Japan restores South Korea to export 'whitelist' after 4 years

Japan’s Ministry of Economy, Trade and Industry announced Tuesday it has decided to redesignate Korea as a Group A country or put it on its "white list," which would give Seoul the preferential export treatment it had enjoyed before 2019.

“The Republic of Korea will be added to the countries listed in Appended Table 3 of the Export Order,” Japan’s METI said in a release, announcing the result of the Cabinet meeting held earlier in the day.

The Japanese government decided to partially revise the Export Trade Control Order based on the Foreign Exchange and Foreign Trade Act to add Korea to the white list, according to the Japanese ministry.

After being promulgated Friday, the amendment will be enforced from July 21.

The latest measure would reduce the time and procedures Japanese companies would have to take to export strategic materials to Korea, from the current two to three months to about a week.

Japan requires a license application for its companies to export overseas even if the export item is not on the list of controlled items if there is a risk that the item can be used for the development of weapons of mass destruction or conventional weapons.

Redesignating Korea into its list of trading trusted partners, it would mean Japanese companies would get blanket licences for exporting to Korea.

Tokyo downgraded Seoul to Group B in 2019 after imposing export controls on three key semiconductor materials to Korea -- fluorine polyimide, photoresist and hydrogen fluoride -- in apparent retaliation against Korean court rulings in the previous year. Seoul’s top court ordered two Japanese companies to pay compensation to Korean victims of forced labour during Japan's 1910-45 colonial rule of the Korean Peninsula.

Facing the trade restrictions, Seoul had also removed Tokyo from its white list and also filed a complaint with the World Trade Organization against the export curbs.

The frayed economic ties had weakened trade between the two countries.

The talks for recovery in relations ignited in 2022, when the Yoon Suk Yeol administration took over in May 2022. Yoon travelled to Tokyo for a summit with Japanese Prime Minister Fumio Kishida in March this year and reinstated Japan's status the following month.

After the summit, Japan lifted restrictions on exports of key semiconductor materials to Korea. Korea in turn withdrew its complaint filed with the World Trade Organization against the export curbs.

After vowing for joint efforts to recover their frayed ties in their first summit, the two leaders met again in Seoul in May to reaffirm their resolve and agree on industrial cooperation in various sectors including semiconductors, materials, parts and equipment.

Korea's Ministry of Trade, Industry and Energy welcomed Japan's decision and said it will closely work with Tokyo on increasing bilateral and multilateral trade opportunities.

"The president travelled to Tokyo in March to lay the ground for the two countries to improve bilateral trust. And with our preemptive action to reinstate Japan on our white list, and the in-depth discussions with Japan's Trade Ministry, we have fully recovered bilateral trust in trade," Seoul's Trade Ministry said.

Eyes are on what impacts the recovery in trade relations with Japan, which accounts for about 5 % of Korea's export volume, would bring to Korea, which has run a trade deficit for 15 consecutive months.

According to a Korean Chamber of Commerce and Industry report released in March, Korea is expected to see an increase of $2.69 billion in exports to Japan when it recovers to the levels in 2017 and 2018 -- before Japan introduced the export curbs.

Meanwhile, Finance Minister Choo Kyung-ho will meet his Japanese counterpart on Thursday to discuss cooperation in finance and trade.

Jo He-rim

The Korea Herald

Asia News Network