Japan decided to stop export restrictions on South Korea, marking the end of a four-year trade feud between the two countries.
During a cabinet meeting on June 27, Japan agreed to put South Korea back on its list of preferred export countries as a final step to restore economic relations back to normal.
The order, which will be promulgated on June 30 and enforced on July 21, is expected to end the reciprocal export restrictions that have lasted for the last four years.
In June 2019, Japan restricted exports of components essential to technology for semiconductors and smartphone screens, to South Korea.
Three key semiconductors components were switched from bulk to individual export licenses, requiring individual reviews for each export project. South Korea was also excluded from the list of preferred export countries that simplified trading procedures, such as controls to ensure goods are not used to develop weapons.
These export restrictions were seen as an unofficial retaliation foir a Korean Supreme Court order in 2018 ruling Japanese companies Nippon Steel and Mitsubishi Heavy Industries should compensate Korean victims of forced labor during WWII.
South Korea shares a bitter wartime history with Japan, which occupied the Korean peninsula from 1910 to 1945. And thousands of Koreans were mobilized as forced laborers for Japanese companies during WWII.
After Japan restricted its exports, South Korea reciprocated by filing a complaint to the World Trade Organization and excluded Japan from its list of favored exporters of strategic materials.
But tensions smoothed last March after a summit between the two countries amid regional security concerns with North Korea. South Korea released a plan to compensate victims of forced labor for which Japanese firms involved didn’t have to contribute.
South Korea suspended its complaint to the WTO during a bilateral export control policy dialogue and in April, it put Japan again as a preferred exporter. Thanks to this status, the export of strategic material is approved in five days instead of 15 days.
With the Cabinet order, South Korea will be back to the preferred exporters and Korean tech goods will be granted again the bulk export licenses.
Although the prime minister of Japan, Fumio Kishida, had said that the restoration of trade ties was a separate issue from the compensation for forced labor, both countries will soon resume their economic relations back to prior the Supreme Court order.
