The Japanese government has implemented export regulations on South Korean items essential for the production of semiconductors and displays since July 4th, 2019. Then, it excluded Korea from Japan’s whitelist on Aug. 2nd. As a result, Korea’s semiconductor and display industries have been hit hard. The export restrictions have also caused severe conflicts between Korea and Japan. Why did Japan enforce export restrictions on Korea? The CBT analyzed it in more detail from diplomatic, political, and economic perspectives.

  Japan took issue with South Korea’s Supreme Court ruling about forced labor and thus created the export regulations. South Korea’s Supreme Court ruled in favor of the plaintiff by acknowledging the Japanese companies’ responsibilities for compensation of the victims of Japan’s forced labor, and it judged for payment of 100 million won per victim. In response, the Japanese government argued that the issue of compensation for victims of forced labor was settled through the Korea-Japan Claims Agreement in 1965. It also said that the court’s ruling violated the Korea-Japan Claims Agreement, which had served as the basis for normalizing diplomatic relations. Japan claims that it enacted export regulations due to the loss of trust in South Korea and not as retaliatory measures based on historical issues.

  However, the Japanese government's statement differs from the facts and reveals its action is retaliation against the ruling regarding forced labor. The Korea-Japan Claims Agreement is an incomplete agreement, and the legality of its colonization of Korea and the issue of reparations has never been properly discussed between the two countries. Also, the money Japan gave to South Korea at that time was for the celebration of Korea’s independence and economic cooperation, not for reparations for its colonial rule. As an individual’s right to a claim cannot be extinguished by negotiations between countries, which is recognized in international law, the Korean government is not in violation of the international treaty. However, Japan is strongly denying South Korea’s Supreme Court ruling in spite of these facts. Professor Yang Ki-ho (Dept. of Japanese Studies of Sungkonghoe University) said that the Abe government’s strong refusal is because, if Japan compensates the victims, Japan also has to compensate North Korea and other Southeast Asian countries.

  However, the Abe government’s actions are not seen as mere diplomatic reactions based on the ruling regarding forced labor. The Abe government's decision to regulate exports to South Korea was a political means to get votes in the Upper House election. Abe’s government needed more than two-thirds of the seats to propose a constitutional amendment, so they needed to gather votes from conservative forces. The right wing of Japan continually has presented policies about national security, so tension between North Korea and South Korea was important to them. However, the Moon Jae-in government is promoting reconciliation with North Korea, and the U.S. government also held a meeting with North Korea. This creates anxiety for Japan due to its inability to intervene in inter-Korea relations. However, to propose a constitutional amendment, the Abe government had to get the favor of the right-wing factions. Therefore, as a way to bring political forces together, the Abe government turned its attention to export regulations.

  The Japan Conference can be regarded as the center of Japan's right-wing power organization, which includes 16 of the 20 members of the Abe Cabinet. Also, 40 percent of the National Assembly belongs to this group. The Japan Conference is calling for the restoration of the Emperor System and the Yasukuni Shrine in an effort to follow the revisionist line. Therefore, they deny past events like the forced sex slaves and forced labor and deem Japan to be superior to South Korea. Also, the Abe government was created by the power of right-wing groups, so denying past sex slaves, bringing up security issues and pushing ahead with export restrictions are considered as mere political ploys. Though, the Abe government has yet to secure more than two-thirds of the seats and is facing a crisis because of South Korea’s intense actions, such as a boycott against the products of Japan, excluding Japan from its whitelist and ending the General Security of Military Information Agreement.

  However, after the upper house elections, Japan continued to impose export regulations, such as excluding Korea from its whitelist. It indicates that Japan has another ulterior motive apart from political reasons. They want to catch up with Korean companies that are leading the global semiconductor market. Until just 30 years ago, Japan had monopolized the semiconductor market, ranking first, second and third in the global semiconductor market. Increasingly, however, Samsung and SK Hynix, which are Korean companies, have taken the top-selling positions, while Japanese companies have been pushed out of the top 10. For Japan, it could not help but aim for a revival of its semiconductor industry, and in the end, they tried to drag Korean companies down to help revive their semiconductor industry. Japan is investing aggressively in the semiconductor industry in line with export regulations on key semiconductor materials, and it seems that Japan is planning to gradually reduce the technology gap in the future.

  Of course, the current situation is a blow to the structure of Korean companies that are heavily dependent on Japan. However, unlike the past when it was hard to catch up with Japan, Korea is currently overtaking Japan and they will not meekly step back. Korean conglomerates, such as Samsung, are proceeding with a ̒Japan-free̕ plan at this point, which means that small- and medium-sized companies in Korea will also be able to acquire the materials from other countries. In the meantime, Japan made a kind of conciliatory gesture on August 19th, authorizing the export of photoresist, which is a component of semiconductors in the electronic circuitry, but it is likely a gesture to disrupt Samsung’s new supply method by deftly avoiding Samsung’s ‘Japan-free’ plan,  as Samsung was busy because they had to find new stable supply sources. Now that everyone knows Japan’s ambition to revive their semiconductor industry, Korea must not let its guard down.

  Japan set up a strategy aimed at economic benefits as well as political reasons by making an issue of the judgment on forced labor. It is vindictive to make export regulations in response to the Korean Supreme Court’s judgment on forced labor, and trying to drag down the long-standing Korean companies to revive their own semiconductor industry can also be seen as senseless behavior. However, these export regulations are also causing Japan to lose its main customers, who import their semiconductor components, and it will also be a heavy blow to Japanese companies using Korean semiconductors. A Japanese expert said that even if it is a detriment to Korea in the short term, the Japanese semiconductor industry will also falter if Korea finds another source of import. In Korea, the boycott is now intensifying with growing anti-Japanese sentiment, and the government is also taking a tough response. Now, Japan is refusing to negotiate, sticking to its previous position, but, if this situation persists for a long time, it won’t do any good for either country. The historical conflict must be resolved, and it is wrong for Japan to ignore the enormous damage and agony suffered by the victims under colonial rule for economic or political gains. In addition, Korea should take this opportunity to diversify its suppliers of semiconductor components, and it should also end its submissive relationship with Japan. If Japan continues to show such a disrespectful attitude, Korea should take a strong position and strengthen public opinion in the international community to induce Japan to resolve the issue smoothly with Korea.

By Kim Min-ji | mj39@cbnu.ac.kr
By Baek Han-na | backna@cbnu.ac.kr