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| Japanese Prime Minister Shinzo Abe speaks during a press conference in Hiroshima, western Japan, Tuesday. AP-Yonhap |
By Nam Hyun-woo
Japan appears to be refraining from expanding its trade war with South Korea, as it decided Wednesday not to add new materials to the list of exports to Korea it controls, according to industry analysts and government officials. On July 4, Japan strengthened control on the exports of photoresist, hydrogen fluoride and fluorinated polyimide to Korea as its first round of trade restrictions. Last Friday, it removed Seoul from its "whitelist" of countries receiving preferential trade status.
The analysts said Tokyo is slowing down its trade tantrums after unleashing two major export restrictions on Korea within a month, but it is too early to say the tension between the two countries has been alleviated, because Japan is still committed to its economic retaliation against Korea.
Japan's Ministry of Economy, Trade and Industry announced a revision of its export trade control law and detailed enforcement rules, but did not specify which items would be under stronger control.
The enforcement rules are a follow-up to Japan's decision to remove Korea from the whitelist last week. The Korean government anticipated its exclusion from Japan's whitelist may affect Japanese firms' export of nearly 1,200 items, and the enforcement rules were expected to provide information on which of those items will be required to get "individual licenses" from the Japanese government.
According to Japan's trade ministry, individual licenses require transaction-based examination, meaning authorities will check the content of export for each transaction. On the contrary, it gives a "bulk license" to exporters so they don't need to be inspected for each transaction when they ship products to whitelist countries.
As Tokyo did not specify items in the enforcement rules, no items are currently required to receive individual licenses, except for three materials for making semiconductors which were placed under restrictions on July 4.
With the whitelist exclusion, Japan prohibited bulk licenses on exports to Korea, but it allowed Japanese companies having International Compliance Program (ICP) certification, a type of license given to firms abiding by export control laws and regulations, to maintain their bulk licenses even if they ship items to Korea.
There are 1,300 Japanese firms having ICPs, and Tokyo's fresh revision did not change the rules regarding ICP companies.
"Japan appears to be slowing down on imposing additional export restrictions," said Mun Byung-ki, senior researcher at the Institute for International Trade at the Korea International Trade Association.
"If Japan specifies items, it means a direct confrontation between the two countries, which is also a burden for Japan too, given concerns over economic impact are growing within and outside of Japan," Mun said. "Though it is hard to say the trade tension has been alleviated, it seems Japan is being more prudent on strengthening export restrictions."
An official at Korea's Ministry of Trade, Industry and Energy also said, "It is hard to say that Japan has gave up expanding its trade war with Korea; further monitoring is required."
