PM calls for additional budget to counteract Japan's retaliation

By Lee Min-hyung

Prime Minister Lee Nak-yon urged the National Assembly, Tuesday, to pass the government's supplementary budget in order to free up funds to counteract Japan's recent imposition of export curbs on resources crucial for Korean semiconductor and IT companies.

“The need to foster the materials industry here has become more urgent amid Japan's economic retaliation,” Lee said earlier in a Cabinet meeting.

“We cannot delay the passage of the nation's extra budget bill any longer, as the political situation here and abroad continues to remain uncertain.”

Starting July 4, Japan tightened rules on the export to Korean firms of resource materials needed for the manufacture of semiconductors and display screens. The move was apparently in retaliation to a recent Supreme Court ruling here that ordered Japanese firms to compensate Koreans forced to work in their factories during Japan's colonial rule of Korea.

Despite calls from Seoul for negotiations on the thorny issue, Tokyo appears to be considering expanding the export restrictions.

To deal with this, relevant ministries here are forming special taskforces to come up with local measures while seeking support from the wider international community.

Foreign Minister Kang Kyung-wha said Tuesday that her ministry will continue to raise awareness of Japan's “unilateral action” on the global stage.

“We are seeking to minimize the impact of the retaliation by exchanging ideas from taskforces at relevant ministries,” Kang said in an Assembly session Tuesday. The Ministry of Trade, Industry and Energy and the foreign ministry are preparing to bring the case to the World Trade Organization (WTO), she added.

President Moon Jae-in will hold a conference with officials from 30 companies here today with Japan showing no signs of backing down on the trade feud.

Moon will hear opinions from business leaders and discuss measures to counter Tokyo's actions.

Ever since Japan announced the plan last week, the foreign ministry has urged its Japanese counterpart through official diplomatic channels to get the decision withdrawn. But Tokyo is showing little sign of compromise over the issue, only seeking to further intensify the retaliatory measures.

South Korea will file a complaint with the WTO's Council for Trade in Goods in Geneva, Wednesday (KST), in a meeting there attended by officials from the foreign and trade ministries.

Cheong Wa Dae said the WTO compl “unjust decision” by Japan across the globe.

“We expect this to help arouse public opinion abroad over the unfair Japanese measure,” a senior official from the presidential office said.

Paik Ji-ah, ambassador of the South Korean Mission in Geneva, will also participate in the WTO council meeting along with Jung Kyung-rok, director in charge of WTO affairs at the trade ministry.

South Korean tech companies Samsung Electronics and SK Hynix are most likely victims of Tokyo's actions at least in the short-term.

A judgment in cases brought to the WTO normally takes up to three years, so the best-case scenario for South Korea is to come to a settlement with Japan.

Trade Minister Sung Yoon-mo said Tuesday that Seoul and Tokyo will hold a meeting to discuss the matter this Friday.

“South Korea and Japan are arranging a working-level meeting to discuss the issue Friday afternoon in Tokyo,” Sung said in a media briefing.