Japan approves more key exports to South Korea

SEOUL • Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export curbs last month, two sources said, ahead of talks by government officials today to resolve a dispute stemming from their wartime past.

Relations between the two US allies worsened late last year when a South Korean court ordered Japanese companies to compensate South Koreans who were conscripted as forced labourers during World War II.

Early last month, Japan tightened controls on shipments to South Korea of three materials used in chips and displays, threatening to disrupt the global tech supply chain. Japan also announced a plan to remove South Korea's fast-track export status from later this month.

Sources yesterday said the material cleared for Japan's exports to Samsung Electronics is photoresists, which is crucial for the South Korean tech giant's advanced contract chipmaking production.

An official at South Korea's presidential office confirmed the exports at a briefing, but said that "uncertainties" will remain until Japan completely removes the tighter export controls it has instituted.

Earlier this month, Japan gave the green light to the export of photoresists to Samsung for the first time since it imposed the restrictions on July 4.

Permission also has to be obtained for each contract to export fluorine polyimide, and hydrogen fluoride (etching gas) to South Korea.

Samsung shares rose 1.95 per cent yesterday, leading the wider market's gain of 1.05 per cent.

Tokyo's latest move comes ahead of a meeting between Japanese Foreign Minister Taro Kono and his South Korean counterpart Kang Kyung-wha in Beijing today.

"This is a signal that Japan would not further escalate tensions. This is positive in that it creates an atmosphere for talks," international studies professor Ahn Duk-geun at Seoul National University said. But he added that he does not expect a breakthrough in the stalemate, citing wide differences over how to resolve the forced labour issue between the two neighbouring countries.

 
 

Ms Kang said at a Seoul airport yesterday before leaving for Beijing: "We will have to actively express our position, but it is a very difficult (situation)."

Separately, South Korean President Moon Jae-in has pledged to nurture the local carbon fibre industry, as part of efforts to reduce dependence on Japan imports for high-tech materials.

Japanese companies broadly support Prime Minister Shinzo Abe's tough trade stance against South Korea, a Reuters poll has found. Three-quarters of companies in the monthly survey approved of Mr Abe's explanations for curbing exports to South Korea of materials used to make computer chips.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on August 21, 2019, with the headline 'Japan approves more key exports to S. Korea'. Print Edition | Subscribe