South Korea finance minister warns of possible countermeasures to Japan's export curbs

Newly manufactured vehicles await export at a port in Yokohama, Japan.
Newly manufactured vehicles await export at a port in Yokohama, Japan.PHOTO: REUTERS

SEOUL (REUTERS) - South Korea's economic policy chief warned on Thursday (July 4) of direct countermeasures against Japan if it keeps restrictions on exports of high-tech materials to its companies for a long time.

"Implementing corresponding measures against Japan cannot be ruled out because it will take a long time for the World Trade Organisation to produce a conclusion," Finance Minister Hong Nam-ki said on radio.

Amid a growing dispute over wartime forced labour between Tokyo and Seoul, Japan on Monday (July 1) announced stricter restrictions on exports of three materials used in South Korean chips and smartphone displays.

The tighter export controls, which take effect on Thursday, could slow the export process by several months, hitting South Korean tech giants such as Samsung Electronics Co, SK Hynix Inc and LG Display.  So far, South Korea has so far sought to settle the issue through the WTO.

In October, South Korea’s top court ruled that Japan’s Nippon Steel & Sumitomo Metal Corp must compensate four South Koreans for their forced labour during World War Two, a verdict Japan denounced as “unthinkable”.

Kyodo News Agency reported on Tuesday (July 2) that Japan was considering expanding its export controls to more items bound for South Korea.  On Thursday, South Korea’s finance minister said that if retaliation leads to further retaliation, there will be“unfortunate damage to both Korean and Japanese economies”.

Also on Thursday, the head of South Korea’s ruling Democratic Party, Lee Hae-chan said: “This fight is just in the beginning, not the end.”

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