Korea Demotes Japan from Preferential Trade Partner

  • By Ahn Joon-ho, Lee Min-seok

    August 13, 2019 10:07

    The government on Monday decided to remove Japan from a list of preferred trading partners in a tit-for-tat that risks disrupting vital supply chains.

    Trade Minister Sung Yun-mo in a po-faced announcement told reporters the measure was "part of revisions to Korea's export controls on strategic goods" rather than revenge for Japan doing the same earlier this month.

    The list used to contain all countries that have signed up to the Wassenaar Arrangement, a multilateral agreement on export controls on conventional weapons and sensitive dual-use goods and technologies. These are classed in the top tier, and the rest in the second tier.

    But instead of demoting Japan to the second tier, the government split the first tier into two. "It is difficult to maintain international cooperation with countries that fail to keep the basic principles of international export control systems or continue to act improperly," Sung said.

    Trade Minister Sung Yun-mo speaks at a press briefing at the government complex in Sejong City on Monday.

    Japan will face some restrictions and it will take longer for outbound shipments to be screened. But the government left open the possibility of future talks. "If the Japanese government wishes to hold negotiations during the opinion-gathering period, the Korean government is ready to respond any time at any place," Sung said.

    President Moon Jae-in in a meeting with his chief secretaries said, "Our response to Japan's economic retaliation must not be emotional." When Japan removed Korea from its whitelist last week Moon vowed to take tough measures and "never again lose to Japan," but he seems to have toned down his rhetoric since.

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