South Korea has warned the United States of potential damages from Japanese “unwanted” restrictions on exports of high-tech materials to South Korea as a trade deal between US East Asian allies intensifies.
While South Korea sought US help in the dispute, caused by disagreement over the issue of compensation for North Koreans forced to work for Japanese firms during World War II, it also took steps to limit the damages to its companies.
South Korea’s ruling party announced that up to 300 billion won will be included in an additional budget to meet Japan’s export restrictions on the three crucial materials for advanced consumer electronics, accelerating the localization of their supply.
The ruling Democratic Party said around one-third of the proposed budget would be to support Korean Korean materials and equipment manufacturers to help them get their products on the market.
East Asian neighbors share a bitter story dating from the colonization of the Korean peninsula from 1910 to 1945.
Relations took a turn for the worse this week when Japan said it would tighten the export restrictions on the materials used to make chips and display panels because the belief in South Korea had been broken over the labor dispute.
Asia and Pacific economics chief S & P Global Rating said the dispute was as unpredictable as the US and China trade war and is likely to affect South Korea’s growth.
South Korean Foreign Minister Kang Kyung-wha told US Secretary of State Mike Pompeo in a phone call late Wednesday that Japan’s restrictions could not only hurt South Korean companies, but could also overwhelm the global supply chain and hurt US firms.
Kang’s Ministry in a Kang statement “expressed concern that this is undesirable in terms of friendly relations between South Korea and Japan and tripartite cooperation between South Korea, the US and Japan.”
She said South Korea hoped that Japan would pull the brakes and that the situation would not deteriorate further.
Pompey said he understood and they both agreed to strengthen the communication between the three sides, she said.
The State Department said both reaffirmed their commitment to the ultimate, fully verified North Korean denuclearization and the importance of tripartite cooperation between the United States, Japan and South Korea.
He said the US-South Korean alliance “remains the lynch of peace and security in the Korean Peninsula and the region.”
State Department spokeswoman Morgan Ortagus said Washington’s links to Japan and South Korea were some of the closest they had in the world and would do all they could to strengthen the relationship between “and between the three countries.”
However, analysts say that while Washington is dissatisfied with the South Korean and Japanese disputes, which also saw countries clashing at the World Trade Organization (WTO) this week, is unlikely to become an intermediary.
Kim Hyun-chong, deputy chief of the South Korean National Security Bureau, arrived in Washington on Wednesday and told reporters he would meet officials from the White House and Congress to discuss issues that included Japan’s export ban.
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A former Japanese ambassador to the United States, Ichiro Fujisaki, asked the need for US mediation.
Fujisaki told Reuters Wednesday, “I do not think we need the United States to mediate, just as Japan would not mediate US-Mexico ties or US-Canada relations.”
“This is an issue to be solved between Japan and South Korea.”
Japan’s export restraints follow its frustration over what South Korea’s failure to act in response to a court ruling last October, ordering Nippon Steel Corp. of Japan to compensate former employees of required.
Japan says the issue of forced labor was fully resolved in 1965 when neighbors re-established diplomatic relations.
US Assistant Secretary of State for East Asia and Pacific Affairs David Stilwell arrived in Japan on Thursday for the first ban on a 10-day visit to Asia.
He is also planning to visit South Korea next week, but he did not mention the dispute when he talked to reporters.
Sheila Smith, a senior associate for Japan’s studies at the Council on Foreign Relations, said it might be too early for Stilwell to assess what the United States can do to help.
“It’s likely to start with what I would call deep listening,” she said.
Shares in major Korean Korean companies grew for a third day on Thursday in expectations that Japanese export barriers could ease a shrinking supply of South Korean memory potato chips.