The South Korean government and top businesses formed a joint front to counter what the president called an “unprecedentedly urgent” national challenge from Japan retaliating for Korea’s hard-line policy on past issues with export restrictions aimed to destabilize the core Korean IT component industry.

“The government will do upmost to solve Japan’s unjustified export curbs…We will seek international support as the move puts the global economy at risk as well. Despite our efforts, the problem can drag on. We must be ready for all possibilities,” said President Moon Jae-in Wednesday in a rare meeting with all economy-related policymakers from the Blue House and government and leaders of 30 biggest business groups.

He invited business leaders to share their insight and worries so that the government can devise the best possible counteraction against Japan’s moves and proposed to establish an around-the-clock network and regular government-business channel during the “emergency” times.

The standoff between Seoul and Tokyo over Japan’s export curb flared up after Japanese officials suggested they were regulating shipments of etching gas to South Korea on suspicion of some of them going into the hands of North Korea, which is in violation of the United Nations sanctions.

“The Japanese government is hurting the Korean economy for political purpose and making groundless accusation by connecting the move to sanctions on North Korea,” Moon said in the meeting, warning Japan not to head towards the “dead end.”

As announced last week, Japan from Thursday lifted its preferential treatment on three materials bound for South Korea essential in chip and flexible OLED display production. No shipments have been approved since then, making Samsung Electronics – the world’s largest producer of chips and OLED smartphone panels – scramble to find suppliers outside Japan.

Tokyo indicated the action is a response to Seoul’s “breach of trust” in inter-government agreements. The Moon administration disbanded a fund designed to compensate victims of wartime sexual slavery under the 2015 settlement to close the comfort women issue. The Supreme Court under liberal bench members ordered Japanese companies to repair individuals for wartime forced labor and seized assets of the companies in Korea when the Japanese government and firms refused to comply by arguing that the 1965 basic treaty had covered all wartime and colonial damages in return for $500 million loan and aid.

LG, SK and Samsung spoke first as their display and chip businesses are directly hurt by the first batch of curbs from Japan. They were followed by local component and material producers Kumho Asiana, Kolon, Hyundai Motor, and Hyosung groups.

Japan has warned that it could remove Korea entirely from the white-country list next month, placing over 1,000 Japanese materials necessary from IT to heavy industries manufacturing under scrutiny for shipments to Korea.

All remarks were made behind the doors as they could contain confidential or sensitive information.

Samsung was represented by vice chair Yoon Boo-keun as de factor leader Jay Y. Lee is in Japan to find an alternative for the embargo. Hwang Kak-gyu, vice chair of Lotte Group, also attended on behalf of chairman Shin Dong-bin also in Japan to use his connection over the embargo.

Hyundai Motor Executive Vice Chairman Chung Eui-sun, SK Group Chairman Chey Tae-won, and LG Group Chairman Koo Kwang-mo and leaders from Posco, Hanwha, GS, NongHyup, Hyundai Heavy Industries, Shinsegae, KT, Hanjin, Doosan, and LS attended the meeting.

Heads of the country’s major business lobby groups including Kim Young-ju, chairman of Korea International Trade Association, Sohn Kyung-shik, chairman of the Korea Employers Federation, Kim Ki-mun, chairman of the Korea Federation of SMEs, and Kang Ho-gap, chairman of the Federation of Middle Market Enterprises of Korea, also were present.

From the government were Hong Nam-ki, deputy prime minister and finance and economy minister, Sung Yun-mo, trade, industry and energy minister, Lee Jae-kap, employment and labor minister, Park Young-sun, SMEs and startups minister, Noh Hyeong-ouk, minister for the Office for Government Policy Coordination, and Choi Jong-ku, chairman of the Financial Services Commission. Blue House officials also attended, including Noh Young-min, presidential chief of staff, Kim Sang-jo, chief of staff for policy, Kang Gi-jung, senior secretary for political affairs, Yoon Do-han, senior secretary for public communication, Lee Ho-seung, senior presidential secretary for economic affairs, and Joo Hyung-chul, Moon’s economic advisor.

By Oh Soo-hyun and Lee Eun-joo

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