Government withdraws Japan’s WTO complaint over ‘export restrictions’… Administrative notice of ‘white list restoration’

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Minister of Trade, Industry and Energy Lee Chang-yang briefs on the results of the 9th Korea-Japan Export Management Policy Dialogue at the press briefing room at The Prince Park Tower Hotel in Tokyo, Japan on the 16th. (Provided by the Ministry of Trade, Industry and Energy) 2023.3.16/News 1

The Japanese government lifted export restrictions on three key semiconductor items on the 23rd, and the Korean government withdrew its complaint to the WTO (World Trade Organization) accordingly. The South Korean government, which had excluded Japan from the white list (regions with preferential exports of strategic materials) due to its nature of responding to export restrictions, has also embarked on the process of including Japan back on the white list.

The Japanese government announced that it would lift export restrictions on three items (hydrogen fluoride, fluorinated polyimide, and photoresist) to Korea this afternoon. The Ministry of Trade, Industry and Energy also withdrew its WTO complaint at the same time and announced that it had made an administrative advance notice of an amendment to the strategic material import and export notice to include Japan on the white list.

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The Ministry of Trade, Industry and Energy amendment will be finalized after a 20-day administrative notice period from this day to April 12. When the amendment takes effect, when exporting strategic materials to Japan, the number of individual export permit documents will be reduced from 5 to 3, the comprehensive export permit documents will be reduced from 3 to 1, and the export permit examination period will be drastically shortened from 15 days to 5 days.

In October 2018, when the Korean Supreme Court issued a ruling on compensation for damages from forced labor against Japanese companies (Nippon Steel and Mitsubishi Heavy Industries), the Japanese government began retaliating against export restrictions.

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In July of the following year, starting with core materials related to semiconductor manufacturing, export regulations to Korea were strengthened. In August 2019, South Korea was also excluded from the list of preferential export screening countries (white countries).

In response, the Korean government also issued an administrative notice on the import and export of strategic materials on August 12, 2019, which excludes the Japanese government from the white list, and from September 18 of the same year, Japan was excluded from the list of preferential exporters of strategic materials. In the same month, it filed a lawsuit against Japan at the WTO, and the international dispute continued for over three years.

If the Ministry of Trade, Industry and Energy revision bill goes into effect on April 13 after an administrative notice, Japan will return to Korea’s white list in 1304 days.

The Ministry of Trade, Industry and Energy said, “We plan to discuss closely through Korea-Japan export management policy dialogue so that Japan’s country classification, that is, Korea’s return to the white country through the revision of the white list, can be achieved as soon as possible.”

The cold relationship between the two countries was confirmed by the Ministry of Foreign Affairs of Korea on the 6th, through the announcement of the ‘government’s position on the Supreme Court ruling on forced labor’, a total of 15 victims of forced labor (three survivors) ‘, it began to change rapidly by announcing that it planned to pay the judgment (100 million won or 150 million won per person) and delayed interest.

Subsequently, President Yoon Seok-yeol visited Japan and held a summit meeting after 12 years, creating a mood of reconciliation, and the two governments formed a consensus on lifting export restrictions and restoring the whitelist.

However, apart from joint measures to lift export restrictions and withdraw WTO complaints, some criticism of South Korea, a victim country, actively promoting whitelist restoration is considered a burden to the government.

It is likely that Japan will also go through the process of restoring the white list, but some point out that the Korean government does not need to take preemptive measures. In particular, as the victims’ resistance to the forced labor solution and the opposition party’s offensive continue, another battle is expected over the South Korean government’s preemptive reciprocal measures.

At a press conference the day before, Minister of Industry Lee Chang-yang said, “Recovering Japan on the white list is helpful to our export companies, and it is also a cause for Japan to respond by preemptively improving it.” We need to think about whether the approach of giving rice cakes is desirable in economic relations, and it seems too peripheral,” he said.

(Sejong = News 1)

Source: Donga

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