August 14, 2019 08:11
Japan says it does not understand why it has been removed from Korea's list of trusted trade partners, the latest move in an escalating trade dispute between the Asian neighbors.
Seoul announced Monday that it had moved Tokyo to a new category that brings more restrictions on exports of sensitive goods. Trade Minister Sung Yun-mo said the new category was for countries that have managed their export controls in a way that violates international norms.
Japanese Trade Minister Hiroshige Seko said on Twitter Tuesday that Korea has not adequately explained how Japan does not conform to the global export standards.
The move is the latest in a back-and-forth trade dispute between the two countries which has included Japan dropping Korea from its own list of preferred trading partners.
Tokyo insists its trade decisions were motivated by national security concerns, while the moves are widely seen as retaliation for recent Korean court rulings ordering Japanese companies to compensate Koreans who were forced to work during Japan's colonial occupation of Korea.
A trade war between Japan and Korea, the world's third and 11th largest economies, respectively, would have wide-ranging ramifications. It could threaten global technology supply chains, since Korea produces 70 percent of the world's memory chips.
The change is due to go into effect in September. Once it does, Korean companies wanting to send sensitive goods to Japan will have to go through an approvals process that takes up to 15 days, up from about five days under the current system.
Japan's new policy begins Aug. 28 at which time Japanese companies will need to seek case-by-case approval from the country's trade ministry before shipping certain products to Korea.
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