8th Korea-Japan Dialogue Issue 'Strategic Goods'... "Significant Progress Difficult"

"Localization of Export-Regulated Items Increases Corporate Costs, Reality Needs Mutual Understanding
Localization Can Enhance Negotiation Power but Difficult to Bring to the Table"
Criticism Over Ministry of Industry Minister's Initial Response
We Solved Partial Issues, So Demand Japan Lift Regulations
"Working-Level Meetings Increase Burden and Hinder Candid Dialogue"
Director-Level Meetings Hold Meaning in Continuing Dialogue Rather Than Major Progress

On the morning of December 16 last year, at the 17th floor, 1st Special Conference Room of the Ministry of Economy, Trade and Industry main building in Japan, the 7th Korea-Japan Export Control Policy Dialogue took place. Lee Ho-hyun, the chief Korean representative and Director of Trade Policy at the Ministry of Trade, Industry and Energy (left), and Ida Yoichi, Director of Trade Management at the Ministry of Economy, Trade and Industry, shook hands. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The government decided on the 10th to proceed with the '8th Korea-Japan Export Control Policy Dialogue' in the form of a video conference, but due to the spread of the novel coronavirus infection (COVID-19), both countries have imposed mutual entry restrictions, making it difficult to have a proper dialogue. Since both countries are well aware that domestic production of export-controlled items leads to increased costs for companies, it is analyzed that it will be difficult for the working-level director-general meeting to pressure Japan with the 'domestic production' card.

According to the Ministry of Trade, Industry and Energy, the 8th dialogue with Japan will be held via video from 10 a.m. to 6 p.m. at the Seoul Government Complex annex, lasting about 8 hours. This dialogue, held for the first time in three months since December 16 last year, will be attended by Korea's chief representative, Lee Ho-hyun, Director-General for Trade Policy at the Ministry of Trade, Industry and Energy, and Ida Yoichi, Director of Trade Management Department at Japan's Ministry of Economy, Trade and Industry.

First, they will discuss export-controlled items and exclusion from the whitelist (countries given preferential export screening for security reasons). According to the Ministry of Trade, Industry and Energy, since differences in systems and operations between the two countries have been confirmed several times, specific working-level discussions are planned.

From the Korean government's perspective, increasing negotiating power through domestic production of Japan's export-controlled items can be used as a negotiation card. The government views domestic production as significant, as Minister Sung Yun-mo's first schedule this year was a visit to Solbrain, a company that achieved self-reliance in one of the three major export-controlled items, hydrogen fluoride. A ministry official said, "It is difficult to say whether this will be brought up at the negotiation table."

Experts say that while it can be 'recognized' as a means to enhance negotiating power, it will be difficult to specifically mention it at the director-general working-level meeting. They point out that overemphasizing this could rather become an obstacle to reaching an agreement.

Professor Heo Yoon of Sogang University Graduate School of International Studies said, "Since domestically produced products are not of the same quality as Japan's, companies are accepting a certain level of defect rate, bearing the risk of increased costs," adding, "While it may be a temporary factor to enhance negotiating power, directors are well aware that it is a burden in the long term, so overemphasizing the domestic production issue could act as a hindrance to sincere talks and reaching an agreement."

There are also criticisms that Korea's initial response was not smooth. Before the director-general meeting, the minister directly declared that Korea is properly adhering to Japan's pointed demands such as ▲building mutual trust between the two countries ▲establishing a legal basis for conventional weapons catch-all controls ▲strengthening Korea's export organization, which could lead Japan to misunderstand that Korea is 'politicizing' the working-level meeting.

Minister Sung emphasized at the 'Ministerial Meeting on External Economy and Related Ministers' Meeting on Japan's Export Controls' on the 6th that Korea is resolving issues such as ▲damage to trust due to the lack of policy dialogues between the two countries from 2016 to last year ▲insufficient legal grounds for conventional weapons catch-all controls ▲weaknesses in Korea's export control personnel and organization. He also strongly urged the Japanese government to take concrete actions and measures to restore regulatory measures to the pre-export control level as of July 1 last year. Regarding this, a ministry official said, "Japan has not yet responded, but we believe our opinions have been sufficiently conveyed."

Professor Choi Won-mok of Ewha Womans University Law School said, "Since we have met the three partial conditions requested by Japan, the minister's demand for Japan to fully lift export controls is an act of turning the director-general working-level meeting into a 'Korea-Japan meeting'."

Since it is a working-level meeting, it is also expected that issues such as the 'forced labor compensation ruling' and 'cash conversion of Japanese war criminal assets' will not be brought to the negotiation table. A ministry official clearly stated, "This meeting is about strategic materials, so such topics will not be mentioned." Therefore, the minister's prior demand to Japan to "restore things to the state before July 1" is inevitably criticized as excessive.

Professor Choi said, "Issues related to the compensation ruling desired by Japan should be resolved by multiple ministries including the Ministry of Foreign Affairs, Ministry of Justice, and the National Assembly," adding, "Passing this to the Ministry of Trade, Industry and Energy, which is in charge of strategic materials, to conduct working-level negotiations and linking it to an overall 'Korea-Japan meeting' is an exaggeration."

Professor Heo said, "Since this dialogue is a working-level meeting, Korea is likely to maintain the status quo," and "Unless the director-general receives a clear government position and presents a progressive solution for negotiation, Japan will not be able to propose one either."

He added, "Japan will consider lifting export controls only if Korea raises the issue of cash conversion following the compensation ruling execution through a high-level meeting attended by ministers or special envoys from the Blue House," and "Rather than trying to make significant progress at the director-general meeting, it should be approached cautiously as a means to continue dialogue."

This content was produced with the assistance of AI translation services.