Japan suffers more than Korea from trade feud

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By Lee Kyung-min

Japan's exports to Korea have dropped at a rate twice as fast as Seoul's shipments to Tokyo since the trade feud began in July, indicating the world's third-largest economy is suffering more, according to government data Sunday.

Data from the Ministry of Trade, Industry and Energy showed Korea's exports to Japan slid to $9.48 billion (1.1 trillion won) in the July-October period, down 7 percent from the previous year.

By contrast, Japan's exports to Korea fell to $15 billion (17 trillion won) in the same period, a 14 percent drop from the year before.

The data comes about four months after Japan restricted exports to Korea, July 4, of three key materials needed to produce semiconductors and displays ― photoresist, fluorinated polyimide and hydrogen fluoride.

Hydrogen fluoride includes etching gas and liquid hydrogen fluoride.

In the months following the measure, curbs on photoresist and etching gas were lifted in August.

The restrictions on fluorinated polyimide and liquid hydrogen fluoride were lifted in September and November, respectively.

No major disruptions were observed in Korea's chip and display industries as they were quick to find ways to substitute the key inputs.

LG Display was able to fully replace Japan-made hydrogen fluoride with that made in Korea in October, a move followed by Samsung Display which plans to use the domestically produced material upon the exhaustion of its current stockpiles.

Prompted by the unexpected row, the government and the public at large was able to understand the consequences of relying too heavily on Japan and sought ways to become more self-reliant in the long term.

In October, Finance Minister Hong Nam-ki called for full legal, policy, tax and financial support from both the private and public sectors to help boost competitiveness of the local parts, materials and equipment businesses.

Industry ministry has allocated over 1.2 trillion won to foster the three businesses in 2020, nearly double from 669 billion won 2019.

Korea and Japan plan to hold high-level talks today in Tokyo to resume discussions on export control systems.