The years-long trade dispute between South Korea and Japan may end as early as this month when Seoul puts Tokyo back on its “whitelist” of preferred trade partners and Japan lifts its export curbs on three key chip materials bound for Korea.

“We will issue an administrative notice on the public notice of the exports and imports of strategic items this week and seek negotiations with Japan to reinstate the country in our whitelist,” said Lee Chang-yang, minister of trade, industry and energy on Wednesday.

Lee’s remarks show that Korea plans to take the initiative although Japan has yet to restore Korea on its list of preferential treatment.

“It is trivial to discuss who excluded or restored first as both countries have agreed on the swift reinstatement,” Lee said. “If we improve the system, Japan will naturally follow suit, and Korean companies will benefit from the simplified export process.”

Seoul’s ties with Tokyo soured after the Korean Supreme Court in 2018 ruled that Japanese companies compensate the victims of wartime forced labor. Japan placed export curbs in retaliation against the court ruling and Korea followed with similar measures.

The Korean government is expected to complete the process of withdrawing its lawsuit filed against Japan with the World Trade Organization this week.

The government is set to accelerate its moves to foster future-oriented economic cooperation with Japan. It plans to establish a stable supply network for high-tech industry sectors including chips by linking Korea’s manufacturing and Japan’s materials, parts and equipment, and attract Japanese companies to the mega chip cluster in Yongin, Gyeonggi Province.

It also plans to expand cooperation for liquefied natural gas (LNG) and pursue joint research and development projects such as hydrogen direct reduction and environmentally-friendly future ships to respond to climate change.

Carbon regulations such as the European Union (EU) Carbon Border Adjustment Mechanism (CBAM) stand as a common challenge for the Korean and Japanese steel industries, which indicates possible cooperation between the two countries in the development of hydrogen reduction ironmaking technology for carbon reduction, the ministry said.

By Park Dong-hwan and Choi Jieun

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