politics

S Korea says Japan's high-tech export curbs threat to global economy

41 Comments
By Ju-min Park

South Korea's trade minister said on Thursday Japanese export limits on high-tech materials bound for Seoul would pose a "huge threat" to the global economy and disrupt the global supply chain.

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

The restrictions take effect on Thursday and could slow the export process by several months, affecting South Korean tech giants such as Samsung Electronics Co, SK Hynix Inc and LG Display.

Trade Minister Yoo Myung-hee called for the withdrawal of Japan's latest measures and bilateral talks to discuss the broader issue of export controls, the trade ministry said in a statement.

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South Korea's trade minister said on Thursday Japanese export limits on high-tech materials bound for Seoul would pose a "huge threat" to the global economy and disrupt the global supply chain

Which was brought by the SK themselves by not abiding a binding international treaty between the two countries.

Any loss should be billed to SK.

17 ( +18 / -1 )

The beginnings of an export embargo, all through the political ineptitude of President Moon Jae-in.

President Moon Jae-in government failure to respect a Treaty on Basic Relations between Japan and the Republic of Korea signed June 22, 1965, the consequences of which will soon be realised when or if a import embargo follows, along with punitive currency economic financial restrictions

There is no circumventing international treaty law by political use of ones countries domestic judiciary.

There is full recourse contained within the 1965 treaty dispute tribunal procedure.

Trade Minister Yoo Myung-hee best question the tactics and logic behind the political agenda adopted by President Moon Jae-in privately, before the relationship deteriorates into strategic diplomatic business protection which would lead to asset seizures and worse.

13 ( +13 / -0 )

Have a cry SK. Until the whole nation apologises sincerely and pays exorbitant compensation for breaking an international agreement against international law, these sanctions will stay and be tightened every year.

13 ( +13 / -0 )

This will be a huge hit for Samsung, the pride and joy of South Korea. They have grown to become the second largest chip manufacturer in world behind only Intel. They are also the largest smartphone display manufacturer.

13 ( +13 / -0 )

S Korea seems to panic too much about these hi tech materials. S Korea just make them by themselves. Most of kinda hi tech materials/goods are made by unknown smaller industries in Japan.

2 ( +2 / -0 )

"Trade Minister Yoo Myung-hee called for the withdrawal of Japan's latest measures and bilateral talks to discuss the broader issue of export controls......"

So, now SK wants to talk!!

"At the governmental level, Japan's initial efforts to solve the dispute of seized company assets through bilateral consultations failed after South Korea did not respond.

Japan then proposed in May to set up a third-country arbitration panel under the 1965 accord, but South Korea let the deadline for selecting a panel member pass."

What has SK been doing the past few months?? Japan is sick of your games!!

Compensation and soft loans were already given to SK in the 1965 treaty. According to SK records released a few years ago, Japan had proposed to include compensation to the victims during the early setup of the treaty, but SK refused and said that they would take care of it. The money is taken and used for infrastructure and building the economy of SK.

Any talk of compensation now about wartime forced labour should be followed up with the SK government!!

11 ( +13 / -2 )

@WiseOnInKansai

Most large companies import smaller parts from either local or foreign companies. Japan is simply hitting Korea’s cash cow but affecting their supplier.

However, this move will also hurt those suppliers in Japan. Samsung will most likely find new suppliers.

-10 ( +1 / -11 )

It's no way. Japanese government should do something against some diplomatic offense.

3 ( +4 / -1 )

hahah go pound sand.  ther are plenty of Chinese and Taiwan companies opening champagne now, more business yay

they are lucky Japan isn't completely choking them to death by blocking the fabricating and foundry toolchains as well, for now.

2 ( +2 / -0 )

South Korea, honestly, I don't care! I already buy only Chinese brands, because they became better than your Samsung crap. Don't act like if the consumers don't have alternatives, and don't act like if the whole world has been hurt by this fact. It's not even an export ban, plus you already said you can make the same material, so which is the problem? Take it easy! Such a drama Queen for nothing! China is so BETTER as a partner in Asia for Japan, seriously.

7 ( +8 / -1 )

@Amir: yeah, Samsung can find new suppliers, and Japanese companies can find new clients. So, which is the problem? It's just a way for Japan to say "stop" to South Korea attempts to milk cash with the excuse of a military occupation happened almost one century ago. It's an action more symbolic than economic.

9 ( +9 / -0 )

It is just a threat of Kamikaze attack Abe thought out for winning elections. If Abe indeed wants to implement any suicidal but effective measure for damaging S. Korean economy, he needs legislation approved by the National Diet. Although it is merely a fake attack for propaganda, Abe hopes it boosts anti-Korean sentiment for the election, and indeed it seems worked so far.

Whether it will end with a silly feint or any effective measure, Japan is already loosing her credibility as supplier. Abe will get vote in the short term, but Japanese companies will lose their customers in the long-term. And I am sure Abe will not and can not compensate the companies for the loss, while many naive Japanese still believe enormous damages were done to S. Korea, which we can witness in the above comments here just in hours after the feint attack started on July 4, the election day.

-3 ( +1 / -4 )

South Korea is mainly a mercantile economy. When you're a poor, densely populated country with few natural resources, goodwill with trading partners can make a major difference in your economic fortunes. Koreans might have legitimate historic complaints, but going after the assets of Japanese companies that they invited to establish offices and factories in their country is self destructive. It occurred to me that it would actually be cheaper for S. Korea to tax its own citizens to compensate the comfort women or slave laborers than the losses entailed from a trade war with Japan.

5 ( +5 / -0 )

As usual, Japan is just being petty. They've had many automobile industry wrangles with the US and Canada , which were arbitrated in the world court. They are borrowing a leaf from Tramp who's had his Damascus moment on China and Huawei. Trade wars are painful to ALL parties.

-9 ( +0 / -9 )

I, sometimes, oh not, very often, think SK politicians are incredibly, yes, helpless and foolish.

How about you ?

4 ( +5 / -1 )

Government can not meddle in any civil dispute.

Aughh, Nope.

SK had did a similar stunt in the US, a third party nation, arguing basically the same thing in hopes of making it a major international incident, only to be thrown out by the court stating it is a international diplomatic issue that the court can not be involved.

International diplomatic treaties trumps domestic laws all the time.The only ruling a domestic court can rule is if the treaty was against the constitution or not which the SK supreme court completely glossed over making this ruling ever more impetuous.

In other words the court can only rule BY LAW if the treaty was UNCONSTITUTIONAL in it's entirety PERIOD.

7 ( +7 / -0 )

No one should be allowed to disrupt the global economy, as simple as that.

The Northeast Asia should accelerate the talk to become an integrated one system, and make the world a better place for human.

-6 ( +0 / -6 )

Never mind: if South Korean companies can no longer make mobile phones they will be able to concentrate on making those statues of sex slaves instead. They can have one on every street corner.

5 ( +5 / -0 )

The Northeast Asia should accelerate the talk to become an integrated one system

Ruled by whom or what I might ask?

Basically if you say the rule of economy alone then we sure do not want it,

Ruled by CPC?

I wouldn't touch it with a ten feet pole!!

4 ( +4 / -0 )

Triring, ruled by people, of course.

-1 ( +0 / -1 )

Can't they recycle the millions of phones disposed of annually?

0 ( +0 / -0 )

The article as missing the crucial "lingering and contentiously thorny bltterness and frostiness over what South Koreans consider Japan's refusal to acknowledge comfort women and WW2 atrocities.'

5 ( +5 / -0 )

This is the reality on the other side.

http://www.businesskorea.co.kr/news/articleView.html?idxno=33563

Japan's Export Restrictions Projected to Have Limited Effects on Korean Semiconductor Producers

The Japanese government's action to regulate semiconductor material exports to Korea will not affect semiconductor production by Korean chipmakers, NH Investment & Securities said on July 3.

“The export licensing system for three items -- fluorine polyimide, resists, and hydrogen fluoride -- will exert limited effects on Korean companies,” he said "Rather there is a growing concern about damage to Japanese companies."

-3 ( +1 / -4 )

Akie having another mental collapse. The weather is too hot, drink more water mate!

5 ( +5 / -0 )

Wake up Japanese entreprenuers! This is rare chance Japan takes back what you lost!

3 ( +4 / -1 )

Samit BasuToday  10:00 pm JST

This is the reality on the other side.

http://www.businesskorea.co.kr/news/articleView.html?idxno=33563

Japan's Export Restrictions Projected to Have Limited Effects on Korean Semiconductor Producers

*The Japanese government's action to regulate semiconductor material exports to Korea will not affect semiconductor production by Korean chipmakers, NH Investment & Securities said on July 3.*

*“The export licensing system for three items -- fluorine polyimide, resists, and hydrogen fluoride -- will exert limited effects on Korean companies,” he said "*Rather there is a growing concern about damage to Japanese companies."

Bu ha ha Analyst of Stock broker can never say " Sell them all". Besides, What is this "The Japanese government has decided to regulate resists optimized for light with a wavelength of below 193 nm. Thus, the two items are not subject to export restrictions.”??? Laughable. It means just for now.

Don't they know 2nd shot coming in August at latest, Completely out of white list. Enjoy the panic!

2 ( +2 / -0 )

Actually, this move by Japan is nothing new.

30 years ago, large Japanese electronics firm made many of Japams domestic supply of household batteries. They were typical batteries at typical price.

On a visit to another Asian country, I noticed the same companies batteries, were cheap and of extremely poor quality. When I remarked on this, the answer I got was, that they were made locally. I was suprised.

Well, not suprised really, the more I thought about it. The Japanese company was juat not willing to share the technology.

But I have noticed for a long time. Japan liles to take, and copy, but not share.

-5 ( +0 / -5 )

@showchinmono

Wake up Japanese entreprenuers! This is rare chance Japan takes back what you lost!

Japan is not in the contest. Chip fabrication industry is basically a money fight in which the only standing combatants are Taiwanese and Koreans. Japan lost the chip war decades ago and is not in the contest anymore.

-4 ( +1 / -5 )

@Ex_Res

But I have noticed for a long time. Japan likes to take, and copy, but not share.

Surely if it merely "copied", then Japanese batteries would be as bad or worse than the "local" Asian products?

Surely if they are better, then Japan must have develop new, improved technologies?

Have you "noticed", or have you help prejudices for a long time?

Perhaps you might start your education about reality by reading,

'Japan’s Role in the Development of Korean Technology' by Robert Castley?

Or if you only believe Korean sources, try,

'Technology Transfer: The Case of the Korean Electronics Industry' by Kiheung Kim, Department of Economics, Kyonggi University who documents,

"... a similar progression took place with Samsung Electronics Company (SEC), the largest electronics firm in Korea. Much of the firm's original equipment was supplied by Japanese companies".

Or study up on what the ""boomerang effect", a term coined by Japanese Professor Miyohei Shinohara, means.

Or if IT is not enough for you, let's look at who built up the success of Pohang Iron and Steel Company (POSCO), now one of the most efficient steel firms in the world and in a position to meet most of Korea's domestic demands.

It was, of course, Japan and Japanese companies, using Japanese technology.

The simple fact is, Japan dragged Korea out of Medieval feudalism in the early C20th and invested hugely in turning into an industrial powerhouse. Then gave birth to its electronic and other industries on the basis of technological transfers.

South Korea, on the other hand, has always been viewed as a major Intellectual property offender (IP theft/patent-infringement) not just by Japan but by the USA as well (pharmaceutical sector is one of the worst).

Again, if you only trust Korean sources, try

'Transfer Of Technology From Japan And The United States To Korean Manufacturing Industries: A Comparative Study' by Chung H. Lee.

Now, I think you are due all Japanese people an apology here.

4 ( +5 / -1 )

@NCIS Reruns

Koreans might have legitimate historic complaints, but going after the assets of Japanese companies that they invited to establish offices and factories in their country is self destructive. It occurred to me that it would actually be cheaper for S. Korea to tax its own citizens to compensate the comfort women or slave laborers than the losses entailed from a trade war with Japan.

 

Many Japaneses here do not understand the difference between civil and governmental disputes. The order of compensation equaling about USD 80,000 is a verdict on a civil dispute between a civilian and another civilian. Government can not meddle in any civil dispute. For, example, when your friend borrowed 1,000 yen from you, and does not pay back, your government can not do anything, and can not pay instead of your friend. If your government indeed wants to pay for your friend, a legislation of justifying it should be approved at the parliament. But, even after the government pays 1,000 yen to you, your individual's right of getting 1,000 yen from your friends is still valid in the court.

 

The decisive ruling of the supreme court of Korea between forced wartime laborers and the Japanese Nachi-Fujikoshi Corporation was made in 2012: https://www.nytimes.com/2014/10/31/world/asia/nachi-fujikoshi-south-korea-ruling.html

 

A monetary compensation equaling about USD 80,000 was ordered for each of the plaintiffs, a few survived victims. This is basically a civilian legal issue between individuals, and neither S. Korea nor Japan government should intervene.

 

In 2018, six year later, the Abe administration suddenly politicized the civil legal issue, accusing the new S. Korea government of Moon, who has nothing to do with the 2012 ruling. The 2018 ruling of the supreme court of Korea against Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metals Corp was not new, and just one of the subsequent rulings following the 2012 ruling. The difference between 2012 and 2018 is that Abe has exploited the legal issue as a political propaganda for domestic elections, together with the radar lock-on dispute, which again Abe ordered to provoke. Even the Foreign Minister Kono Taro acknowledged the individual's right, but Abe just denies it and later Kono followed him, contradicting his own previous testimony.

 *However, in response to Japanese Communist Party representative Kokuta Keiji in the Diet, Foreign Minister Kono Taro answered, "The individual's right to claim is not invalid because of the Japan-South Korea agreement," (Nov.14, Lower House Foreign Affairs Committee). This has brought puzzled reactions from both at home and abroad.*

http://www.japan-press.co.jp/modules/news/?id=11929

http://justice.skr.jp/estatement.html

http://english.hani.co.kr/arti/english_edition/e_international/870655.html

-5 ( +0 / -5 )

Perhaps you might start your education about reality by reading,

'Japan’s Role in the Development of Korean Technology' by Robert Castley?

Or if you only believe Korean sources, try,

'Technology Transfer: The Case of the Korean Electronics Industry' by Kiheung Kim, Department of Economics, Kyonggi Universit.

@Pacificwest. I will certainly order the books which you recommend. I would find then interesting reading.

Incidently, I don't aplologise for documenting my observations.

-2 ( +0 / -2 )

@pacificwest

Do you really believe the Korean court's actions were not politicised and given the green light to go ahead by the Korean government in advance?

I do not reply to all of your comments, as it will be off the topic.

The Korean judiciary system is reliable and 99% independent from politics. Unlike Japan, the government can not do anything on the Korean court's actions as in the other democratic countries. I do not know much about Japan, but in S. korea, the three powers of administration, legislation, and judicature are independent of each other.

But the system is not 100% perfect. The former president of S. Korea, who was pro-Japanese and in favor of Abe, allegedly pressured the court to delay the 2012 supreme court ruling:

http://www.koreaherald.com/view.php?ud=20180903000600

https://asia.nikkei.com/Politics/South-Korea-s-ex-Supreme-Court-chief-indicted-in-power-abuse-scandal

That case is now on trial together with the former Supreme Court chief justice. The system is not perfect, but it is still working in the long term as the former president was impeached and the former chief justice was indicted. She was so much stupid, far more than Abe.

-3 ( +0 / -3 )

It's only a threat to the South Korean economy. Not the global economy. Pathetic country.

2 ( +2 / -0 )

Blah, blah. S Korea says this, S Korea says that. Somebody remind me what was that agreement they signed with Japan about compensation for the war? And the one about apologies?

2 ( +2 / -0 )

It seems that Japan just put S Korea back in the normal list that there are China, Taiwan,,,,,,,. There are 26 trustworthy/reliable states for Japan as S Korea is now out of it. S Korea used to be in the normal list until 2004.

1 ( +1 / -0 )

The Korean judiciary system is reliable and 99% independent from politics.

Talk about blissful ignorance.

Basically the SK court jumped line when they made the ruling by interpreting an international treaty bound by two nations, Japan and SK.

That there is gross political statement by the court by over stepping their jurisdiction limitation to foresee rulings of DOMESTIC law including the constitution.

NO judge within a democratic nation with separation of power in force will ever make that kind of mistake.

SK government is equally at fault by not upholding their obligations pertained within the treaty.

If the court had made such ruling the SK government should have voiced that the court has no saying within international treaties and if forced the government should have compensated in full all so called damages on behalf of the plaintiff, instead SK government turned a blind eye making a ignorant statement saying that they will follow the ruling of the court.

How can Japan ever trust a nation that can fulfill their commitments so blandly?

WTO should throw SK out before they open their mouths.

2 ( +2 / -0 )

When it rains, it pours

Samsung Electronics Expects Quarterly Operating Profit to Fall More Than 50%

https://www.wsj.com/articles/samsung-electronics-expects-quarterly-operating-profit-to-fall-more-than-50-11562285691

1 ( +1 / -0 )

There goes Samit Basu's claim that Samsung will not be effected. LoL

1 ( +1 / -0 )

No SJ you are at the wrong with the starting premises that the court can make interpretation against an international treaty.

Like I posted All judges within a democratic nation with separation of power in force knows clearly he can not make any ruling against international treaties since they are not domestic laws. The judge will simply throw it out of court. That is how things works. IF a court was to make such a ruling on international treaties that is clearly overstepping their authority then it is the government's obligation to notifying the court that they had overstepped their authority and override the rulings.

Until this SK court ruling I have never heard of such cases so naturally you will have never heard the government make such override but that is how separation of power works in which it flows both ways.

1 ( +1 / -0 )

Over and over again , Japan had made many wrong decisions. This way of treating important matters

have not been deeply considered. How well does the Japanese courts know abt this subject outside of japan. Are the people in the courts well-informed ???.

-1 ( +0 / -1 )

PS. Pacificwest. Replace your rose-tinted spectacles of how you see Japan with some clear lenses.

0 ( +0 / -0 )

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