By Satoshi Sugiyama, staff writer
It is almost two months since the trade ministry announced tighter export control measures on South Korea — stricter screenings on a wide range of materials, including three key chemicals, and a trade status downgrade — aggravating bilateral relations.
Despite speculation, the impact the steps are having on both the South Korean and Japanese economies remains unclear, even with Japan’s release of related trade statistics on Thursday.
According to the Finance Ministry, hydrogen fluoride exports to South Korea fell 83.7 percent in volume from June, with 479 tons exported in July, and fell 82.4 percent year on year.
Hydrogen fluoride is one of the three chemicals — along with photoresist and fluorinated polyimide — tighter controls were applied to in July over national security concerns. Some exports of the materials were approved about a month later.
A Finance Ministry official said it does not have accurate statistics for the other two chemicals. Both government officials and experts couldn’t definitively confirm whether the decrease is directly attributable to the export controls. Even if they did contribute to the dip, it may be temporary and the number could bounce back in subsequent months, said Junichi Sugawara, a senior research officer at Mizuho Research Institute who specializes in trade policy.
“It is conceivable that there may be some initial confusion that has affected the number,” he said. “There might have been several companies that needed to obtain licenses to export to South Korea, or there might have been cases where companies were taking stock of the situation to determine what to do in the future.”
Sugawara said the export controls might have had a temporary effect, but that might have also just been a fluctuation in demand and supply. Exports of the chemical to Taiwan were up 42.8 percent in July compared with June, whereas those to Indonesia sank by 95.3 percent.
The South Korean government asserts Japan is weaponizing trade to undermine its economy due to historical grievances, increasing the rift in bilateral relations. As Japanese companies dominate production of the affected materials, which are critical to the semiconductor manufacturing process, the controls are troubling for Seoul, where the industry plays a major role in its economy.