Korea threatens retaliation over Japan export row 
2019-07-05
South Korea said yesterday it may retaliate against Japan’s latest export limits on high-tech materials, as a row over forced wartime labor threatened to disrupt global supplies of memory chips and smartphones.
Samsung Electronics Co and SK Hynix Inc, the world’s top memory chipmakers and suppliers to Apple and Huawei Technologies, could face delays if the measures that took effect yesterday drag on.
“Implementing corresponding measures against Japan cannot be ruled out,” South Korea’s Finance Minister Hong Nam-ki told South Korea radio. He said the trade row could cause “unfortunate damage to both Korean and Japanese economies.”
The dispute is the latest flashpoint in a quarrel over South Korean efforts to seek compensation for Japan’s use of forced wartime labor, which got fresh impetus from South Korean court rulings last year.
The curbs on exports of three materials used in South Korean chips and smartphone displays, which Japan had announced on Monday, will disrupt the global supply chain, South Korea’s Trade Minister Yoo Myung-hee said.
Japan accounts for 70 to 90 percent of the production of the three materials, Japanese media said, making it difficult for South Korean chipmakers to find alternative sources of supply.
“It will pose a huge uncertainty and threat to the global economy by shaking up the global supply chain,” the trade minister said.
South Korea’s presidential office said that it plans to actively seek diplomatic countermeasures, including complaining to the World Trade Organization against the “retaliatory” export curbs.
“We will explain to major countries about the unfairness of Japan’s action and the fact that this violates the principle of free trade,” Yoon Do-han, South Korea’s press secretary to the president, said in a statement.
Hong had said it would take a long time to get a WTO ruling on the dispute.
The row exploded late last year when South Korean court rulings ordered Japan’s Nippon Steel & Sumitomo Metal Corp and Mitsubishi Heavy Industries Ltd to pay hundreds of thousands of dollars to South Korean plaintiffs.
Japan denounced the court verdicts as “unthinkable.”
The two countries share a bitter history that includes Japan’s 1910-45 colonization of the Korean Peninsula and the use of comfort women, Japan’s euphemism for girls and women, many of whom are Korean and were forced to work in its wartime brothels.
Both sides showed no signs of backing down in the trade dispute. Kyodo News Agency reported on Tuesday that Japan was considering expanding its export controls to more items bound for South Korea.
The leader of South Korea’s ruling Democratic Party Lee Hae-chan said: “This fight is just in the beginning, not the end.”
The items affected by Japan’s curbs include photoresists and hydrogen fluoride, both essential materials in the chipmaking process at Samsung and SK Hynix.
