Japan and South Korea have committed to further discussions on their ongoing trade dispute following a 16-hour video conference call on March 17, 2020. The session marked the second round of high-level talks between the two nations, aimed at resolving Tokyo’s export restrictions on key industrial materials.
The lengthy meeting was conducted remotely due to the COVID-19 pandemic. During the call, both countries shared details about their respective export control systems. Yoichi Iida, who leads the trade control department at Japan’s trade ministry, stated that the two sides exchanged information and welcomed the progress each had made. South Korea’s Ministry of Trade, Industry and Energy released a statement noting that both nations gave positive feedback on each other’s plans to strengthen export control capabilities in terms of rules and policies.
Origins of the Trade Conflict
The dispute began in July 2019 when Japan imposed export controls on three materials: fluorinated polyimides, photoresists, and hydrogen fluoride. These substances are essential for manufacturing semiconductors and display panels, industries where South Korean companies such as Samsung and SK Hynix hold dominant positions.
Japan cited national security concerns, alleging that South Korea had mismanaged sensitive exports. South Korea viewed the move as economic retaliation for a separate legal dispute over wartime forced labor. In 2018, South Korea’s Supreme Court ordered Japanese companies to compensate Korean workers who were forced into labor during World War II. Japan argued that the issue had been settled under a 1965 treaty.
The situation escalated further in August 2019 when Japan removed South Korea from its “white list” of trusted trading partners, adding bureaucratic hurdles for South Korean companies importing a wider range of goods.
Security Concerns and US Involvement
Seoul initially threatened to withdraw from the General Security of Military Information Agreement with Japan, a pact that allowed both countries to share intelligence on North Korean missile threats. Such a move would have damaged trilateral security cooperation with the United States.
Washington intervened directly, urging both allies to preserve the agreement. South Korea suspended its withdrawal plan in November 2019, just hours before it was set to take effect. The US welcomed the decision as a sign of continued alliance stability.
Previous Talks and Next Steps
The first round of senior-level talks on export controls took place in Tokyo in December 2019, lasting about six hours. Both sides described it as constructive but reached no breakthrough. The second round in March 2020 lasted 16 hours, reflecting the complexity of the issues.
The two sides agreed to meet again in South Korea, though no date was set at the time of the announcement. Business analysts have warned that a prolonged trade conflict could disrupt high-end technology industries worldwide.
South Korea’s semiconductor sector supplies chips used in everything from smartphones to automobiles. Japan controls a significant share of the global market for the restricted materials. The dispute also carries political weight, with both governments facing domestic pressure to stand firm.
Japan’s ruling party has supported the export controls as a matter of national security, while South Korea’s government has framed the issue as a matter of economic sovereignty. Despite the tensions, both sides have kept diplomatic channels open.
The continuation of talks signals a willingness to find a negotiated solution rather than let the conflict escalate further. The outcome remains uncertain, but the fact that both nations are still talking offers a measure of hope for resolution. The trade dispute has tested the strength of their bilateral relationship and the broader US-led alliance system in East Asia.
Both countries share common security interests, particularly regarding North Korea, and their economies are deeply interdependent through the semiconductor supply chain. A permanent rupture would hurt both economies.
For now, the talks continue.
