S. Korea hits back at Tokyo on trade

It removes Japan from its preferred trade list in tit-for-tat move.

SEOUL, SOUTH KOREA — South Korea said Monday that it has decided to remove Japan from a list of nations receiving preferential treatment in trade in what was seen as a tit-for-tat move following Tokyo’s recent decision to downgrade Seoul’s trade status amid a diplomatic row.

It wasn’t immediately clear how South Korea’s tightened export controls would impact bilateral trade. Seoul said some South Korean companies exporting to Japan will be able to receive exceptions from case-by-case inspections that are normally applied on sensitive shipments to nations with lower trade status and go through the same fasttrack approval process that they currently enjoy.

Masahisa Sato, Japan’s vice minister for foreign affairs, said he believes the impact of Seoul’s move would likely be limited as Japan doesn’t import much sensitive materials from South Korea.

Japan provided similar exceptions while removing South Korea as a favored trade partner, which eased some of the fears in Seoul about a possible blow to its export-dependent economy, where many manufacturers heavily rely on parts and materials imported from Japan.

After spending weeks berating Tokyo for allegedly weaponizing trade and vowing retaliation, South Korean President Moon Jae-in struck a more conciliatory tone on Monday, saying that his government will refrain from “emotional” reactions to Japan over the trade dispute.

“While maintaining unwavering resolve and calmness, we need a

long-term approach to look for fundamental countermeasures,” Moon said in a meeting with senior aides.

South Korea’s trade minister, Sung Yun-mo, said Seoul decided to remove Japan from a 29-member “white list” of countries that enjoy minimum restrictions in trade because it has failed to uphold international principles while managing its export controls on sensitive materials. Sung and other South Korean officials did not specify what they saw as Tokyo’s problems in export controls.

Sato said South Korea would be violating World Trade Organization rules if it was retaliating against Japan’s earlier measures. Park Taesung, a South Korean trade official, said that South Korea is making a legitimate effort under domestic and international laws to improve its export controls.

South Korea currently divides its trade partners into two groups while managing the exports of sensitive materials that can be used both for civilian and military purposes. Seoul will create a new in-between bracket where it plans to place only Japan, which “in principle” will receive the same treatment as the non-favored nations in what’s now the second group, Sung said.

South Korea’s announcement c ame weeks after Japan’s Cabinet approved the removal from South Korea from a list of countries with preferential trade status, citing an erosion of trust and unspecified security concerns surrounding Seoul’s export controls.