By Reuters
SEOUL - South Koreaâs President Moon Jae-in has urged Japan to withdraw export controls on high-tech materials bound for South Korea as a row over forced wartime labor threatened to disrupt global supplies of South Korean memory chips and smartphones.
FILE PHOTO: South Korean President Moon Jae-in delivers his speech on the government's 2019 budget proposal during a plenary session at the National Assembly in Seoul, South Korea, November 1, 2018. (REUTERS/Kim Hong-Ji/Pool / MANILA BULLETIN)
In his first public remarks on Japanâs restriction on exports to South Korea, Moon said on Monday a âvicious cycleâ of action by the uneasy neighbors, both important U.S. allies, was something both of them should avoid.
South Koreaâs tech giant Samsung Electronics Co (005930.KS) and SK Hynix Inc (000660.KS) - the worldâs top memory chipmakers, and suppliers to Apple (AAPL.O) and Chinaâs Huawei Technologies - could face delays if the Japanese measures, which took effect on Thursday, drag on.
Japan tightened restrictions on the export of the high-tech materials to South Korea in connection with a dispute over compensation for forced wartime labor.
The row between the U.S. allies flared last October when South Koreaâs Supreme Court ruled that Japanâs Nippon Steel (5401.T) must compensate South Koreans for forced labor during World War Two.
Japan maintains that the issue of forced labor was fully settled in 1965 when the two countries restored diplomatic ties, and has denounced the South Korean court ruling as âunthinkableâ.
Moon said South Korea could not rule out countermeasures if the Japanese action inflicted damage on South Korean companies, although he said he did not want see that.
âThe vicious cycle of actions and counteractions is not desirable at all for both countries,â Moon told a meeting with his senior aides.
South Korea is planning to file a complaint with the World Trade Organization over Japanâs restrictions.
Moon said he would prioritize development of home-grown high-tech equipment and materials and South Korea would improve the trade deficit with Japan in the long term.
South Korea has been running chronic trade deficits with Japan as South Korean industries rely on Japan for key inputs and equipment.
The dispute over compensation for forced labor is the latest surge of animosity in a relationship long over-shadowed by South Korean resentment of Japanâs 1910-1945 occupation of the Korean peninsula.