Japan and South Korea, two major U.S. allies, are again at odds, this time over Tokyo's decision to tighten controls on exports of sensitive materials that are mainly used in computer chips and display screens used in TVs and smartphones. The tensions reflect animosities that have persisted for decades.
WHAT JAPAN SAYS: As of July 4, the Japanese government tightened the approval process for shipments of photoresists and other sensitive materials. They are now subject to a case-by-case approval process that can take up to 90 days because Japan's trade ministry said the countries' "relationship of trust," including export controls, had been "significantly undermined." It also said it had found some sensitive items were shipped to South Korea "with inadequate management by companies." Earlier, Japanese Prime Minister Shinzo Abe and other officials cited South Korea's stance on compensation for forcing Koreans to work as laborers before and during World War II as a sign it could not be trusted. Officials continue to hint at problems without providing specifics. Prime Minister Shinzo Abe and his conservative aides have hinted at possible South Korean illegal transfers of sensitive materials to North Korea, and they now say South Korea has failed to respond to requests for talks about problems with export controls.
WHAT SOUTH KOREA SAYS: In Seoul, President Moon Jae-in on Wednesday said his government was committed to resolving the matter diplomatically and urged Japan to refrain from pushing the situation to a "dead-end street." He spoke after South Korean officials urged Japan to drop the plan to further tighten export controls on fluorinated polyimide, resist, and hydrogen fluoride and related technologies, telling a World Trade Organization meeting in Geneva that the Japanese measures would affect electronics products worldwide. South Korean officials say controls on chemicals subject to the tightened rules have not been violated.
THE BACKDROP: Japan and South Korea, both important hosts for U.S. military bases in East Asia, have been bickering for years over a territorial dispute and over South Korean demands for more contrition and compensation from Japan for its use of forced labor and recruitment of Korean women for military brothels during the Japanese occupation of the Korean peninsula in the early 20th century. The two sides squabbled in December over a South Korean warship's alleged radar lock on to a Japanese patrol aircraft. That raised suspicions in Japan because a North Korean boat was next to the South Korean warship at the time. The latest flare-up followed South Korean court rulings ordering major Japanese corporation Nippon Steel & Sumitomo Metal Corp. to compensate South Korean plaintiffs for forced labor during World War II. Mitsubishi Heavy Industries has refused a South Korean Supreme Court order to compensate 10 Koreans for forced labor. Japan insists all compensation issues were settled when the two countries normalized relations under the 1965 treaty. Japan says South Korea is violating an international pledge.
IMMEDIATE IMPLICATIONS OF JAPAN'S TIGHTER CONTROLS: Japan is a major supplier of materials used to make the computer chips that run most devices, including Apple iPhones and laptop computers. Analysts say that given a slowdown in demand for smartphones and for semiconductors overall, South Korean chipmakers Samsung Electronics and SK Hynix both have sufficient supplies of the materials for now. The greater fear is that Japan might expand the export controls to more products, increasing the potential for disruptions to regional and global supply chains.
UNANSWERED QUESTIONS: Japanese officials have not specified which companies they suspect of having mismanaged exports of sensitive materials. South Korea's trade ministry acknowledged Wednesday that from 2015 to March 2019 the government detected 156 cases of unauthorized exports of sensitive materials that could be used for military purposes. It was responding to a report by the Japanese network Fuji TV that citRead More