develop technologies for industrial materials
and parts as it moves to reduce its dependence
on imports. The government will also financially
support South Korean companies in mergers
and acquisitions of foreign companies
and expand tax benefits to lure more
international investment, while easing labor
and environmental regulations so that local
companies can boost production, the country’s
trade ministry said.
South Korea’s plans are aimed at stabilizing
the supply of 100 key materials and parts in
semiconductors, display screens, automobiles
and other major export sectors, where its
companies have heavily relied on Japanese
imports to produce finished products.
Japan’s Cabinet approved the removal of South
Korea from a list of countries with preferential
trade status, which would require Japanese
companies to apply for case-by-case approvals
for exports to South Korea of hundreds of items
deemed sensitive.
The decision followed a July measure to
strengthen controls on certain technology
exports to South Korean companies that rely
on Japanese materials to produce computer
chips and displays used in smartphones and TVs,
which are key South Korean export products.
South Korean officials have vowed retaliation,
including taking Japan off its own “whitelist”
of nations receiving preferential treatment in
trade. Moon’s office said it will also consider
ending its military intelligence-sharing pact with
Japan as part of its countermeasures, saying it
could be difficult to share sensitive information
considering the deterioration of trust between
the countries.
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