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South Korea to remove Japan from whitelist this week

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Minister of Trade, Industry and Energy Sung Yun-mo speaks during a press conference on Korea's revision to its export control scheme for strategic items at the ministry in Sejong in this Aug. 12 file photo. / Korea Times file
Minister of Trade, Industry and Energy Sung Yun-mo speaks during a press conference on Korea's revision to its export control scheme for strategic items at the ministry in Sejong in this Aug. 12 file photo. / Korea Times file

By Kwak Yeon-soo

Korea will remove Japan from its "whitelist" of preferred trading partners this week, the Ministry of Trade, Industry and Energy said Sunday.

The move comes after Tokyo removed Seoul from its whitelist Aug. 28 following its imposition of export restrictions on high-tech materials used in the manufacture of semiconductors and display panels.

The trade ministry said it has completed nearly all the procedures for Japan's removal for "running an export control system that fails to comply with international principles."

"We have finished gathering opinions through outside legal processes," a ministry official said. "The revision to Korea's export control system for strategic items will be announced sometime this week."

However, the ministry declined to specify the exact date.

The government decided on the removal Aug. 12, saying the neighboring country had violated international principles in managing its export control system.

Korea plans to classify its trading partners into three groups from the current two, placing Tokyo in the second group.

Currently Korea controls the export of strategic items by dividing destination countries into two.

Category A comprises 29 countries, which have joined all of the four major international export control regimes, whereas Category B is comprised of the remainder. Japan is currently in category A.

For countries in category A, the government gives preferential trade status such as minimal customs documentation and shorter examinations.

If the revision takes effect, Korea will create subcategories of A-1 and A-2, and place Japan solely into A-2.

An A-2 country will be subject to export control measures equivalent to Category B countries "in principle," and so exporters will not be allowed to get blanket permissions for the export of certain strategic items to Japan ― they will have to get permission for individual items ― according to the ministry.

Exporters shipping strategic goods to Japan will have to hand in five different documents to win individual approval, two more than the current three.

The approval process will also take around 15 days, significantly longer than the current five.

The trade ministry said it will not delay its whitelist removal even if Japan steps forward to negotiate over the ongoing trade dispute between the two countries.

It also downplayed concerns that the removal would negatively affect the World Trade Organization (WTO) complaint dispute

On Wednesday, Korea filed a complaint with the WTO against Japan, claiming that Tokyo's export curbs on key industrial materials to Seoul was a discriminatory, politically motivated act.

They were widely regarded as a retaliatory move after Korea's top court ordered Japanese companies to compensate Koreans forced to work for them in wartime.

"The complaint filed with the WTO is separate from the whitelist removal," the ministry official said. "If Japan files a counterclaim based on our latest move, we will act and seek solutions accordingly."

However, some expressed concerns that excluding Japan from the trade whitelist could adversely affect Seoul's position.

"Korea's removal of Japan from its whitelist can be viewed as a countermeasure against Japan, which can reinforce Japan's claim of a discretionary act," said Song Ki-ho, an attorney who specializes in international trade affairs.


Kwak Yeon-soo yeons.kwak@koreatimes.co.kr


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