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Wed, 13 Nov 2019 14:56 GMT

Seoul Plans Extra Budget to Cope with Japan's Export Curbs


7Dnews London

Fri, 12 Jul 2019 02:55 GMT

South Korea's Ruling Party said it would secure a supplementary budget that would include 300 billion won ($225 million) to cope with Japan's recent restrictions on high-tech material exports, Reuters reported.

About one-third of this budget will be allocated for backing South Korean materials and equipment makers in order for their products to be able to reach markets, the ruling party said.

South Korea has also warned the US of the potential damage that can result from Japan's curb on high-tech material, calling these restrictions "undesirable".

On a phone call on Wednesday, July 11th, with US Secretary of State Mike Pompeo, South Korean Foreign Minister Kang Kyung-wha said the restrictions may disrupt the global supply chain and US firms.

Kang "expressed concern that this is undesirable in terms of friendly relations between South Korea and Japan and trilateral cooperation among South Korea, the US and Japan," Kang's ministry said in a statement.

The statement cited Pompeo as saying that he understood and that they had both agreed to strengthen communication between the three sides.

Japan has tightened controls on exports bound for South Korea, after South Korea's Supreme Court in October highlighted the right of South Koreans, who were forced to work for Japan's Nippon Steel company during World War Two, to be compensated by the company.

President Moon Jae-in of South Korea said earlier in July that his country may have to take countermeasures if the Japanese trade restrictions cause damage to South Korean companies, although he said that he does not want it to happen.

"The vicious cycle of actions and counteractions is not desirable at all for both countries," Moon told a meeting with his senior aides.

Jae-in said that his country will prioritise local high-technology equipment and materials, expecting South Korea to improve the trade deficit with Japan in the long term.