South Korea urges Japan to scrap export curbs, pledges help to firms

Officials from South Korea's semiconductor industry attend an emergency meeting on Japan's restrictions on exports to South Korea.
Officials from South Korea's semiconductor industry attend an emergency meeting on Japan's restrictions on exports to South Korea.PHOTO: DPA

SEOUL (REUTERS, BLOOMBERG) - South Korea on Monday (July 8) repeated a demand for Japan to withdraw tightened curbs imposed last week on exports of materials for making chips and smartphone displays, and pledged to help affected domestic companies.  

“Japan’s export restrictions should be withdrawn,” Finance Minister Hong Nam-ki said at a regular meeting of government ministers in charge of external economic affairs.

He said the government would help to minimise the damage on South Korean companies from the curbs that Japan imposed amid a diplomatic row over forced wartime labour..

On Sunday, Mr Hong held discussions on the "external economic situation" with the heads of the top domestic companies, President Moon Jae-in's office said in a statement, as the country's tech sector braces for Japan's export restrictions.

The discussion was focused on the "external situation of the economy and its uncertainties," Blue House spokeswoman Ko Min-jung said in a text message.

She did not elaborate on the details of the talks between the government officials and the business leaders.

President Moon's chief policy secretary Kim Sang-jo also attended the meeting but she didn't specify which business leaders were present.

Local paper DongA Ilbo reported last Friday that Mr Hong and Mr Kim had planned to meet top executives such as Chung Eui-sun of Hyundai Motor Group, SK's Chey Tae-won and LG's Koo Kwang-mo.

Yonhap News reported that President Moon will meet the business leaders on July 10. The series of meetings come as Japan imposed restrictions on South Korean exports of products needed to make semiconductors and computer display. The restrictions kicked in on July 4.

Japanese Prime Minister Shinzo Abe denied that a decision to impose export controls was a countermeasure against issues involving a wartime dispute.

South Korean courts ruled that Japanese companies must compensate Koreans conscripted to work in factories and mines during the 1910-45 colonization. Japan holds that all claims were settled.

The Seoul Metropolitan Government will provide emergency funds to domestic companies affected by Japan’s export restrictions on South Korea’s crucial tech industry, Yonhap News reports, citing Cho In-dong, an economic policy officer at the city’s office.

The office will disburse 10 billion won (S$12 million) in funds with an interest rate of 1.5 per cent  to support small and medium enterprises in the sector, Yonhap reported on Sunday.

These companies will also be able to report to authorities on the damages incurred to their businesses following the export curb measures on products needed to make semiconductors and computer displays, the news agency said. 

Officials with the city’s office couldn’t be immediately reached for comment.