Moon acts to manage trade spat with Japan

By Do Je-hae

Tackling a new trade row with Japan is emerging as one of the most urgent tasks for President Moon Jae-in, after Japan tightened export regulations on three high-tech materials used in Korean manufacturers' display panels and memory chips.

President Moon is expected to lead the countermeasures against Japan's new trade offensive with a meeting with the nation's business leaders on July 10.

During the meeting, Moon is expected to exchange views with 30 business tycoons on the difficulties faced by local producers of semiconductors and memory chips as well as responses to Tokyo's export controls and support measures, such as reducing the materials sector's reliance on imports, presidential aides said, Sunday.

Seoul said earlier it would consider filing a complaint with the World Trade Organization (WTO). The upcoming meeting comes amid rising criticisms against Cheong Wa Dae that is it not doing enough to deal with the trade row with Japan.

Following Japan's announcement on July 1, the presidential office has reacted in a subdued manner, urging the media to refer to the measures being announced by relevant ministries. “We will refrain from making official comments, and in the meantime, we will come up with ways to minimize the effects of the regulatory measures,” a presidential aide said.

This has led to questions from reporters about what Cheong Wa Dae is doing regarding the trade row. Since then, Moon's senior presidential aides and senior government officials have been increasingly talking with industry leaders.

“Finance Minister Hong Nam-ki and presidential chief of staff for policy Kim Sang-jo had a meeting with executives of major companies and talked over pertinent issues with them. They also exchanged candid views over growing external economic uncertainties and agreed to communicate openly,” Cheong Wa Dae spokesperson Ko Min-jung said in a text message to reporters, Sunday afternoon.

Hyundai Motor Group Executive Vice Chairman Chung Euisun, SK Group Chairman Chey Tae-won and LG Group Chairman Koo Kwang-mo attended the meeting. Details of the meeting were not released.

Given the importance of semiconductors and displays in Korea's export sector, Tokyo's move is feared to damage Korea's national economy by undermining the export volume and affecting the growth rate in the long run. Semiconductors take up about 20 percent of Korea's total exports and generate 6 percent of the nation's total GDP as of last year. Japan's export curbs are expected to aggravate Korea's economic slump.

Opposition parties have blamed the Moon administration for its failure to act early. “Japan has signaled the retaliatory measures since October 2018,” said Hwang Kyo-ahn, chairman of the official opposition Liberty Korea Party.

Seoul views the export restrictions as Tokyo's retaliation for a longstanding diplomatic conflict triggered by the two countries' differences over compensation for wartime forced labor. In addition to this, Seoul has just dissolved a foundation established during the previous Park Geun-hye administration to provide aid for the elderly Korean victims of Japan's sexual slavery during World War II. The foundation, funded by Tokyo, was the outcome of a 2015 bilateral agreement reached between Moon's predecessor and Japanese Prime Minister Shinzo Abe. Tokyo said closing the foundation violates the agreement.

Protesters hold signs in opposition to Tokyo's export curts in front of the Japanese Embassy in central Seoul on July 5. Yonhap

Given the mounting complexities between the two countries, it is becoming increasingly uncertain to realize a Korea-Japan summit, considered to be a crucial impetus to mend fractured bilateral ties. The two leaders did not hold a summit during the sidelines of the June 28-29 G20 summit in Osaka.

Korean Ambassador to Japan Nam Gwan-pyo visited a newspaper in Tokyo last week and reportedly mentioned that Seoul will continue to push for a Korea-Japan summit. Cheong Wa Dae has not made any mention of a summit with Abe following Tokyo's announcement last week of the export restrictions.