South Korea have now removed Japan from its whitelist of fast track trading partner. Japan had removed South Korea from its list of preferential partner last month. It is said that the recent move by South Korea to remove Japan from its whitelist was a response to Japan’s action of removing South Korea from its whitelist last month.
The move by South Korea meant that there would be tighter trade regulations that includes long procedure for permit application and elaborate paperwork for South Korean weapons production exports to Japan.
The diplomatic as well as the trade ties between South Korea and Japan have deteriorated ever since South Korea’s Supreme Court ruling that had asked for war time compensation for forced labour to South Korean workers. Japan had responded that all war time compensation have been paid during a 1965 agreement between Japan and South Korea. Between 1910 till 1945, South Korea was a colony of Japan.
In the ongoing spat, Japan had curb exports of three chemicals used in making memory chips and display screen to South Korea. Reasons given by Japan for that particular move was that South Korea reportedly mishandled sensitive chemicals and thus there have been export restrictions for those chemicals.
The chemicals are also used by South Korean giants such as Samsung and LG and it is considered essential for many South Korean industries and thus South Korea have taken up the exports restriction issue to WTO (World Trade Organization) asking for a bilateral consultation with Japan at the WTO level earlier this month.
South Korea Have Now Removed Japan From Its Whitelist Of Trade Partners : Japan is yet to take a decision whether to accept the WTO level bilateral consultation with South Korea. Japan has, however, said that there won’t be any change to the exports curb to South Korea. Under the WTO guidelines, Japan is to response within 10 days for a stance on whether it accept the request for bilateral consultation or not. And both South Korea and Japan have to resolve the issue within 60 days if Japan accepts the bilateral consultation at the WTO level. And if the issue is not resolved bilaterally, WTO will set a panel and look into the matter and decide on the issue within a stipulated period of two years at the maximum.