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| President Moon Jae-in speaks during a meeting with business leaders at Cheong Wa Dae, Wednesday. Yonhap |
By Do Je-hae
President Moon Jae-in warned Japan, Wednesday, not to aggravate a bilateral trade row by making unfounded claims against Korea, and underlined the need for a diplomatic solution in the aftermath of export regulations imposed by Tokyo that are feared to damage the nation's IT sector.
Moon underlined once again that the decision was politically motivated. "Carrying out measures to hurt Korea's economy and linking them to sanctions against North Korea without any grounds are not at all desirable for friendship and security cooperation between the two countries," he said at the start of a meeting with top executives of the country's leading conglomerates.
"They are not beneficial for the two economies and will certainly have a negative impact on the global economy."
The business leaders in attendance included Hyundai Motor Executive Vice Chairman Chung Euisun, SK Chairman Chey Tae-won and LG Chairman Koo Gwang-mo. But Samsung Vice Chairman Lee Jae-yong and Lotte Chairman Shin Dong-bin were absent, as both were in Japan.
At the meeting, President Moon urged the business leaders to view the situation as an opportunity to "upgrade" the Korean economy, presidential spokeswoman Ko Min-jung told reporters in a briefing.
It is the second time this week for Moon to openly criticize Japan amid the intensifying bilateral conflict escalated by Tokyo's tightened export regulations on some high-tech resource materials used by Korean firms to manufacture semiconductors and screens for mobile devices. Underlining that the trade row could go on for an extended period, the President called on Tokyo not to head toward a "dead end," calling instead for negotiations.
"The government is resolved to extract a cancellation of the export curbs and come up with countermeasures," President Moon said. "Above all, the government is doing its utmost for a diplomatic solution. We hope Japan will respond positively."
Reports said Japan is considering additional trade retaliation, such as import controls on Korean agricultural products. Prime Minister Shinzo Abe has even mentioned North Korean sanctions as the background for imposing stricter export regulations on South Korea. A presidential aide refuted Abe's claim that Seoul has not strictly observed the sanctions against the North.
Moon called the current situation an "unprecedented emergency" and urged for active countermeasures from the business community for a more fundamental approach to dealing with the trade conflict, which has underlined the urgent need for Korea to reduce its heavy dependence on foreign-sourced materials.
"Regardless of how the current situation ends, we should use it as an occasion to significantly expand the localization of core technologies, material and equipment," Moon said. "In particular, we must fix our industrial structure which relies heavily on a certain country."
The President added that he will drastically increase the necessary budget and mobilize all possible resources, such as providing tax and financial support to help the domestic economy develop to a new level, by facilitating joint technology development among major companies to reduce their reliance on foreign countries for component sourcing.
Moon's meeting with business leaders was arranged to share the difficulties expected from Tokyo's export controls, and to exchange candid views on possible measures to tackle the issue, a presidential aide told reporters in a separate briefing.
Participants in the meeting consisted of representatives from companies with total assets of more than 10 trillion won ($8.5 billion). Thirty companies and four economy-related institutions attended the meeting, which lasted almost two hours.
