South Korean Deputy Prime Minister and Finance Minister Hong Nam-ki warned of “responsive” actions if Japan does not withdraw the export curbs on Korea that he called “clear retaliation.”

He denied speculations that Seoul has no options beyond verbal warning and claimed it had studied the possibility of retaliatory actions from Japan since the beginning of the year.

“We will file a complaint with the World Trade Organization (WTO) and take all necessary actions. But since it takes time for a WTO ruling, we will roll out other measures allowed by international and domestic laws,” Hong said in a radio interview on Thursday.

From Thursday, Japanese exporters would be subject to stricter controls when shipping three key materials for making displays and chips to Korea. Tokyo is also said to be considering a move to remove Korea from its whitelist of friendly countries that enjoy fast-track export approvals, making Korea the first country to be dropped from that list.

Hong said there had been hints since early this year of possible retaliatory actions from Japan if the wartime ruling dispute was not resolved, and that local officials had since monitored the situation and weighed all possible countermeasures.

Economic retaliation is a clear violation of international law and should be repealed, Hong said, warning that the sanctions would hurt not only the Korean economy but also Japan’s.

“As trade relations between the two countries are highly interconnected, Japan is likely to hit Korea with products that rely heavily on Japanese imports,” Hong said, and projected that should the export curbs be ratcheted up, they would start with Korea`s most-dependent items.

He added that the government may push for an increased budget at parliament to jumpstart domestic production of import-dependent materials, components and equipment.

Despite the inevitable blow of Japan’s sanctions, Hong played down their impact on the domestic economy and stressed that they played little part in the latest government decision to trim its growth outlook. On Wednesday, Korea cut its 2019 economic growth forecast to 2.4-2.5 percent from 2.7 percent, citing slowing exports and sluggish investment.

By Chung Seok-woo and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]