South Korea to Remove Japan From Preferred Trade List

August 12, 2019 Updated: August 12, 2019

SEOUL, South Korea—South Korea said Aug. 12 that it has decided to remove Japan from a list of nations receiving preferential treatment amid a diplomatic row.

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

South Korean Trade Minister Sung Yun-mo said the government decided to remove Japan from the country’s 29-country “white list” 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 Japan’s problems in export controls. They say that Seoul will work to minimize negative impact on South Korean exporters and bilateral trade.

Sung said the changes are expected to enter effect sometime in September, following a 20-day period for gathering public opinion on the issue and further regulatory and legislative reviews. He said Seoul is willing to accept any request by Tokyo for consultation over the issue during the opinion-gathering period.

South Korea’s announcement came weeks after Japan’s Cabinet approved the removal from South Korea from a list of countries with preferential trade status. Seoul had vowed retaliation while accusing Tokyo of weaponizing trade to retaliate over political rows stemming from their wartime history.

Japan’s move came weeks after it imposed stricter controls on certain technology exports to South Korean companies that rely on Japanese materials to produce semiconductors and displays for TVs and smartphones, which are key South Korean export items.

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