INTERNATIONAL > East Asia & Pacific
Japan firms back export curbs amid stalemate with S. Korea
- July 3, 2019
, Jiji Press , 3:32 p.m.
- English Press
Tokyo, July 3 (Jiji Press) — Japanese business leaders have shown a certain level of support for the government’s planned strengthening of regulations of semiconductor material exports to South Korea as an attempt to break a diplomatic deadlock over the issue of wartime labor.
They believe that the South Korean side will in due course soften its stance over wartime labor, as the export controls are expected to deal a big blow to the country’s economy.
But the measure could trigger tit-for-tat retaliation, similar to moves between the United States and China, as bilateral friction cannot be resolved solely on the basis of trade economics, as has been proved by the world’s two largest economies.
“I want (South Korea) to take seriously the Japanese government’s message that bilateral trust has been significantly shaken, and I want (the bilateral ties) to get back to a normal state soon,” Kengo Sakurada, chairman of the Japan Association of Corporate Executives, or Keizai Doyukai, told a press conference on Tuesday.
Japanese businesses share the view with the government that the issue of wartime labor was resolved under a 1965 bilateral pact concluded when the two countries normalized their diplomatic relations.
Frustration is smoldering at Japanese companies as the South Korean side has made no responses to Japan’s repeated requests to resolve the issue through international arbitration.
With semiconductor materials essential to producing smartphones and other mainstay products of South Korea, expectations that the export regulations will trigger action by Seoul on the wartime labor dispute have apparently led Japanese businesses to back the government measure.
But Seoul has maintained a confrontational stance, saying it will take necessary steps including filing a complaint with the World Trade Organization.
Annual trade between Japan and South Korea totals nearly 10 trillion yen.
Ties between private companies in the two countries are strengthening, with Japanese and South Korean firms jointly winning a liquefied natural gas plant order in a third country.
The size of the impact a possible trade war could have on the economies of the two countries is unpredictable.
Worsening bilateral ties are already taking a toll on bilateral economic exchanges, with the Japan-Korea Business Conference, a meeting of business leaders from the two countries slated to be held in Seoul in May, postponed to the second half of the year.
Cancellation of the meeting for the first time since the conference was launched in 1969 could lead to a further deterioration in bilateral economic ties, experts warned.