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Members of the Joint Action for Historical Justice and Peaceful Korea-Japan Relations hold an emergency protest outside the Ministry of Foreign Affairs in Seoul on March 6 following the government’s announcement of its plan for resolving the issue of compensation for victims of forced mobilization during the Japanese occupation. (Kim Jung-hyo/The Hankyoreh)

The South Korean government announced that it’s halting a dispute resolution procedure it initiated with the World Trade Organization to protest export controls unilaterally imposed by Japan.

The government’s announcement came before Japan has even lifted the export controls, prompting criticism that the decision is not only premature but also servile. Some say this will set a precedent for Seoul tolerating Japanese interference in a decision by the South Korean Supreme Court.

Kang Kam-chan, director general for trade controls policy at the Ministry of Trade, Industry and Energy, announced that Korea was suspending its WTO complaint during a press briefing about pending export controls between the two countries at the central government complex in Seoul on Monday.

“In regard to the pending issue of trade controls between our two countries, the two governments have agreed to quickly move forward with bilateral deliberations aimed at returning to the situation prior to July 2019,” Kang said.

To achieve that, Seoul and Tokyo will soon hold deliberations about export management policy. Not only are Japan’s export controls still in place, but Japan hasn’t even set a timeframe for lifting them.

In July 2019, Japan blocked exports to South Korea of three key semiconductor materials — hydrogen fluoride, fluorine polyimides and photoresist — in response to an October 2018 ruling by the Korean Supreme Court ordering Japanese companies who utilized forced labor to pay damages to their Korean victims.

Then, that August, Japan removed South Korea from its “white list” of countries that enjoy expedited export procedures. The South Korean government filed a complaint against Japan with the WTO that September.

Critics have taken issue with the fact that Korea appears to be forgiving Japan even though it hasn’t remedied its actions.

“While Japan had claimed that [its actions] weren’t economic retaliation for the South Korean Supreme Court’s decision, this amounts to an acknowledgment that that’s exactly what they were,” said Kim Yang-hee, a professor of economics at Daegu University. “The government is humiliating the public with a topsy-turvy solution to this dispute that amounts to raising the white flag.”

As far as Korea is concerned, there’s no urgent need to lift the export controls, as doing so won’t have any major benefits and there’s no clear way to prevent something similar from happening in the future.

Kim Yang-hee said that the move “won’t take us back” to before the export controls were imposed, and that there isn’t a clear need to suspend the claim.

“We’ve set up a reliable domestic supply of those materials. We’ve greatly reduced our dependence on Japanese imports for the hundred most common types of parts, materials and equipment,” she said.

In February 2022, the government announced that dependence on Japan for the three items under export controls had shrunk considerably, including a precipitous drop in the value of hydrogen fluoride imports.

The Korean government didn’t provide a detailed response to criticism that there’s no obvious way to prevent the Japanese from reinstating the export controls. “We’ve made considerable progress on diversifying our import countries and attracting foreign investors. We don’t think Japan will impose export controls again,” Kang said.

Instead, Seoul highlighted the security perspective.

“Supply chains have become more important from a perspective of international security. There’s a consensus between Korea and Japan that we need to move toward a future-oriented cooperative relationship both in regard to the economy and industry,” Kang said.

“Korea has actually done a big favor for Japan, which was in danger of losing the WTO dispute because it couldn’t demonstrate a security-related need for export controls on semiconductor materials,” Song Gi-ho, an attorney who specializes in trade. “Giving Japan a pass for using security as a pretext for disrupting the international division of labor is at odds with our economic strategy of multilateralism, as well.”

Korea and Japan’s information-sharing agreement known as GSOMIA is expected to be normalized once Japan lifts its export controls. The agreement is currently in limbo after South Korea paused a termination procedure it had announced.

The two countries reportedly plan to tout the lifting of export controls and the normalization of GSOMIA as the achievements of restoring “shuttle diplomacy” between South Korean President Yoon and Japanese Prime Minister Fumio Kishida in a summit that’s expected to be held this month.

By Lee Jeong-hun, staff reporter; Key Min-do, staff reporter

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