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Japan just playing cat and mouse, official says

Aug 10,2019
Japan permitting the export of one of the three restricted materials is not so much a sign of a thaw as it is the latest move in a long strategic game being played out by Tokyo, Blue House policy chief Kim Sang-jo said.

They are just trying to show that they are “not making any [trade] discrimination action against Korea,” he argued on a radio show Friday.

On Thursday, for the first time in 36 days, the Japanese government approved the export of EUV photoresists, a key material in the manufacturing of next-generation semiconductors.

It was one of the three materials – the others being hydrogen fluoride etching gas and fluorinated polyimide – facing more stringent export evaluations since July 4.

Korea has also been excluded from Japan’s “white list” of 27 countries that receive preferential treatment on export processes.

“Japan has approved export in one case,” Kim said. “Previously, Korea was on the white list, but it is now treated the same as Taiwan or China, where the process takes about four to six weeks.”

Kim, whose formal title is presidential chief of staff for policy, said Japan’s export approval is a signal to the world, an indication that it is treating Korea like any other Asian country.

“Japan is trying to show externally that its actions are not a ban on exports but the management of strategic goods,” Kim said.

“I think it is building evidence and justification for when Korea files a complaint at the WTO (World Trade Organization).”

Kim said Japan’s argument is that it is just normalizing the process by withdrawing a privilege granted earlier.

Japanese Industry Minister Hiroshige Seko stressed Thursday that Japan’s actions cannot be called export bans, saying that Korea has “unfairly” said that Japan is “banning exports.”

Yoshihide Suga, Japan’s chief cabinet secretary, on Thursday said that “this shows we are approving legitimate trade without arbitrary management.”

Kim said the cat-and-mouse game between Korea and Japan is likely to continue for the time being.

“If you compare the current situation to that of game theory in economics, we are engaged in a strategic and repetitive game,” Kim said. “Simply put, the strategy game means that instead of pushing forward with a single strategy, we are changing the strategy accordingly to the response to our counterpart.”

“We’re changing strategy not once but numerous times repeatedly.”

He said both Korea and Japan already know what cards the other holds.

“The only thing that we don’t know is which one they plan to use first among the cards that they are holding,” Kim said. “We expect this will repeat for an extensive period.”

The Korean government was planning to exclude Japan from its own white list of 29 countries but has decided to suspend the announcement in response to Japan’s approval of the EUV photoresists.

Kim stressed that Korea could still take Japan off the white list. The move remains available.

“We’re not halting,” Kim said. “A lot of possibilities are under consideration.”

“The Japanese actions taken yesterday are one of the factors. My understanding is that we will discuss the issue again.”

While the Korean government suspended its decision to drop Japan from its white list, the Korean Ministry of Environment on Thursday tightened procedures for the import of coal ash from Japan.

The ministry said it will start investigating the radiation levels of and heavy metal pollutants in imported coal ash.

Korea last year imported 1.27 million tons of coal ash, of which 99.9 percent comes from Japan. The coal ash is from Japanese thermal plants and used as a key ingredient in cement.

“The action is not a restriction on imports but rather strengthening our safety measures,” said Lee Chae-eun, director of the Ministry of Environment’s resources circulation policy division.

by LEE HO-JEONG, SOHN HAE-YONG [lee.hojeong@joongang.co.kr]