Tue, 09 Jul 2019 13:35 - Updated Tue, 09 Jul 2019 13:47
Japan, South Korea raise the stakes in dispute over forced labor
TOKYO/SEOUL - Japan and South Korea raised the stakes on Tuesday in a diplomatic dispute that threatens to disrupt global supplies of smartphones and chips, with South Korea denouncing Japanese reports that it had transferred a key chemical to North Korea.
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South Korean flag
Photo: foto divulgação
At the root of the dispute between the U.S. allies is compensation for South Koreans forced to work for Japanese firms during World War Two.
It worsened last week when Japan said it would tighten curbs on exports of three materials crucial for advanced consumer electronics because trust with South Korea had been broken over the forced labor dispute.
The restrictions on exports of the material to South Korea could hit tech giants, such as Samsung Electronics (005930.KS) and SK Hynix (000660.KS), which supply chips to the likes of Apple (AAPL.O) and Huawei [HWT.UL].
It also underscores Japan’s grip on a vital link in the global supply chain that Prime Minister Shinzo Abe’s government is using as leverage days before a parliamentary election.
In some of the sharpest comments yet, South Korean Industry Minister Sung Yun-mo urged Japan to “stop making groundless claims immediately”, an apparent response to a Japanese media report last week.
Media quoted an unidentified senior member of Abe’s ruling Liberal Democratic Party (LDP) as saying some hydrogen fluoride exported to South Korea had ultimately been shipped to North Korea.
Hydrogen fluoride, a chemical covered by the Japanese export curbs, can be used in chemical weapons. Japan has said it has seen “inappropriate instances” of South Korea’s export controls, but has not elaborated.
Asked about countermeasures, Sung said South Korea was reviewing “every possible plan”, but gave no details. The neighbors plan to hold talks on Friday, he added.
The dispute stems from Japan’s frustration over what it sees as South Korea’s failure to act in response to a ruling by one of its courts last October ordering Japan’s Nippon Steel (5401.T) to compensate former forced laborers.
Japan says the issue of forced labor was fully settled in 1965 when the neighbors restored diplomatic ties.
The neighbors share a bitter history dating to Japan’s colonization of the Korean peninsula from 1910 to 1945, which saw forced use of labor by Japanese companies and the use of comfort women, a Japanese euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.
Politicians from both sides have at times over the years factored the lingering ill-will into their calculations.
The export curbs come weeks ahead of a July 21 upper house election that Abe’s Liberal Democratic Party (LDP) and its junior partner are expected to win with a solid majority.
“Unfortunately, the election is coming,” said one person familiar with the Japanese government’s thinking. “The LDP will do anything to solidify their support base.”
Lee Young-chae, a professor at Keisen University in Tokyo, also said politics seemed to be a factor.
“One issue that could lead to an election win seems to be rallying Abe’s conservatives and consolidating swing voters by showing an anti-South Korea, a tough stance toward South Korea,” Lee said.
“And it seems to be working.” REUTERS.
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