A turn for the worse

Japan should not remove Korea from 'white list'

The ongoing trade dispute between South Korea and Japan is expected to take a turn for the worse. This is because the Japanese government is determined to remove Korea from a list of countries entitled to preferential treatment for trade.

The removal, if implemented, could deal a far worse blow to the Korean economy than Japan's initial step against Seoul ― export restrictions on three key materials needed to produce semiconductors and display panels. It is regrettable that Japan has made no secret of its plan to start a trade war with Korea.

During a meeting between officials of both sides in charge of managing strategic materials Friday, Japan revealed its plan to remove Korea from the so-called white list. This means Korea cannot enjoy a fast, simplified process of getting supplies of up to 1,100 products such as high-tech materials, electronics parts, IT equipment and machine tools from Japan.

This unilateral measure might do incalculable damage to domestic industries across the board. Because Japanese firms will have to get permission from their government whenever they export strategic goods to Korea, the delisting of Korea can be seen as a virtual trade embargo.

The Korea Economic Research Institute (KERI) predicted that Korea will suffer a 2.2 percent decline in its gross domestic product (GDP) if the country suffers a 30 percent shortage of semiconductor materials. It estimated that Korea's GDP will plunge 3.1 percent if the nation responds to Japan's export curbs by restricting exports of Korean-made memory chips and their parts to Japan. In that case, Japan's GDP might drop 1.8 percent.

As seen in the KERI analysis, Korea will inevitably sustain far more extensive damage from the dispute than Japan. Nevertheless, Tokyo should not try to use trade as a means to retaliate against its neighbor for political purposes. The two economies have become heavily interdependent on each other. Thus, the escalating trade spat will be destructive for both sides. Moreover, the trade friction will have an adverse impact on the world economy by undermining the global supply chain.

That is why Seoul and Tokyo should try to find a diplomatic solution. It is disappointing to see Japan refusing to resolve the problem through dialogue. Even its officials showed arrogance and made unilateral claims during their working-level meeting with their Korean counterparts in Tokyo, Friday.

Japan's economic retaliation is apparently in direct response to a ruling by the South Korean Supreme Court last October that ordered Japanese firms to compensate Korean victims of forced labor during World War II. Tokyo also cited allegations that South Korea violated U.N. sanctions against North Korea by transferring Japanese strategic materials such as hydrogen fluoride to the North.

But such allegations are groundless. on the contrary, the U.N. panel of experts reported that Japan exported some strategic items and luxury goods to North Korea over the past years in violation of U.N. sanctions. Those items included commercial radar antennas used by the North for the production of an anti-ship missile in 2015.

Japan should stop making false claims to justify its export curbs. It must retract its retaliatory steps and should not drop Korea from the white list. Prime Minister Shinzo Abe and other Japanese leaders had better learn how to get along with the country's former colony.