South Korea tightens export controls on Japan

South Korea’s Trade, Industry and Energy Minister Sung Yun-mo. (AFP)
Updated 13 August 2019

South Korea tightens export controls on Japan

  • Dispute fuels concerns over potential implications for security cooperation

SEOUL: South Korea has put Japan into its own new export category as President Moon Jae-in called Tokyo’s latest measures “very serious,” intensifying a trade war between the two neighbors and US allies.
The move came after Seoul announced earlier this month it would remove Tokyo from its list of trusted trading partners, reciprocating an identical decision by Japan.
That followed Tokyo’s imposition of tough restrictions on exports crucial to tech titans such as Samsung following a series of South Korean court rulings ordering Japanese firms to pay for forced labor during the Second World War.
The dispute has raised concerns over the potential implications for their security cooperation in the face of North Korean missile tests, and the possible impact on global supply chains.
At a meeting with his top aides, Moon reflected on Japan’s colonization of the Korean peninsula in the first half of the 20th century to highlight the gravity of the situation.
“As a victim of great suffering from Japanese imperialism in the past, we, for our part, cannot help but take Japan’s ongoing economic retaliation very seriously,” Moon said.
“It is even more so because this economic retaliation is in itself unjustifiable and also has its roots in historical issues,” he added.
Japan insists its latest measures were enforced on national security grounds.

As a victim of great suffering from Japanese imperialism in the past, we, for our part, cannot help but take Japan’s ongoing economic retaliation very seriously.

Moon Jae-in, President of South Korea

South Korea’s list of trade partners is currently divided into two groups, those who are members of the world’s top four export control agreements and those who are not.
But Seoul’s Trade Ministry said it added a new category for countries that had signed the four pacts “but operate an export control system that violates international norms.”
Japan is the only country in the new category.
“Since it’s hard to work closely with a country that frequently violates the basic rules ... we need an export control system that addresses this,” said South Korean Trade Minister Sung Yun-mo told reporters.
Sung did not offer examples of such violations by Japan.
The revision will be implemented in September, he said, adding that Seoul was open to negotiations with Tokyo.
Japan could look elsewhere for those goods currently sourced from South Korea, a Japanese government official said.
“We can import them from Taiwan. There are few items that can’t be replaced,” the unnamed official told the Yomiuri Shimbun.
Under the new regulations, South Korean firms must submit five documents — from the current three — to win approvals for exporting sensitive items to Japan, with the process taking up to 15 days.


Huawei given 90 days to buy from US suppliers

Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Monday, Aug. 19, 2019. (AP)
Updated 20 August 2019

Huawei given 90 days to buy from US suppliers

  • Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers

WASHINGTON: US Commerce Secretary Wilbur Ross said Monday the US government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist.
The “temporary general license,” due to expire on Monday, will be extended for Huawei for 90 days, he told Fox Business Network Monday, confirming an expected decision first reported Friday by Reuters. He also said he was adding 46 Huawei affiliates to the Entity List, raising the total number to more than 100 Huawei entities that are covered by the restrictions.
Ross said the extension was to aid US customers, many of which operate networks in rural America.
“We’re giving them a little more time to wean themselves off,” Ross said.
Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers.
The extension, through Nov. 19, renews an agreement continuing the Chinese company’s ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
Asked what will happen in November to US companies, Ross said: “Everybody has had plenty of notice of it, there have been plenty of discussions with the president.”
When the Commerce Department blocked Huawei from buying US goods earlier this year, it was seen as a major escalation in the Sino-US trade war.
The US government blacklisted Huawei, alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.

BACKGROUND

The US blacklisted Huawei, alleging the Chinese company was involved in activities contrary to national security or foreign policy interests.

As an example, the blacklisting order cited a pending federal criminal case concerning allegations Huawei violated US sanctions against Iran. Huawei has pleaded not guilty in the case.

The order noted that the indictment also accused Huawei of “deceptive and obstructive acts.”
At the same time the US says Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
Huawei, the world’s largest telecommunications equipment maker, is still prohibited from buying American parts and components to manufacture new products without additional special licenses.
Many Huawei suppliers have requested the special licenses to sell to the firm. Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more. He said on Monday that there were no “specific licenses being granted for anything.”