of extensive documentation, and screening will take up to 90 days.
This raises the threat to Korean companies once specific goods are singled out.
Korea first gained preferential status in Japan in 2004.
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