JAPAN'S EXPORT RESTRICTIONS AND KOREA'S RESPONSES by KOCIS

Japan’s Export Restrictions and Korea’s RESPONSES

Publication Date: October 2019

Contents

1 KOREA'S RESOLVE Korean Government's Basic Stance on Export-Restrictive Measures by Japan - A new nation that cannot be shaken : Address by President Moon Jae-in on Korea’s 74th Liberation Day

2 Q&A Japan’s Export Restrictions and Korea’s Responses :

3 COLUMN Columns on Japan’s Export Restrictions

4 Infographics Excerpts from Articles on Japan's Export Restrictions - Fact Check

Japan’s Export Restrictions and Korea’s Responses

1 Korea's Resolve Korean Government's Basic Stance on Export-Restrictive Measures by Japan

Korean Government's Basic Stance On Export-Restrictive Measures By Japan

Facts Trade measures in question

The Ministry of Economy, Trade and Industry (METI) of Japan took export-restrictive measures without prior notice to or consultation with Korea. On July 1, METI announced that it will tighten its export requirements for shipments to Korea beginning from July 4 with regard to three key materials necessary for the production of semiconductors and display panels - i.e., fluorinated polyimide, resist and hydrogen fluoride. This means that comprehensive export licenses are no longer available for the exports of these three materials to Korea. Japanese exporters must apply for individual licenses to export them. On August 2, the Japanese Government decided to remove Korea from its Whitelist of countries eligible for comprehensive preferential treatment in the export process, which is due to take effect on August 28.

Ever-shifting reasons given by Japanese Government

Japan kept changing the reasons for taking such measures. For several days following its announcement on July 1, Japan cited the disputes over the wartime forced labor issue and the Claims Settlement Agreement of 1965 as a reason for announcing the measures. METI claimed that Korea had been undermining trust by not suggesting a solution to the wartime forced labor issue. A prominent Japanese politician talked

Agreement. On July 7, Japan urged Korea to comply with sanctions against North Korea, while some Japanese media outlets accused Korea of shipping hydrogen fluoride to North Korea, adding that the material could be used to produce chemical and nuclear weapons. On July 12, Japan claimed that there occurred incidents of inadequate export control in Korea, for which it did not provide any specific evidence. Japan also referred to absence of bilateral consultations for the past three years and certain loopholes in Korea’s catch-all regime, a part of the control system over strategic materials.

Korea’s solid regulatory framework for strategic materials control

Korea has an advanced control system over strategic materials, which is well acknowledged by the international community. According to the Washington-based Institute for Science and International Security (ISIS)’s assessment of global trade control systems over strategic materials, released on May 23, 2019, Korea is ranked 17th, while Japan is ranked 36th. Korea is a party to all four major international export control regimes - Nuclear Suppliers Group (NSG), Australia Group (AG), Missile Technology Control Regime (MTCR) and Wassenaar Arrangement (WA) - contributing to regional security by faithfully implementing its advanced trade control system. Korea has introduced and continues to enforce rigorous regulatory frameworks for control over conventional weapons trade, including the Foreign Trade Act, Public Notice on Trade of Strategic Items, and Special Measures for Restrictions on Trade for the Maintenance of International Peace and Security.

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

about Korea’s alleged breach of the 1965 Claims Settlement

Japan’s refusal to engage in dialogue

Japan has been rejecting Korea’s proposals to seek a diplomatic solution through dialogue and consultations. Korea proposed a joint-investigation involving experts of the UN Security Council on July 12. It also proposed bilateral consultation at the General Council Meeting of the WTO on July 24. Both of them were not accepted by Japan.

Negative ImpactS Bad precedent that threatens global trading system

Japan’s unilateral trade measures, that were intended to show discontent over longstanding bilateral historical issues, set a bad precedent jeopardizing the international free-trade regime. The multilateral trading system has been contributing to global economic growth by providing a rules-based framework and preventing unjustifiable arbitrary actions. The forced labor issue which Japan once cited in association with the abovementioned trade-restrictive measures does not fall under the national security exception of the WTO agreement. Furthermore, Japan’s measures run counter to the values it claims to uphold. Japan has argued so far that it supports the rules-based multilateral trading system at various multilateral fora including the WTO, G20, and APEC. The G20 Osaka Leaders’ Declaration orchestrated by Japan reiterated the principle of “realizing a free, fair, nondiscriminatory, transparent, predictable and stable trade environment”.

Japanâ&#x20AC;&#x2122;s export restrictions negatively impact the Korean industry in general by causing regulatory uncertainty and delays in shipments of certain important intermediate goods and materials. Some Korean industries which depend on Japanese materials could experience setbacks in production. What is more alarming is that these measures will have serious impacts on the entire global economy, going beyond the ICT sector, by disrupting the global supply chains. The production of such core items including semiconductors, display panels, general machineries, automobiles and petroleum products will be hampered. In particular, Korean DRAM semiconductors manufacturers will have to bear the brunt of the measures as they represented 73.4% in the global market as of 2018 Samsung Electronics 43.9%, SK Hynix 29.5%. Samsung and LG are two of the most reliable suppliers of display panels in the world. On July 23, six U.S.-based ICT Trade Associations - the Computing Technology Industry Association (CompTIA), Consumer Technology Association (CTA), Information Technology Industry Council (ITI), National Association of Manufacturers (NAM), Semiconductor Equipment and Materials International (SEMI) and Semiconductor Industry Association (SIA) - sent letters to the Korean and the Japanese Trade Ministers to express their concern regarding Japanâ&#x20AC;&#x2122;s export restrictions and to request a swift resolution of this issue.

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

Substantive damage to global supply chains

Unclear reasons and lack of evidence

Apart from its discontent over historical issues with Korea, Japan’s claimed rationale behind the measures is unclear even though the measures will have a serious impact on international trade. Japan has been inconsistent in providing reasons for taking these measures. The grounds for the measures have been shifting from “undermined trust between Korea and Japan” to “alleged illegal shipment of hydrogen fluoride to North Korea” and, most recently, to “loopholes in Korea’s catch-all controls over conventional weapons trade.” Japan has failed to offer any clear evidence to support these claims of alleged loopholes and inadequate cases of Korea’s export control in spite of Korea’s continued requests for details.

Serious detriment to bilateral cooperation and regional security

The trade measures in question and a series of actions by the Japanese government will pose a grave threat not only to the cooperation between Korea and Japan but also to security cooperation in Northeast Asia.

Korea’s Position It is deeply regrettable that Japan’s export- restrictive measures and its refusal to engage in consultations have exacerbated the situations and heightened tensions between Korea and Japan. Korea strongly requests Japan to immediately withdraw the recently introduced export restrictions, including the removal of Korea from its Whitelist. Korea is willing to discuss with Japan to explore diplomatic solutions to this issue. Korea and Japan are close neighbors that should cooperate with each other for peace and prosperity of Northeast Asia and the whole world. Korea calls on Japan to return to the negotiating table to halt this vicious circle and seek reasonable solutions. All members of the international community should be concerned over this issue and make efforts to prevent such politically motivated trade measures from spreading.

Japan’s False Arguments Concerning Reparation Claims and Unwarranted Restrictions on Exports to Korea

The Japanese Government is imposing export restrictions in violation of WTO agreements based on a false argument that Korea’s Supreme Court breached the Agreement on the Settlement of Problems Concerning Property and Claims and on Economic Cooperation between the Republic of Korea and Japan signed on June 22, 1965 (henceforth: the 1965 Claims Agreement).

The 2018 rulings by the Supreme Court of Korea were by no means in violation of the 1965 Claims Agreement. * Korea’s Supreme Court ruled that ‘the forced labor victims’ rights to claim reparations arising out of illegal activities of Japanese companies that constitute crimes against humanity that are directly related to Japan’s illegal colonial rule and its war of aggression’ had not been waived, as they had not been included within the scope of the 1965 Claims Agreement.

Individual victims still retain the right to claim damages with regard to unlawful acts of forced mobilization. * The 1965 Claims Agreement was concluded in accordance with Article 4 of the 1951 Treaty of Peace with Japan(San Francisco Peace Treaty), which provides that the disposition of property, claims and debts between the Republic of Korea and Japan shall be subject of a special arrangement between the two countries.

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

Japan's False Arguments

* Even though Chapter IV, Article 14 of 1951 San Francisco Peace Treaty stipulates that “the Allied Powers waive all reparations claims of the Allied Powers, other claims of the Allied Powers and their nationals arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war,” the Republic of Korea was an occupied country rather than a member of the Allied Powers at the time and thus did not sign this Treaty.

Japan’s argument that all reparations were settled is false. In the aftermath of World War II, the Japanese Government’s stance has been that the individual right to claim damages had not been waived. * On November 5, 1965, Etsusaburo Shiina, a former Minister of Foreign Affairs testified before the House of Representatives in the Diet that it was inappropriate to posit that individuals’ rights to claim reparations had been waived. On August 27, 1991, Shunji Yanai, a former Director General of the Treaties Bureau of the Foreign Ministry testified before the House of Councillors that the so-called individual right to claim damages itself had not been waived in the context of domestic laws.

Japan’s assertion that its export restrictions are unrelated to the issue of forced labor is not true, and its related statements keep shifting: * Japan’s flip-flopping : “Korea’s abandonment of its duty to honor an international agreement” (referring to the alleged breach of the 1965 Claims Agreement)” ► w hen its violation of WTO agreements became clear, Japan raised “security issues regarding unauthorized shipment of strategic materials to North Korea” ► claiming that such action forms “a part of the Japanese Government’s export control policy”

The Japanese Government is threatening the global economic order based upon free trade by unreasonably interfering in and putting pressure on a legitimate ruling by Koreaâ&#x20AC;&#x2122;s judiciary.

The Japanese Government must immediately revoke its measures that run counter to the spirit of free trade and waste no time in taking responsible actions to address the illegal act of forced mobilization. * Germany established its â&#x20AC;&#x153;Remembrance, Responsibility and Future Foundationâ&#x20AC;? in 2000 and issued apologies to the victims of forced labor and took appropriate measures.

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

A new nation that cannot be shaken :

Fellow Koreans, decorated patriots who dedicated themselves to the nationâ&#x20AC;&#x2122;s independence, their relatives and Korean compatriots abroad, As we mark the centenary of both the March First Independence Movement and the founding of the Provisional Government of the Republic of Korea this year, I find it particularly meaningful to hold the ceremony commemorating the 74th Liberation Day here at the Independence Hall of Korea. The Republic of Korea we see today was created by the indomitable spirit of our forefathers who fought for independence while refusing to buckle or give up in the face of any tribulation. Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

of a newly liberated nation. A new nation that cannot be shaken: it was the legitimate dream of a newly independent country that threw off the shackles of foreign invasion and rule. Today, I renew my commitment to meeting the aspirations of the people to build an unshakable nation by reminding myself of our people who have demonstrated remarkable resilience in the face of a series of crises.

Ignite the furnace, Let us extract wires, extend steel bars and flatten iron plates upon the heart of a new nation, Upon the foundation of cement, steel and hope Let us build a new nation that will not be shaken. -Kim kirim, Song For The New CountryAddress by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

Shortly after Korea gained independence, a poet sang out this dream

Within the international division of labor, if any country weaponizes a sector where it has a comparative advantage, the peaceful free trade order will inevitably suffer damages. A country that achieved growth first must not kick the ladder away while others are following in its footsteps. Better late than never: if Japan chooses the path of dialogue and cooperation, we will gladly join hands. We will strive with Japan to create an East Asia that engages in fair trade and cooperation. We will fulfill the responsibilities entrusted to us so that future generations in East Asia will be able to experience prosperity through cooperation.

Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

free trade order and facilitate equitable cooperation in East Asia. The miracle of economic development that Korea has achieved as well as the underlying strength can be shared with other countries, but they can never be taken away. When we retain a firm grip on our economic sovereignty, we will be able to stand firm as the master of our own destiny. If we do not belittle ourselves and encourage each other even while reflecting on our own shortcomings, I believe we will be able to pull it off. With a sense of responsibility befitting our economic strength, we will pursue broader cooperation and open up our markets even more and facilitate shared progress with neighboring countries.

Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

First, as a responsible economic powerhouse, we aim to uphold the

Second, we aim to build a country that serves as a bridge by taking the lead in promoting peace and prosperity on the continent and out in the ocean. In geopolitical terms, no other country in the world is surrounded by four major powers as we are. When Korea didnâ&#x20AC;&#x2122;t have much clout and was deemed insignificant, the Korean Peninsula was also cast to the periphery of the continent and ocean and was even reduced to an arena where global powers competed. This is the history that we had to endure. However, if we build a strong nation, we will be able to play a leading role in upholding peace and prosperity in Northeast Asia, connecting the continent with the ocean. The people-centered community of peace and prosperity that my government seeks to build is all about promoting peace and prosperity on the entire Korean Peninsula first and then spreading them to East Asia and the whole world.

Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

achieved through peace and also complete our liberation through the unification of the Peninsula. By overcoming the division of the Peninsula, we must transform the Korean peopleâ&#x20AC;&#x2122;s energy into a driving force for future prosperity. We will create new economic growth engines through the peace economy. We can no longer afford to let division consume our capacities. We will open the door to a new Korean Peninsula by pouring all we have into the peace economy. This will be possible if South and North Korea join forces and commit themselves to deciding the fate of the Korean Peninsula. When we overcome division, our liberation will finally be completed and Korea will become a country that cannot be shaken. Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

Third, we aim to establish a peace economy in which prosperity is

It has been one hundred years since the Provisional Government declared the founding of a democratic republic named the Republic of Korea. We have reflected on ourselves and matured over the past 100 years. We now have the confidence that we can prevail over any crisis. The peopleâ&#x20AC;&#x2122;s ability to achieve peace and prosperity on the Korean Peninsula has grown stronger. We can create a country that will not be shaken by anyone. The path that allows us to prevail over division and move toward peace and unification will be the royal road to becoming a responsible economic power. This is the road to overtaking Japan and guiding it toward a cooperative order in East Asia.

Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

1 Korean Government's Basic Stance on Export-Restrictive Measures by Japan

A new Korean Peninsula, one that will bring peace and prosperity to itself, East Asia and the world, awaits us. We can do it!

Address by President Moon Jae-in on Koreaâ&#x20AC;&#x2122;s 74th Liberation Day August 15, 2019

Japan’s Export Restrictions and Korea’s Responses

2 Q&A Japan’s Export Restrictions and Korea’s Responses :

What is the current status of Korea’s export control management system? ∙ Has Korea joined any international export control regimes? Have there

been any issues with compliance? ∙ How does the international community assess the operation of Korea’s

export control systems?

membership in international export control regimes and A1 Korea’s their implementation

Note: Export restrictions are applied through government-authorized export licenses for strategic items that must be restricted in the interest of preserving world peace as well as maintaining safety and ensuring national security. This policy is carried out in accordance with Article 19 of the Foreign Trade Act.

▪ Korea participates in four major international export control regimes* -1996 Wassenaar Arrangement (WA), the 1995 Nuclear Suppliers Group(NSG), the 1996 Australia Group (AG), and the 2001 Missile Technology Control Regime (MTCR)-and has adopted every catchall guideline recommended to the member states of these four organizations. * These four export control regimes cover trade in conventional arms, dual-use items and technologies.

▪ Korea’s export control system is based on stipulations in the Foreign Trade Act, the Public Notice on Trade of Strategic Items, and other related ordinances.

system operation ▪ Korea is a model participating state in all four of the major inter-national export control regimes of which it is a member. Korean operation of export controls has been highly evaluated internationally. ◦ Of the 81 agenda items proposed by the Wassenaar Arrangement Experts Group in 2018, 19 came from Korea, and 10 of those 19 were approved, proving Korea is a highly respected participating state. ▪ The U.S.-based Institute for Science and International Security recently ranked Korea 17th* in its Peddling Peril Index (PPI), which assesses nations on their control of trade in strategic items, including conventional weapons. ◦ Korea’s ranking has climbed steadily since 2017, while the ranking for Japan has fallen sharply over the past two years. * PPI Rankings Korea: 32nd (2017), 31st (2018), 17th (2019) Japan: 29th (2017), 28th (2018), 36th (2019)

2 Japan’s Export Restrictions and Korea’s Responses :

The international community’s assessment of Korea’s export control

Why has Japan imposed export restrictions on Korea? Are these retaliatory measures in response to Korea’s Supreme Court ruling on reparations for forced labor?

After the Court handed down its ruling on October 30, 2018, on reparations for Korean victims of forced labor, senior Japanese officials mentioned there would be retaliatory measures should their enterprises suffer damage.* * In reference to the expropriation of Japanese enterprises’ assets, a high-ranking Japanese official said: “Retaliatory measures will not be limited to tariff increases but will include various other measures such as suspending fund transfers and visa issuances.”

◦ Immediately after the present measures were taken, senior Japanese officials uttered remarks that hint at a connection with the ruling on compensation for forced labor. * “When promises are not kept between countries, it’s natural to assume that trade controls are also not being implemented properly.” (July 2, 2019)

▪ Moreover, the present measures were enforced without any prior consultation with the Korean Government, and Japan was unable to provide concrete facts or compelling grounds and continued to change the justification for the measures taken. ▪ In consideration of the remarks that have been made by leading figures on the Japanese side as well as the timing and methods of their actions, we judge their measures to be retaliatory in nature, starting from a backlash to the Supreme Court’s ruling. This is also how it has been reported by major overseas media outlets. (See note in Q10.)

Do problems exist in the Korean system, as claimed by Japan? ∙ Japan has said that problems exist with Korea’s catch-all controls and their

implementation. Is that true? ∙ Has Korea not consulted or exchanged views with Japan, despite Japanese

requests, for the past three years, as the Japanese side asserts? ∙ Do problems arise from a lack of administrative personnel or the sharing

of responsibilities by the various Korean Government organizations tasked with export control?

Korea’s system of catch-all controls Note: The system requires government licenses for exporting goods that have a high potential for diversion, for use as WMDs or other purposes, even if they are not classified as strategic materials.

▪ Korea has a regulatory framework of catch-all controls that cover goods with a high potential for diversion to use in the development, production, storage or use of both conventional weapons and weapons of mass destruction. ◦ Korea reflects in its regulations and applies all the catch-all guidelines recommended by the four major international export control regimes in which it participates. ◦ Importantly, the catch-all controls on conventional weapons are implemented based on the Public Notice on Special Measures for Trade and other regulations in order to fulfill obligations under the Foreign Trade Act and Public Notice on Trade of Strategic Items, as well as to preserve world peace and security.

2 Japan’s Export Restrictions and Korea’s Responses :

▪ Therefore, Japan’s linking the issue of catch-all controls with its present measures is unexpected; moreover, Japan had never indicated that problems existed with Korea’s catch-all controls previously. ◦ The Japanese side did not raise the Korean catch-all controls as an issue during discussions on holding consultations between the Korean and Japanese export control authorities at the bureau chief level regarding the export control of strategic materials. This fact raises further doubts with respect to the basis for Japan’s measures. Communication, consultation with Japan ▪ Japan’s assertion is false that no consultations or exchanges of views have occurred for three years. ▪ Japan seems to view the lack of a consultation on export control of strategic materials between the Korean and Japanese export control authorities as a problem, yet… ◦ Korea hosted the 6th Consultation on Export Controls in June 2016. Japan was to host the 7th meeting, yet Japan waited one year and eight months–until March 2018–before proposing a schedule to the Korean side. ◦ After Japan proposed in March 2018 that the 7th consultation be held, the two sides were unable to adjust the schedule to mutual satisfaction. They both agreed on the need to hold such a consultation after March 2019, but since then the host, the Japanese side, has not made any particular contact on the matter. ▪ Linking a problem concerning the reliability of the Republic of Korea (ROK)’s export control system with the inability to open the latest round of consultations is an unreasonable claim that ties measures of truly great consequence to a simple scheduling conflict. ▪ Meanwhile, opportunities for information exchange have not been cut off. The ROK and Japan have shared information and worked together on export controls on various occasions such as seminars or conferences held in each country.*

Trade and Industry (METI), with the ROK in attendance since 2012), conferences on implementation of U.N. Security Council Resolutions (with Japan’s METI also in attendance 2016 and 2018), the Australia Group annual plenary meeting, among others

Cooperation between export control personnel and licensing authorities ▪ The ROK has 110 dedicated export control officers–not much different from the number of officials who work in Japan’s METI–and they perform their work properly and efficiently. ◦ In addition, the work of the ROK’s export control administration is divided among the Ministry of Trade, Industry and Energy (MTIE); the Defense Acquisition Program Administration (DAPA); and Nuclear Safety and Security Commission (NSSC)–each specialized in their respective areas.* * MTIE (strategic materials used in industry); NSSC (specialized in the nuclear power industry); and DAPA (materials and items for military use)

- The Korea Strategic Trade Institute (KOSTI) and Korea Institute of Nuclear Nonproliferation and Control (KINAC) are also public institutions legally required to conduct specialized export controls, and they perform their work in cooperation with the various government ministries and agencies. ▪ The United States, like the ROK, also has decided on a decentralized approach; export management systems are operated in accordance with the circumstances for each country.

2 Japan’s Export Restrictions and Korea’s Responses :

* Asia Export Control Seminar (hosted annually by Japan’s Ministry of Economy,

Is it not true, as Japan's claims, that its export measures are not discriminatory and have no real impact other than more complicated procedures? ∙ Japan says that Korea—even though it has been removed from their

whitelist of preferred trading partners—will merely find itself on the same level as other Asian countries. If so, is that a problem? ∙ Japan’s position is that there is no serious problem because among the

three industrial materials subject to export restrictions, individual licenses have already been approved for two of them: EUV resist and hydrogen fluoride. Is this true?

A4 Discriminatory features

▪ The ROK first satisfied the requirements* for designation on Japan’s whitelist in 2004 and remained so listed for 15 years. The present removal of Korea from the whitelist is unfair as it discriminates against Korea inncomparison with other nations that have satisfied these conditions. * The ROK and Japan are the only two countries in Asia to 1) be in four major international export control regimes (WA, MTCR, NSG, AG); 2) have signed three major treaties—the Non-Proliferation Treaty, Chemical Weapons Convention, Biological Weapons Convention; and 3) run catch-all controls.

◦ Currently, the ROK participates in four major international export control regimes, is a party to three major treaties, and has implemented robust catch-all controls; the ROK is recognized by the international community as an exemplary country in the management of strategic materials. ◦ In May 2019, the U.S.-based Institute for Science and International

200 nations on their control of trade in strategic items, and the ROK was ranked 17th, while Japan came in 36th. ◦ Previously (in March 2011), Japan’s Center for Information on Security Trade Controls (CISTEC) gave positive marks to the ROK with respect to its system for judging strategic materials, its online export license system, and online strategic materials control system (Yestrade). ▪ Importantly, Japan allows a single general license for exports to other nations in Asia that covers all three key industrial materials used in semiconductor and display production, while it requires exporters to Korea to obtain three separate licenses for each item.* Thus, while the ROK practices exemplary export controls, it is being unfairly discriminated against. * Japanese exporters in the compliance program are allowed to export the three key industrial materials under an open general license to some countries that do not participate in all four of the major international export control regimes.

▪ Moreover, this measure to exclude the ROK from Japan’s whitelist was enacted without any prior consultation and without offering sufficient grounds for the action. Considering that Korea was targeted on this occasion, chances are great that Japan’s export control system going forward will be applied non-transparently, unpredictably and in a manner that discriminates against Korea. Problems with the continuation of individual licenses ▪ Business sources say the Japanese Government’s export licenses for photoresist and hydrogen fluoride were issued last August. ▪ However, real problems now exist because 1) the uncertainty over the future supply of the items themselves has spread widely, considering Korea’s removal from the whitelist as well as the non-transparency and unpredictability of the process of taking measures regarding the three key industrial materials; and 2) complex procedures, delays and other problems are raising costs.

2 Japan’s Export Restrictions and Korea’s Responses :

Security released its annual Peddling Peril Index (PPI), which ranks

How did Japan violate the WTO Agreement? How will a complaint be lodged?

∙ Which specific WTO rule has Japan violated? ∙ Won’t complaint settlement take a long time? ∙ Will it be effective?

of WTO Agreement violation A5 Evidence ▪

Article 11 of the WTO’s General Agreement on Tariffs and Trade stipulates that export restrictions such as export licenses are prohibited in principle. At the same time, discriminatory measures taken by individual countries on export procedures essentially violate the principle of most favored nation in Article 1 of GATT.

▪ Conditions for security exceptions (Article 21) must be met in the GATT rules before a violation of standard principles can be accepted, but the present measures have much more to do with arbitrary measures based on the 1965 Korea-Japan Claims Settlement Agreement and other historical disputes than any security matter. Thus, the exception will not be accepted on security grounds. WTO complaint procedures ▪ Settling a complaint according to WTO rules requires about 15 months just to reach a judgment from the first proceeding. The length of time may be shorter or longer depending upon the dispute in question. ▪ To file a complaint with the WTO, the complainant must submit a written request for bilateral consultation to the respondent, indicating the violations of the WTO Agreement. ◦ On September 11, the Korean Government filed a complaint with the WTO regarding the export restrictions imposed by Japan on three key

◦ Once the complaint has been lodged, the two parties to the dispute will conduct bilateral consultations, and if a mutually agreed solution cannot be reached, the Dispute Settlement Body (DSB) establishes a panel, which produces a panel report and circulates it to WTO member countries. If the parties to the dispute do not appeal the ruling of the report, the ruling is adopted by the DSB. Should either party to the dispute appeal the ruling, the WTO Appellate Body conducts another hearing, produces an appellate report and circulates it.

Summary of WTO dispute settlement procedures Written request for bilateral consultations dispatched (complaint lodged)→ bilateral consultations held → panel established → panel composition finalized → panel hearing conducted → panel report circulated → report adopted or appealed → appellate report circulated

Effectiveness of WTO dispute settlement procedures ▪ A complaint filed with the WTO will confirm internationally that the Japanese measures violated the WTO Agreement. It is an effective means of preventing similar measures from being taken in the future. ▪ Once the complaint is filed with the WTO, an international consensus is expected to be formed during the dispute process with respect to the unfairness of the Japanese measures. ▪ The terms for two of the three current members of the WTO Appellate Body will expire at the end of this year, causing some alarm, but now lively debate is taking place at the WTO to avoid a suspension of the Appellate Body’s function. Therefore, it is difficult to predict the likelihood of a suspension at year’s end.

2 Japan’s Export Restrictions and Korea’s Responses :

industrial materials for semiconductor and display production.

Does Korea’s amending of its Public Notice on Trade of Strategic Items to remove Japan from its whitelist constitute reciprocal measures against those taken by Japan?

A6 ▪ Japan recently has adopted a system that does not correspond with the principle of international export control regimes, and the Korean

Government has currently proposed amendment to the Public Notice to subdivide the “A” region classification into “A-1” and “A-2.” ▪ Therefore, the Korean Government’s measures would not be reciprocal with respect to the Japanese measures. These measures are meant to improve the domestic export control system within the framework of the international system in order to accord fittingly with the basic principles of international export control regimes.

Note: According to the basic principles of international export control regimes, the export control systems aim at international security and regional stability.

Currently, participating countries in the four major international export control regimes are classified as “A” regions among the areas to which export licenses for strategic materials are issued. Under the amendment, an “A-2” region classification will be established, and this classification will be assigned to participants in the four major international export control regimes that do not adhere sufficiently to the principles of international export controls.

Will Japan’s export restrictions substantially affect Korea’s economy and industries?

∙ What are the Korean Government’s countermeasures?

A7 The impact on the Korean economy and industries

▪ The Japanese Government removed Korea from its whitelist starting from August 28, requiring Japanese exporters to obtain individual licenses to export strategic materials. ◦ Compared to the open general licenses that were in use before the measures took effect, the individual licenses require greater paperwork and longer time to process. Should individual licenses be delayed for those items upon which Korean companies are highly dependent on Japanese sourcing, then production disruptions and other negative effects are expected. ▪ U.S.-based ICT companies and major international news outlets have expressed concern that the Japanese measures will seriously impact the global supply chains for semiconductors as well as smart phones and electronic products going forward. Korean Government’s countermeasures ▪ The Korean Government is implementing various countermeasures to minimize damage to Korean enterprises. ▪ Supply response support centers are providing relief by monitoring inventory levels, diversifying import channels, and removing bottlenecks for production facility expansion and new construction with regard to 159 items deemed essential. ◦ O n Au g u s t 5 , t h e g o v e r n m e n t a n n o u n c e d c o m p e t i t i v e n e s s strengthening measures for parts, materials and equipment with

2 Japan’s Export Restrictions and Korea’s Responses :

regard to 100 key items upon which Korean manufacturers rely most heavily on Japanese sources. These measures will help Korean companies to diversify the countries from which they import, engage in intensive short-term development projects, expand domestic production facilities, and be involved in technology tie-ups as well as mergers and acquisitions. Other multi-faceted supports will also be provided to stabilize the supply network.

Does the Supreme Court’s ruling on compensation for victims of forced labor put Korea in violation of international law? ∙ How does the Korean Government stand on the Supreme Court’s

interpretation of the Claims Settlement Agreement?

October 2018, the Korean Supreme Court ruled that the KoreaA8 ▪ InJapan Claims Settlement Agreement of 1965 did not settle the issue of reparations for crimes against humanity and that the accused Japanese corporations were responsible for paying compensation to the victims of forced labor. Note: The Korea-Japan Claims Settlement Agreement that went into effect on December 18, 1965, dealt with 1) the assets, rights and interests of both nations as well as both peoples; and 2) the issue of the right to make claims between the two nations and the two peoples.

2 Japan’s Export Restrictions and Korea’s Responses :

The essential points of the Supreme Court’s ruling on forced labor (October 30, 2018): The victims of forced labor have the right to claim reparations from Japanese corporations for damage incurred. This right to claim compensation is premised upon the crimes against humanity committed by Japanese corporations, which were directly associated with the Japanese Government’s illegal colonization of the Korean Peninsula and execution of a war of aggression. Hence, it is not included in the subjects of application under the Korea-Japan Claims Settlement Agreement. ▪ Therefore, the Supreme Court’s ruling does not repudiate the KoreaJapan Claims Settlement Agreement, but rather clarifies its intended targets and scope. ▪ Korea is a democratic country that embraces the separation of legislative, executive and judicial powers as a core value, and the government respects the judgment of the judicial branch.

Is Korea willing to engage in dialogue with Japan? Going forward, how will Korea proceed with consultations with Japan? ∙ Do private sector exchanges have to be curtailed in the face of Japan’s

retaliatory measures?

position is that the issues must be resolved through dialogue, A9 ▪ Our including discussions on various approaches that can be accepted by the peoples of both countries and the victims. ▪ On June 19, the ROK announced a reasoned approach for settling the issue of forced labor, and this message has already been conveyed to Japan. Korea will continue to make efforts to convince Japan to respond positively to resolving the issue through dialogue. Private sector exchanges ▪ The continuation of private sector and local government exchanges is desirable, for they are the basis for building a forward-looking KoreaJapan relationship. ▪ Once Japan withdraws its unilateral, arbitrary and retaliatory economic measures against Korea, exchanges are expected to resume and develop further.

2 Japan’s Export Restrictions and Korea’s Responses :

Q10

What diplomatic efforts are being made by the Korean Government with respect to Japan’s export restrictions? ∙ What efforts are directed at the United States and what has been the U.S.

response?

A10

▪ The unfairness of Japan’s measures and the negative effect they are having on the world trade order are being explained whenever an opportunity arises via bilateral channels with the United States and other major nations as well as via multilateral channels such as the WTO. ◦ Going forward, efforts will be made at every opportunity through multilateral conferences such as the WTO and bilateral meetings to expand consensus within the international community over the unfairness of Japan’s measures. ▪ Above all else, our focus will be on explaining that: 1) Japan’s measures are a form of economic retaliation for a judicial ruling, 2) the negative effects will be felt in the global supply chains and world trade, and 3) the measures are not in line with the principles of the WTO and Wassenaar Arrangement. ▪ Most countries are concerned about the continuation of bilateral disputes and hope for rapid resolution through dialogue. Many countries also acknowledge the Korean Government’s resolve to settle disputes through dialogue. ◦ Several countries agree that Japan’s measures have an adverse effect on the order of multilateral trade, and they fear that unilateralism will spread. ◦ Some nations worry that Japan’s measures will cause harm not only to the regional supply chains but also to their own economies.

responsibility as a major supplier of materials. ▪ A number of major foreign newspapers have reported that Japan’s measures are in retaliation for the forced labor ruling and have expressed concerns over the effects on the world economy. # Reports by major overseas newspapers - NYT, Japan cites ‘national security’ in free trade crackdown (July 15) - WSJ, Protectionist Diplomacy Goes Global (August 3) - Foreign Policy, Japan started a war it wasn’t ready to fight (August 6) - WP, How Japan’s failure to atone for past sins threatens the global economy (August 11)

Outreach to the United States ▪ The Korean position is being presented through various means, including visits by senior Korean officials, to explain the unfairness of the Japanese measures and their negative effects on the global economy. The targets of these briefings include the U.S. Executive Branch, Congress, thinktanks and other specialized groups, major newspapers and other opinion leaders. ▪ The United States understands Korea’s position clearly and realizes the need for cooperation between its allies, Korea and Japan, in the interest of regional peace and stability. Thus, the U.S. position is to do what it can to resolve the dispute. ◦ U.S. businesses have also begun to feel the effects of the Japanese measures. In response, they are raising their voices to prevent the situation from getting worse. * Six organizations–the Semiconductor Industry Association (SIA), Information Technology Industry Council (ITIC), National Association of Manufacturers (NAM), SEMI (formerly Semiconductor Equipment and Materials International), CompTIA (IT Industry), and Consumer Technology Association (CTA)–have sent a co-signed letter to the governments of Korea and Japan.

2 Japan’s Export Restrictions and Korea’s Responses :

They have also expressed the opinion that Japan must accept its global

Japan’s Export Restrictions and Korea’s Responses

3 Column Columns on Japanâ&#x20AC;&#x2122;s Export Restrictions

Japan's policy toward Korean Peninsula faces major turning point May 06, 2019 By Yuji Hosaka Professor, Sejong University

Japan's policy toward the Korean Peninsula is composed of three stages, the first of which began with the Japan–Korea Treaty of 1876. The second was Japan's defeat of China in the Sino-Japanese War (1894-95) and subsequent blocking of Chinese influence on the peninsula. In the third stage, Japan colonized the peninsula and got rid of Russia's presence there after winning the Russo-Japanese War (1904-05) based on the Taft–Katsura agreement between the U.S. and Japan. So is Tokyo continuing to implement the same policy toward the Korean Peninsula today? In December 2013, the Abe administration adopted the so-called National Security Strategy of Japan, which said, “To Japan, South Korea is an important region from a geopolitical perspective to resolve issues involving North Korea and China.” Geopolitics is the study of how a country's geographical location influences politics and international relations. Nations such as the U.K., Germany and the U.S. have studied the field to find scientific proof and justifications for their respective national strategies. The 18th-century German philosopher Immanuel Kant (1724-1804) was the first to study geopolitics in a systematic method under the title “political geography.” The concept of political geography was eventually expanded in Germany, and the subject of geopolitics later became continental geopolitics. The basic logic of geopolitics in its early stage said, “A country is a highly developed organism and should attempt to expand its territory for survival,” which justified a nation's territorial invasion of other states. It also supported imperialism by saying, “A country is dependent on its territory, and power is the first requirement for its survival before law.”

(1861–1947) devised his heartland theory, referring to a territory two-thirds of which was ruled by Russia and China. His theory said world powers intended to rule the “heartland” or “pivot area,” and the one that succeeded would rule the world. He also predicted that control of Eastern Europe, which was key to the rule of the heartland, would result in rule of the “world island,” namely Europe, Asia and Africa. Nazi leader Adolf Hitler (1889-1945) put this theory into action by invading Poland and waging war on Russia (1941-45). Though Hitler ultimately failed, this became an important case of geopolitics. In the U.S., political scientist Nicholas J. Spykman (1893-1943) came up with his Rimland theory that said, “The one who controls the Rimland, the strip of coastal land (that encircles Eurasia), will govern Eurasia and the fate of the world.” He advised Washington to form an alliance with key countries in the Rimland, which he said contained invasion routes into the heart of the world. His theory served as the rationale for the trilateral alliance of the U.S., U.K. and Japan at the time of the RussoJapanese War as well as America's bilateral alliances with Korea and Japan. Spykman also believed that the U.S. should prevent a country from becoming a superpower in the Rimland to prevent the blocking of invasion routes. Washington followed his advice by defeating Japan in the Pacific theater (1941-45) of World War II, and his theories and works still hold major influence over U.S. strategies. Japan, another avid student of geopolitics as a maritime power, has always worked with the U.S. Both countries have had their eyes on the Eurasian continent. The Pacific theater of the Second World War was the only time the two sides fought each other. In Japan, the faction of the Choshu Domain (a territory that is now Yamaguchi Prefecture) played a prominent role in the country until 1945, as imperial Japan concentrated on invasions and wars on the Korean Peninsula and in China. Many highprofile Japanese figures hailed from this faction including statesman Ito Hirobumi; Miura Goro, a lieutenant general who led the assassination of Empress Myeongseong of the Korean Empire; Masatake Terauchi, the first resident general of Joseon; and Count Hasegawa Yoshimichi, a field marshal who served as the second resident general of

3 Columns on Japan’s Export Restrictions

Influenced by German geopolitics, British geographer Sir Halford John Mackinder

Korea and brutally suppressed the March First Independence Movement in 1919. After World War II ended, the faction formed the predominant party system in Japan. Among faction members are former Japanese Prime Minister Nobusuke Kishi, a suspected A-list war criminal, and incumbent Prime Minister Shinzo Abe. Both did not originate from the conservative mainstream. Since World War II, the conservative mainstream in Japan has recognized the San Francisco regime, which was formed after the U.S. and Japan signed the San Francisco Peace Treaty in 1951 to build a peace regime in East Asia and consider Japan a former invading country with an apologetic attitude toward its neighboring countries. Today, the Abe administration has stuck to the old mindset of the Choshu Domain as an imitator of a collateral line of conservatives. Under this mentality, the administration could thus be said to seek putting Korea under Japanese influence. On the issues of abduction and sexual slavery of Korean women and forced Korean laborers before and during World War II and the recent dispute over patrol planes in neighboring waters, the Abe administration has never accepted Korea's contentions and instead blames Seoul for violating international law. This is because Tokyo cannot accept a situation in which Korea influences Japan. If both Koreas set up a system of peaceful coexistence, Japan will inevitably have to change its policy toward the Korean Peninsula, which is based on the logic of the Choshu Domain faction. The essence of bilateral relations today lies in the so-called transitional collision between Korea's dynamic rise and Japan's outdated policy that cannot accept Korea's ascension. Thus if the inter-Korean peace process goes smoothly despite its ups and downs, Japan's policy toward the peninsula will face a big transformation. Yuji Hosaka teaches political science at Sejong University in Seoul. As a naturalized Korean of Japanese descent, he is also director of the Dokdo Research Institute. Translated by Korea.net Staff Writer Yoon Sojung

Legitimacy of Korean Supreme Court’s verdict on former forced laborers

3 Columns on Japan’s Export Restrictions

Jul 09, 2019 By Yuji Hosaka Professor, Sejong University

In October last year, the Korean Supreme Court ordered the Japanese company Nippon Steel, (formerly known as Nippon Steel & Sumitomo Metal Corp.), to pay KRW 100 million each to four Koreans who were forced to work for the company during Japanese colonial rule of the Korean Peninsula. A series of similar court rulings has since followed. Both Japan's government and the ruling Liberal Democratic Party have argued that the verdict violates international law as the Korea-Japan Claims Settlement Agreement, attached to the 1965 treaty that normalized bilateral relations, stipulated that the right to file claims by either country or its people had been permanently resolved. In 1991, however, the Japanese government admitted twice in the Japanese Diet that an individual’s right to file a claim had not been terminated despite bilateral agreements like the 1965 treaty. At the time, Yanai Shunji, director of the Japanese Foreign Ministry's Treaties Bureau, said an individual’s right to file a claim “was not terminated” when asked in parliament if a Japanese national could file a claim for assets he or she left in an area overseas that Japan had colonized. Shunji added that what was terminated was the country’s diplomatic right to protect its individuals, supporting the Japanese people's right to claim property they left overseas during the Japanese colonial era. This logic is in line with the latest court ruling in Korea because a Korean still

retains the right to file a claim and sue for compensation or damages. Yet Japan is hindering its companies from making their own free decisions, saying they should not follow the verdict of the Korean Supreme Court. Furthermore, Tokyo has threatened Seoul with retaliatory measures if the latter seizes the Korea-based assets of the Japanese companies in question to award compensation to the victims. When the first verdict was upheld last year in Korea, Japanese Foreign Minister Taro Kono told reporters that a victimâ&#x20AC;&#x2122;s individual right to file a claim right had not expired. Later, he changed his stance by blaming the problem on the Korean government, insisting that Seoul violated the agreement on a permanent solution reached through the 1965 bilateral treaty. This proves that Tokyoâ&#x20AC;&#x2122;s argument is nothing but merely its stubborn stance. As the Japanese government in 1991 said an individualâ&#x20AC;&#x2122;s right to file a claim was not terminated according to the 1965 treaty, either a Korean or Japanese today can exercise their right to claim properties and ask for compensation and damages for mental and psychological damage suffered. Despite Tokyo's official answer in 1991, no Japanese has regained his or her assets in Korea. This is because the Japanese people believe that their country's colonization of Korea was unlawful and that they could not get their assets back even if they filed a lawsuit to that end. The Korea-Japan Joint Declaration, signed in October 1998 by Korean President Kim Dae-jung and Japanese Prime Minister Keizo Obuchi, officially expressed Tokyo's apology for the damage and suffering suffered by Korea because of Japan. This agreement proved that Japanese colonization of the Korean Peninsula was an unlawful act. When Japan gave money to Korea through the 1965 treaty, the amount was considered damages. Compensation is money paid to a victim who suffers from damage caused by a legal act. If Japanese colonization of the peninsula was illegal, Japan must pay damages for this illegal act. The money

damages, and Japan has yet to pay any reparations to Korea. Japan has reacted sensitively to this issue because if it keeps quiet about the latest Korean ruling, this means Tokyo acknowledges its colonization of Korea as an illegal act. If so, this will put Japan in unfavorable circumstances and could lead to damages being paid to North Korea if both nations normalize ties. This could explain Tokyo’s inconsistent political offensive. The ruling by the Korean Supreme Court is legally justified. The Japanese government must stop unfairly intervening in its companies' affairs in the name of mobilizing the nation’s right to protect itself, which was initially terminated in 1965. Korea should also further inform its people and the world about the justification of its latest verdict. Yuji Hosaka teaches political science at Sejong University in Seoul. As a naturalized Korean of Japanese descent, he is also director of the Dokdo Research Institute. Translated by Korea.net Staff Writer Yoon Sojung

3 Columns on Japan’s Export Restrictions

the Korean Supreme Court has ordered Nippon Steel to pay is consolation or

Japan's economic sanctions on Korea: part of a phased plan Jul 19, 2019 The following op-ed was written by Yuji Hosaka, professor of Sejong University in Seoul, and published by The Diplomat on July 19, 2019. Korea.net has received the author's permission to publish his article.

By Yuji Hosaka Professor, Sejong University

The relationship between Korea and Japan has considerably deteriorated. It took another turn for the worst on July 4, when the Japanese government excluded Korea from the â&#x20AC;&#x153;list of trustworthy (export) countriesâ&#x20AC;? and took economic retaliatory measures in response to a Korean Supreme Court decision ordering a Japanese corporation to pay compensation to surviving Korean victims of forced labor during Japanese colonial rule of the Korean Peninsula. Bilateral relations have continued to go downhill with a growing consumer campaign in Korea to boycott Japanese products and Korean tourists canceling trips to Japan. Japan is blaming Korea for such worsening ties, claiming the row occurred because of Seoul's passive attitude toward resolving the issue of the ruling on the forced labor victims. So is Japan right? Regarding this situation, an article recently republished by the online edition of Bunshun, a media outlet run by the Japanese monthly magazine Bungeishunju, has grabbed attention. This article was originally published on Nov. 21, 2013, by The Shukan Bunsyun, a weekly magazine published by Bunshun's publisher and parent company Bungeishunju.

The article said the Abe administration prepared retaliatory action against Korea as far back as six years ago, when Park Geun-hye was president of Korea. She rejected Japanese Prime Minister Shinzo Abe's request to hold a bilateral summit from 2013 to 2015. At the time, the comfort women problem was the most crucial issue between Seoul and Tokyo. Given Japan's â&#x20AC;&#x153;insultingâ&#x20AC;? attitude toward the issue, Park continued to strongly criticize the Japanese government through every possible opportunity, including interviews with foreign media and summits with other heads of state. As such, the article said the Abe administration planned to inflict more damage on the Korean government through retaliatory measures in economy and public relations. At the time, the Japanese government mainly focused on hurting the Korean economy through a policy of selling the KRW to get it to appreciate. Another Japanese strategy was to bolster its PR campaign to boost Japan's territorial claim to the disputed Dokdo Islands and position on the comfort women. This article mentioned several retaliatory measures proposed by Koichi Hagiuda, Japan's incumbent minister of education, culture, sports, science and technology and a leading figure in the setup of such measures against Korea, including the latest export restrictions on strategic materials. According to the article, the Abe administration clearly began from the Park Geun-hye government to take retaliatory actions if Seoul criticized Tokyo and publicized to the world issues crucial to bilateral relations. So wouldn't bilateral relations improve if the Korean government communicated well with its Japanese counterpart and made diplomatic concessions? This is possible. In this scenario, Seoul would have no choice but to make many concessions and accept Japan's claims on pending bilateral issues, including sovereignty over Dokdo, the comfort women and forced labor victims. The Abe administration is from a fringe group among Japan's mainstream conservatives in that it denies past Japanese aggression and argues that the

3 Columns on Japanâ&#x20AC;&#x2122;s Export Restrictions

Ready-made economic sanctions on Korea

Pacific War was a “war for Asian liberation against white rule.” Members also insist that the comfort women system was legitimate, deny that any discrimination against Koreans occurred during the colonial period, and argue that the mobilization of Korean laborers was both lawful with no illegal actions committed. Thus Korea will need to make considerable concessions to persuade the Abe administration to do the same in bilateral relations. A leading example in this regard is the Korea-Japan Comfort Women Agreement signed by both countries on Dec. 28, 2015. Under this accord, both sides said the comfort women issue was resolved in a “final and irreversible manner.” Though Japan gave JPY 1 billion to the Korean government, it refused to admit any wrongdoing. The sum was considered consolation money paid on humanitarian grounds but constituted neither compensation nor damages; the money was just an apology for the pain caused under “the legitimate situation” of the comfort women system. What the victims truly wanted, however, was a proper apology from Prime Minister Abe and Japan's acknowledgement that its mobilization of such women was an unlawful act. But Abe, despite his government agreeing to the payout, never admitted that the running of the comfort women system was an unlawful act committed by the Japanese military. Because of this, the Abe administration finds it difficult to accept the Korean court's ruling that ordered a Japanese corporation to pay compensation to forced labor victims. Even if Korea exerted numerous diplomatic efforts, Japan would still take retaliatory action so long as Seoul upheld the verdict. For this reason, the Korean government's lack of early effort to reach a diplomatic solution to the issue cannot be considered a critical factor that deteriorated Korean-Japanese relations. Japan chose to give up on diplomacy Since June this year, the Korean government has been asking Japan to hold summit talks between President Moon Jae-in and Prime Minister Abe. It was Tokyo that rejected Seoul's request. During the G-20 summit in Osaka last month, Abe held meetings with all participating heads of state except President Moon.

economic sanctions on Korea. In the end, the Japanese government was the one to ultimately give up on diplomatic dialogue efforts with Korea. Along with Hagiuda, Itsunori Onodera, chairman of the Liberal Democratic Party's(LDP) Research Commission on Security, is insisting on the legitimacy of Japan's retaliatory action through media outlets. At an LDP lecture on June 10, Onodera said, “It's hard to improve Korean-Japanese relations with the incumbent Korean government. It will be possible only after the administration changes in Korea. For now, ignoring the Moon administration is the best policy.” This seems to be about the time when Japan decided to take retaliatory measures. The Japanese government denies that its latest actions are retaliatory, saying it simply lifted preferential measures for Korea because “inappropriate cases” occurred among its export items to Korea. Japan, however, has shown no proof to back this “inappropriate cases” allegation, which refers to unauthorized exports or leaks of strategic materials to North Korea. Instead, quite a few reports say Japan is the one that exported strategic materials to the North. Lawsuits between individuals and companies The Japanese government also needs to objectively think about the recent Korean court ruling in favor of former forced Korean laborers, which is considered the main cause of the retaliatory measures. This is because in 1991, Yanai Shunji, then director general of the Japanese Foreign Ministry's Treaties Bureau, said three times when asked in parliament that an individual’s right to file a claim “was not terminated” and what was terminated was the country’s right to protect its individuals. Since this comment was made, Korean victims have filed lawsuits in Japan. In 2000, Korean women forced to work at Japanese munitions factories and for machinery manufacturer Nachi-Fujikoshi Corp. even settled their lawsuit at the Japanese Supreme Court. This proves that Japan recognizes an individual's right to file a claim. When the Japanese Diet discussed this issue on Nov. 14, 2018, the Japanese government reaffirmed that an individual's right to file a claim remained and that this issue needed checking with a court as the reparations

3 Columns on Japan’s Export Restrictions

Two days after the G-20 summit ended, Japan declared that it would impose

matter was not included in the 1965 Korea-Japan Claims Settlement Agreement. This comment was thus a de facto recognition of the Korean Supreme Court verdict. The Abe administration, however, has done little to reach a real resolution on this issue while accusing the Korean government of breaking its promises. Under the Korea-Japan Claims Settlement Agreement under the 1965 treaty that normalized bilateral relations, Japan paid only compensation for properties including outstanding payments or debts. Tokyo did not compensate for unlawful acts suffered by Koreans during Japanese colonial rule such as discrimination, â&#x20AC;&#x153;insulting actsâ&#x20AC;? or physical persecution. Whether Japan sufficiently compensated Korea is uncertain due to Tokyo's claim that it lacked related data on the payment amount. Yet many such data has since been discovered in Japan, raising the possibility that its government might have hid the data. For this reason, saying the compensation issue ended in 1965 is hard to say. What needs highlighting in this lawsuit is that this verdict is between individuals and companies and does not target a country, and that an individual's right to file a claim was never terminated. The best solution in this case is for the Japanese government to stay out of lawsuits between individuals and companies and allow Japanese companies to decide. Furthermore, this issue must be dealt from a human rights perspective because all the discussions have failed to consider the human rights of the comfort women and forced laborers. Both Seoul and Tokyo can find an answer when such rights are considered. Yuji Hosaka teaches political science at Sejong University in Seoul. As a naturalized Korean of Japanese descent, he is also director of the Dokdo Research Institute. Translated by Korea.net Staff Writer Yoon Sojung

Why Japan must lift its export restrictions on Korea

3 Columns on Japanâ&#x20AC;&#x2122;s Export Restrictions

Jul 27, 2019 By Jun Bong-Geun Professor, Korean National Diplomatic Academy

In early July this year, Japan's Abe administration suddenly tightened measures on Korean exports after heavily criticizing the Korean Supreme Court's ruling that ordered Japanese corporations to pay damages to Korean victims of forced labor during Japanese colonial rule of the Korean Peninsula. Tokyo decided to apply an export approval system for individual items instead of the existing one utilizing inclusive approval for three key materials Japan exports to Korea for the production of semiconductors and other related products. I believe that these restrictions will result in self-harm to Japan and constitute a strategic failure with no cause or practical reason in the long run, though they will inflict short-term damage to the Korean economy. This is because such sanctions will ruin bilateral relations and hurt Japan like a boomerang returning to harm the thrower. Furthermore, the restrictions will also damage free trade and international commitments on export control, thus hindering global peace and prosperity. I present the following reasons for my position. First, Japan's decision to impose the export restrictions harms the principle of separating economics from politics, which Seoul and Tokyo used to consider an unwritten rule. Over the history of bilateral relations, both countries have tried to manage conflict by keeping issues within the boundaries of politics and the economy even if the two sides exchanged harsh words. Thus the Abe administration's decision to respond to political and diplomatic disputes with Korea by resorting to economic retaliation is a foul that deserves heavy blame because it breaks bilateral trust and agreements.

Second, Japan argues that the “inappropriateness” of Korea's export control system justifies its restrictions by citing national security concerns. Yet these illegitimate measures abuse the “security exception clause” in free trade norms. Contrary to Tokyo's claim, however, Seoul has the world's leading export control system and Korea is also considered an exemplary country in the implementation of such a system. The country has fully observed all international regulations and commitments on disarmament and nonproliferation, as well as those of export control, and has also chaired quite a few international export control regimes. For this reason, Japan's suspicion of Korea's export control system is tantamount to complete denial of all international regulations on nonproliferation and the global order for export control. Japan says granting a country the status of a preferential nation for export control is a sovereign right. While this is true, if Tokyo grants or excludes a country due to strained bilateral ties or its own arbitrary decision, this will damage Japan's credibility in upholding international commitments and thus constitute an action disrupting global order. Next, Japan's restrictions pose a threat to global free trade, which is supposed to be the universal order of the international community. Such measures run counter to the principle of free trade and lower the efficiency of the world economy because they block the labor division structure between Korea and Japan and the global value chain. If Korea cannot produce semiconductors because of Japan, the global electronics and information and communications technology industries will be hit hard, and this will hinder the development of the Fourth Industrial Revolution. Finally, the sanctions will result in the “de-coupling” of the Korean and Japanese economies by lessening Korea's economic reliance on Japan and vice versa, thus lowering the competitiveness of both sides and reducing the range of economic cooperation among Korea, the U.S. and Japan. The trade row's negative effect on politics is another worrying aspect. The close economic dependence between the two economies, which has cushioned the impact of bilateral political conflict,

interdependence due to the latest restrictions. Unless Japan intends to completely separate itself from Korea, it must immediately lift its export restrictions. Tokyo should also hold dialogue with Seoul on resolving the issue if the former's decision to impose sanctions was based on the Korean court ruling on the forced labor victims, Korea's export control system or inter-Korean relations. Thus Korea and Japan must bolster their economic cooperation and strategic partnership not only to promote the national interests of each nation, but also to ensure peace and prosperity in Northeast Asia. Jun Bong-Geun is a professor at the Korean National Diplomatic Academy who is also acting president of the Institute of Foreign Affairs and National Security under the Ministry of Foreign Affairs. Translated by Korea.net Staff Writer Yoon Sojung

3 Columns on Japanâ&#x20AC;&#x2122;s Export Restrictions

will collapse if both countries give up their division of labor and reduce their

Resolving the Korea-Japan dispute over compensation for forced labor victims Aug 03, 2019 By Yang Keeho Professor, Sungkonghoe University

Korea's ties with Japan have reached their lowest point since the normalization of bilateral relations in 1965. The Japanese government has not only imposed export restrictions on Korea as a form of economic retaliation but is trying to remove the country from Tokyo's “whitelist” of preferential trading partners. Such actions go against Japanese Prime Minister Shinzo Abe's commitment to “a free, fair and non-discriminatory trade policy” announced last month at the G-20 summit in Osaka. Since the end of World War II, the global order for free trade has served as the most important factor in the world economy as well as a pillar sustaining the economic prosperity of both Korea and Japan. According to a report by the World Trade Organization last year, Japan ranked fourth and Korea sixth in global export volume, proving that both countries are crucial components of the world economy. Bilateral trade reached an estimated USD 85 billion last year, bigger than that between the U.K. and France. Korea, however, has a cumulative trade deficit of USD 600 billion with Japan since 1965, and given this humungous trade deficit, Tokyo's unfair export restrictions considerably hurt the principle of free trade and are thus utterly senseless. Such restrictions are also extremely unethical. Japan has apparently ignored the pain and scars of forced labor victims, who have fought the Japanese government and companies over the last two decades through lawsuits seeking compensation for their exploitation as teenagers. Despite Tokyo's claim that the

has faced an irrational situation or tangible damage. On the request from the forced labor victims for the seizure of Korea-based assets of defendant Japanese companies, the verdict from the Korean Supreme Court is likely to come next year in January or February, as hearings have begun with a lower court. Given the lack of tangible damage to Japanese companies in Korea, the export restrictions are indisputably a seriously flawed form of economic retaliation in light of Korea being Japan's most important neighbor that shares strategic interests. In addition, Japan has threatened additional economic retaliation through the removal of Korea from its whitelist started in 2004 of preferential trading partners qualifying for an inclusive export approval system. Tokyo has justified this action by accusing Korea of not fully implementing control of strategic material exports and sanctions on North Korea. Yet Seoul has faithfully complied with such sanctions per a resolution of the United Nations Security Council (UNSC) and conducted control of strategic material exports in a far stricter manner than Japan. Japan also has yet to respond to South Korea's proposal made on July 12 for a bilateral investigation through UNSC expert panels or relevant international organizations to confirm if any violation occurred between both countries in export controls. The breakthrough lies in resolving the issue of compensating forced labor victims, the biggest point of contention between Korea and Japan. In the 1965 Korea-Japan Settlement Agreement, both sides never agreed on whether Japan's 1910-45 colonization of the Korean Peninsula was legal. In October last year, the Korean Supreme Court ruled that Japanese annexation of the peninsula in 1910 was illegal, whereas the Japanese government's position continues to be that it was legal based on international law. As such, even if an arbitration committee to discuss the issue is formed, dialogue is highly likely to break down because of the wide gap in opinions between both sides. Moreover, Japan, which proposed

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export curbs seek to protect Japanese companies, no Japanese business in Korea

this idea, has not even specified what the committee must arbitrate. Another resolution method is to file the case with the International Court of Justice (ICJ), but this would take more than three years. Most of the forced labor victims are in their 90s and thus could die awaiting the outcome. As of February last year, the number of surviving victims was an estimated 5,200, several hundred of whom are not expected to survive when the ICJ renders its verdict three years later. This would also be a very inhumane and cruel manner of reaching a resolution, as well as incur a heavy financial burden on both Korea and Japan. Sorting and translating all data would take more than a year and heighten the war of nerves between both countries. And if either country loses, it will suffer a deadly blow. Thus the two countries should respect the court ruling and the lawsuit process, and must find a breakthrough by limiting the issue's resolution to both sides only. The positions of the two countries are mixed, but if they can at least agree to not bring the issue to the ICJ, this will more effectively help reach a political resolution. In this regard, the Korean government needs to make more concrete its initial proposal made on June 19, when it suggested that companies of both countries jointly form a fund to compensate the victims, by adding additional measures. Korea should create a governance system with victims and the plaintiffs, both of whom fought a legal battle for the last 20 years, and 16 Korean companies including POSCO that benefited from the claims. The solution should also include measures to improve bilateral ties while simultaneously compensating the victims. Once and for all, Japan must give up its claim that the compensation issue was solved through the 1965 Korea-Japan Claims Settlement Agreement. Japanese companies should also participate in the proposed joint fund as the victims have long sought an appropriate apology and compensation from the Japanese government and companies. The content of the apology and compensation from

Simply put, Japanese companies need to voluntarily agree to pay compensation to the victims covered in the verdict of the Korean Supreme Court; compensation for individual victims could include a three-year legal prescription for final resolution between Korea and Japan. And additional lawsuits or the fairness of individual compensation should be finalized through legal actions by the Korean side. Now is a critical time for a coolheaded and objective manner to reach a resolution acceptable to the leaders, diplomatic corps and peoples of both countries. Yang Keeho teaches Japanese studies at Sungkonghoe University in Seoul. Translated by Korea.net Staff Writer Yoon Sojung

3 Columns on Japanâ&#x20AC;&#x2122;s Export Restrictions

Japanese companies for forced labor victims should be both clear and definitive.

Are desirable Korea-Japan relations possible? August 19, 2019 The following op-ed was written by Yuji Hosaka, a professor at Sejong University in Seoul, to help readers overseas better understand the reasons and the historical background behind the latest conflict between Korea and Japan.

By Yuji Hosaka Professor, Sejong University

History of bilateral relations at a glance Korea and Japan have developed close relations since ancient times. According to academic research, a large number of Koreans went to Japan from the fourth century B.C. After the fall of Korea's Baekje Kingdom (18 B.C.-A.D. 660), one of three kingdoms on the Korean Peninsula in the seventh century, many Baekje people moved to Japan. As a result, 1 million to 2 million people from the peninsula moved to Japan. In the fourth century B.C., the number of indigenous people in Japan was an estimated 70,000, so it is no exaggeration to say ancient Japan was built by people who moved there from the peninsula. Thus many say Koreans and Japanese share a lot in common vis-a-vis their DNA than people elsewhere. Afterwards, Japan achieved development by embracing advanced culture from the Korean Peninsula and China. From 920 A.D. to the early 1400s, however, Japan's relations with the peninsula and China were cut off. During that period, Japan formed a so-called warrior society while the Joseon Dynasty (1392â&#x20AC;&#x201C;1910) was established on the peninsula led by literary scholars. In 1404, Joseon and Japan forged a diplomatic relationship after 500 years. Bilateral relations then developed smoothly but this relationship became severed after Japan began its so-called Warring States period (Sengoku jidai) marked by social upheaval and military conflict within the country.

as his next target and sent a massive force of more than 200,000 troops to the Korean Peninsula. This was the start of Hideyoshi's ruthless invasions of Joseon that lasted seven years and greatly harmed relations between Joseon and Japan; these offensives are still remembered by Koreans as historical events that cause anti-Japanese sentiment in Korea even today. The invasions also halved the Joseon population, and many of the peninsula's cultural heritage and products flowed into Japan at the time. After the Tokugawa shogunate (feudal military government) took power and accepted neo-Confucianism, which was the state philosophy of Joseon, both Joseon and Japan restored relations over the next 270 years. During that time, both sides maintained peaceful and friendly ties unprecedented in their history. Yet bilateral relations underwent drastic change in the mid-19th century, when Western powers invaded China. In 1868, the reign of the Tokugawa shogunate ended and the pro-modernization Meiji era took over. The new regime set as its goal the invasion of the Korean Peninsula, believing that putting the territory under Japanese control would protect Japan from Western invasion and make the peninsula a foothold to enter the Asian continent. At the time, Russia was expanding its reach southwards, causing both the U.S. and the U.K. to fear Russian attempts to bolster its influence on the peninsula and in Japan. For this reason, Washington and London supported Tokyo, which resulted in Japan's colonization of the peninsula in 1910. Japanese colonial rule of Korea lasted until 1945. Due to lingering issues that remained unresolved, Korea-Japan relations have repeatedly switched from friendship to conflict.

The 1965 Korea-Japan Claims Settlement Agreement and normalization of diplomatic relations In 1965, Korea and Japan resolved the matter of the former's colonization of the

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When Toyotomi Hideyoshi united Japan in the late 16th century, he set Joseon

latter and signed the Treaty on Basic Relations and four other accords. Among them, the Korea-Japan Claims Settlement Agreement continues to pose problems between both nations to this day. Through the treaty, Seoul and Tokyo agreed that the right of an individual as well as a nation to file a claim for damages was settled once and for all after Japan agreed to give Korea grants worth USD 300 million and credit assistance of USD 200 million. Yet controversy has since erupted within Japan over whether the treaty settled an individual's right to file a claim. Starting in 1991, the Japanese government has told its legislature several times that “an individual’s right to file a claim was not terminated and what was terminated was a country’s diplomatic right to protect its individuals despite bilateral agreements,” adding, “An individual's right to file a claim was not included in the 1965 treaty.” Accordingly, this led to Korean victims of forced labor by Japan to start filing lawsuits in Japan. During 1965, there was a shortage of documents on Japan's mobilization of forced laborers because of negligence on Tokyo's part. After normalization of diplomatic relations, however, lots of evidence on the matter were found in Japan, which led the victims to file lawsuits. Among the cases was the one filed against Nachi-Fujikoshi, a Japanese company that committed war crimes during World War II; this lawsuit was settled without a verdict from the Japanese Supreme Court. The latter court used the term “settlement” as way of recognizing the individual right of a Korean victim to file a claim. In this lawsuit, which had Korean victims of sexual slavery by Japan move from Busan, Korea, to Shimonoseki, Japan, to continue their case, the plaintiffs won the first trial. Since 2000, however, Japanese courts have utilized a hard-to-understand logic that says that though the individual right to file a claim remains, the victims cannot receive assistance due to the 1965 Korea-Japan Claims Settlement Agreement. Thus Korean forced labor victims who filed lawsuits in Japan kept losing in court. Japan's Domestic Law No. 114 was the basis for the nation's court rulings against the plaintiffs as it terminated the individual right of Koreans

individual right to file a claim since the 1965 treaty did not eliminate that right. Thus the Korean victims moved their legal fight to the stage of Korean courts. In May 2012, the Korean Supreme Court found in favor of forced labor victims in their lawsuit against Nippon Steel & Sumitomo Metal Corp. The ruling ordered the company to pay reparations to the victims and called Japanese colonial rule of the Korean Peninsula “unlawful.” Though the corporation rejected the ruling, Korea's top court made the verdict final in October 2018, meaning the company definitively lost the case. Reasons for Japan's economic retaliation The Korean Supreme Court's verdict elicited resistance from the Japanese government, which said, “Korea breached the 1965 treaty and thus violated international law.” In November 2018 at a Q&A session of the budget committee of the House of Councilors, Japanese Foreign Minister Taro Kono and committee members ultimately acknowledged during pointed questioning by the opposition party that an individual's right to file a claim had not been terminated, and that the 1965 Korea-Japan Claims Settlement Agreement did not include the reparations issue. Afterwards, however, Japan changed its words and began accusing Korea of “breaking a promise between both countries.” Tokyo also continuously requested that Seoul rectify its “violation of international law.” The Japanese government has continued to unfairly exercise its national diplomatic right to protect individuals, a right that it said had been terminated. The Korean government, meanwhile, has retained its stance of non-interference with a court ruling since it was a civil matter between individuals and a private company. This means Seoul has observed the separation of the legislature, the administration and the judiciary. Due to Japan's persistence in unfairly exercising its right to diplomatic protection, Korea in June this year proposed a fund with the joint participation of companies from both countries to assist the Korean victims. Tokyo rejected this proposal

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in Japan to file a claim. Japan enacted a law to terminate a Korean victim's

and has since ignored Seoul at the policy level. At the G-20 summit hosted by Japan in late June, Tokyo also rejected Seoul's request to hold bilateral summit talks. Japan has thus refused to pursue a diplomatic breakthrough, arguing that Seoul must first rectify its violation of international law. On July 1, the Japanese government suddenly announced the imposition of export restrictions on Korea, especially on three key materials for producing semiconductors, and effectuated the measures on July 4. On his administration's reasons for the action, Prime Minister Abe blamed the Korean Supreme Court ruling on the forced labor victims for harming the bilateral “trust relationship.” Thus this proves that the trade sanctions were a retaliatory action against the verdict. Japanese Chief Cabinet Secretary Yoshihide Suga also expressed the same position, while Minister of Economy, Trade and Industry Hiroshige Seko also called the decision “Japan's retaliatory action” on his Twitter feed. All of these attest to Japan resorting to economic retaliation against Korea to respond to the verdict. As public opinion over the row worsened both in and out of Japan, the Abe administration started to change its words yet again. It began to spread the allegation that Korea's export control system was problematic and accused certain South Korean companies of violating sanctions on North Korea by making unauthorized exports of strategic materials to the North. The Japanese side presented no specific evidence to back its claims, however, and Seoul instead embarrassed Tokyo by releasing a list of items shipped from Japan to the North. In another shift of words, the Japanese side announced that it would drop Korea from its whitelist of preferential trading countries because of what Tokyo claimed was a poor export control system that left many items mismanaged. On Aug. 2, Japan removed Korea from its whitelist, meaning that around 1,200 items in Japan were subject to tighter screening before being exported to Korea. Thus Japan started a de facto economic war with Korea on unfair grounds.

Korea and Japan can normalize bilateral relations only after the latter lifts its unfair export restrictions used as economic retaliation against the former. Angered by the action, more Koreans are joining the nationwide boycott of Japanese products and expanding the campaign. As of Aug. 10, more than 80% of Koreans said they will participate in the growing boycott. Many in Korea have also canceled trips to Japan and opted to travel domestically. With both the central and local governments in Korea offering more incentives for tourism at home, a growing number of families are exploring their country rather than Japan. Reduced Korean travel to Japan, meanwhile, has begun to damage Japanese cities that used to attract many Korean tourists. Thus Japan has incurred substantial economic damage. The Korean government and the corporate sector have pushed for the localization of key materials that the country used to import from Japan. Partial success in this endeavor is expected within a few months. Ultimately, Japan might end up worrying over the possibility that its reckless economic retaliation will hurt its own industries. What should never be forgotten is that desirable Korea-Japan relations are possible only after Japan properly rectifies its past wrongdoings in the manner that Germany did. Many issues have surfaced due to this conflict, and thus to improve bilateral ties, dealing with each issue from a human rights perspective that considers the victims is crucial. Yuji Hosaka teaches political science at Sejong University in Seoul. As a naturalized Korean of Japanese descent, he is also director of the Dokdo Research Institute. Translated by Korea.net Staff Writer Yoon Sojung

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Are desirable bilateral relations possible?

Lawsuits by forced labor victims and Korea-Japan relations Aug 30, 2019 By Hidekazu Zaima Lawyer

Results of court verdicts in Japan and Korea Since 1995, I have been working on the issue of Korean victims of forced labor, or those mobilized from the Korean Peninsula and made to work at Mitsubishi Heavy Industries' factories in Hiroshima in September 1944 under Japan's national mobilization law. Many of the victims were killed by the atomic bombing of the city on Aug. 6, 1945. Receiving no relief measures from Mitsubishi, the surviving victims later returned to Korea at great risk to their lives. None of them received any compensation for their suffering. In December 1995, 50 years after Japan's surrender in World War II, they sued the corporation through the Hiroshima District Court, demanding compensation of JPY 10 million for each of the 46 plaintiffs who were forced labor victims living in Korea. The defendants in the lawsuit were Japan and Mitsubishi. On March 25, 1999, the Hiroshima court handed down an unfair ruling by dismissing the lawsuit because the statute of limitations had expired. We thought of other ways, asking, "Can we urge the Japanese government to take responsibility for the war through a Korean court while continuing the trial in Japan?" We discussed this with Korean lawyers including Choi Bong-tae, and on May 1, 2000, we filed a lawsuit with the Busan District Court against Mitsubishi. Similar lawsuits were filed later against Japan's Nippon Steel (formerly known as Nippon Steel & Sumitomo Metal Corp.) and Nachi-Fujikoshi. The Busan District Court and the Busan High Court found in favor of Mitsubishi,

Court's verdict. On whether an individual's right to file a claim was resolved through the 1965 Korea-Japan Claims Settlement Agreement, the Supreme Court said the accord did not prohibit an individual's right to directly claim damages caused by Japan's inhumane and unlawful acts and colonial rule. Spurred by the verdict of the nation's highest court, the Busan High Court on July 30, 2013, ordered Mitsubishi to pay KRW 80 million to each of the plaintiffs, a long-awaited result for the forced labor victims. The corporation, however, rejected the ruling and filed an appeal with the Supreme Court. On Nov. 29, 2018, Korea's top court again ruled in favor of an individual victim's right to claim compensation for forced labor. This verdict came about a month after the same court upheld a 2013 appellate ruling made on Oct. 30, 2018, in favor of the plaintiffs against Nippon Steel. Responses of Japanese gov't, companies to Korean Supreme Court's verdict After the Korean Supreme Court rendered its verdict in 2018, Japanese Prime Minister Shinzo Abe blasted it as a “violation of international law,” the strongest expression he could use. He gradually amplified his attitude of hostility toward the Korean people. This also led to the latest bilateral trade spat, which has brought Seoul-Tokyo relations to their lowest point in history. The following is my view of the situation. The first point is the Japanese government's allegation that the Korean Supreme Court ruling was a violation of international law. The first thing to check is if an individual victim's right to file a claim was terminated under the 1965 treaty. Chances are that the Japanese government has a false understanding of this issue. Tokyo has blamed Seoul for violating international law and insisted that the “individual right to file a claim was settled in the treaty, whereas Korea recognizes such a right and keeps raising the issue though it had been settled in a complete and final manner.” The Japanese government, however, has also admitted that such a right has not been terminated. On Nov. 14, 2018, Japanese Foreign Minister Taro Kono told the Japanese Diet, “An individual’s right to file a claim for damages has not been terminated.” Yet the Japanese government

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but on May 24, 2012, the Korean Supreme Court remanded the Busan High

seldom mentions his statement and instead keeps stressing that â&#x20AC;&#x153;the issue was resolved in a complete and final manner.â&#x20AC;? Tokyo has yet to clearly explain how the Korean verdict granting an individual's right to claim damages violates international law. The second point is Japan's criticism that the Korean government has not responded to the Supreme Court ruling. Both countries have separation of the legal, administrative and judicial branches of government. Tokyo has urged Seoul of its obligation to prevent Korea's top court to make such a ruling, saying the Korean government must reject the verdict. This denies the fundamental principle of the separation of the legislature, the administration and the judiciary. The Supreme Court ruling is on the lawsuit filed by forced labor victims who sued Japanese companies for compensation for the suffering they underwent due to their mobilization for forced labor, and the Japanese government is ignoring this. How is this possible? This matter must be resolved between the victims and the Japanese companies in question. I am forced to say the Japanese government is responding in a very unfair manner because it is hindering its companies from making their own decisions. The third point is the basic attitude of the Japanese government. Tokyo has no intent to consider the victims of both its colonial rule and the war that it started; it has no sense of responsibility as the country that started the war. While the country's diplomatic right to protect its individuals was clearly resolved by the 1965 treaty, why have the forced labor victims demanded that the companies pay reparations and assume responsibility through the filing of lawsuits? Japan has not seriously listened to the victims, and should this attitude persist, the victims will never lower their voices. Resolution of the issue will never happen unless Japan accepts the Korean Supreme Court's verdict upholding the appeal of forced labor victims and recognizes it as a key national issue. Fourth, we need to reconsider whether the issue of compensation was resolved in a complete and final manner in the 1965 treaty and what that means. The agreement was made in the Cold War era between East and West, and Korea

sought to penetrate the Korean market. Through bilateral negotiations, both nations finally reached an agreement through a “political compromise.” The Japanese government called the monetary settlement “celebratory money to mark independence.” The treaty also stipulated that “grant assistance of USD 300 million and credit assistance of USD 200 million are paid by Japan for the provision of products and labor. Both the provision and credit loan should contribute to the development of the Republic of Korea.” Considering this special stipulation, I cannot understand Japan's insistence that the payments were compensation for the victims. Thus it was inevitable that the victims never lost their individual rights to file reparation claims and sue the companies. We have no reason to call their request an unfair demand. Japanese gov't's responses After the Korean Supreme Court handed down its verdict in October 2018, the Japanese government suddenly began to criticize Korea through moves that were clearly deliberate and political responses. Earlier in 2012, the Supreme Court had said, “Forced labor victims retain their individual rights to file claims for damages caused by Japan's responsibility for inhumane and unlawful acts and colonial rule, and that is not settled by the bilateral treaty.” This verdict cannot be easily overturned because it came from Korea's highest court. The Japanese government should have initially weighed the gravity of the ruling and considered making a response in a more serious manner. Instead, Japan made neither a major response nor any review. All of a sudden, however, Tokyo has responded to the ruling in a rather emotional manner. I suspect what lies behind this reaction is Japan's political situation stemming from the recent election for the House of Councilors and the launch of the Moon Jae-in administration in Korea. To achieve a breakthrough in this situation, the issue of forced labor victims must be treated as a human rights matter, not a political one, and the victims' appeals must be handled in a serious manner.

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at the time was ruled by a military regime. Many Japanese companies also

Japan's export curbs on Korea The Japanese government has made the worst policy response through its export restrictions on Korea and removing the country from its whitelist of preferential trading partners. Tokyo initially said its actions were part of its resistance to the verdict on the forced labor issue but now insists that they have no connection with the Korean Supreme Court's ruling. Doesn't this attitude prove the unfairness of its policy? From an economic perspective, Japan treating Korea as an enemy will have an enormous impact on the Japanese economy, and such a situation has occurred. Japan should immediately stop such a policy. Instead of expending energy that way, both countries must immediately hold summit talks between their leaders to boost mutual understanding. The biggest task at this moment for both sides is how much effort to make toward peace, not war. To achieve peace in a concrete manner, it is crucial for Japan to build desirable relations with neighboring countries and at the very least not cause conflict. Japan must also consider how to understand and achieve coexistence with the residents of the same region. The Japanese people must first form good ties with their neighbor Korea. Now is also the time for Japan to seriously contemplate creating an order of peaceful coexistence in East Asia. Hidekazu Zaima is a Japanese attorney representing the Korean victims of forced labor who are suing Mitsubishi Heavy Industries. Translated by Korea.net staff writers Kim Eun-young and Yoon Sojung

Does Korean Supreme Court ruling violate international law?

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Aug 31, 2019 By Nam Kijeong Professor, Seoul National University

At midnight on Aug. 28, Japan implemented its decision to remove Korea from a whitelist of preferential trading partners despite a lot of controversy. Tokyo gave as its official reason its need to reconsider its trade control system due to security fears. The most direct reason for this action, however, is the ruling by the Korean Supreme Court on Oct. 30, 2018, on a lawsuit filed by forced labor victims. The Japanese government insisted that this verdict violated Article II of the 1965 Korea-Japan Claims Settlement Agreement, demanding a response from the Korean government on the verdict through many channels. Tokyo also requested bilateral negotiations and mediation under Article III of the 1965 bilateral treaty. The Korean government, however, rejected Japan's demands while the victims continued the process of seizure and liquidation of the accused Japanese companies' assets based in Korea. Japan needs approximately 90 days to exclude Korea from its whitelist of countries qualifying for inclusive export approval and change to a case-by-case approval system for exports to Korea. About the same length of time is required for the liquidation of the Koreabased assets seized from the Japanese companies. Considering these circumstances, Japan's measures obviously targeted this exact timing. Japan's export restrictions are already inbetween the boundaries of violations of World Trade Organization (WTO) rules. Because of this, Tokyo has strongly denied any connection between this issue and politics yet its ultimate intent lies in nullifying the Korean Supreme Court verdict. Japan's main gripe is that the ruling violated international law. Right after the decision was rendered last year, Japan's foreign minister said in a statement, â&#x20AC;&#x153;Korea violated

international law through the ruling from its top court.â&#x20AC;? Citing the 1965 treaty, Japan said it pledged financial support of USD 300 million in grants and USD 200 million in credit assistance to Korea (Article 1). Tokyo also said wartime property and claims right issues were completely and definitively settled by this agreement (Article II). Thus Japan insisted that the Supreme Court ruling ordering Japanese corporations to pay damages and compensation to forced labor victims violated Article II. Tokyo also urged Seoul to respond to this violation of international law and take appropriate measures. Yet such logic by Japan makes no sense in several ways. First, the Supreme Court ruling ordered the accused companies to pay each victim damages and compensation caused by their mobilization for forced labor. The victims' right to claim reparations is not governed by the 1965 settlement agreement, which merely resolved in a political manner the property claims rights from the perspective of civil law. The agreement is not related to the payment of damages caused by the violation of basic human rights under Japan's unlawful colonial rule. As Japan itself said in the announcement, it pledged to provide financial cooperation to Korea, and the treaty never mentioned the legal nature of such cooperation. Moreover, the relationship between Tokyo's pledge to provide financial cooperation and the resolution of an individual victim's right to file a claim remains ambiguous, something already pointed out by the Korean Supreme Court. Second, if Japan insists that the Korean Supreme Court ruling ordering Japanese companies to pay reparations violated Article II of the treaty, it must prove whether payment of damages is included in matters recorded as resolved by Article II. If the right to file a claim was resolved through the treaty, Tokyo must confirm if the treaty acknowledged the unlawfulness of Japanese colonial rule of the Korean Peninsula, which is a precondition for reparations. Furthermore, if Japan argues that the right to file a claim was resolved through its compensation payment, I wonder if this constitutes a change in Japan's prior interpretation of the treaty that said Article I has no legal connection to Article II. Third, another issue is interpretation of a clause of the treaty under statutory or common law. This is because both nations have different interpretations of the bilateral treaty and the claims settlement agreement. The understanding is that the two accords are based on the differing interpretations of the two countries. In other words, Korea considers Japanese colonial rule an unlawful act in accordance with the treaty, something Japan denies. Seoul

Tokyo rejects the notion that the two articles are connected. So even if Korea makes a major concession by accepting Japan's argument that the Korean Supreme Court is against Tokyo's interpretations of the treaty and the agreement and has unilaterally followed Korea's interpretations, the Korean court ruling must be allowed in line with the existing practice of “agreeing to disagree.” If Tokyo considers this a violation of international law, this means Japan is breaching international law as common law. This legal quarrel is extremely complicated and hard to understand for ordinary people. What can be confirmed here, however, is that the discord in the interpretation of the two agreements by both nations has caused this situation. Thus one way to resolve the bilateral row is to get both nations to agree on interpretations of both the bilateral treaty and the claims agreement and remove the incompleteness of the Korea-Japan 1965 system. In 1965, Japan stubbornly rejected Korea's demand to acknowledge the unlawfulness of its colonial rule. Entering the 1990s, however, Tokyo's awareness grew closer to Seoul's through the 1993 Kono Statement, the 1995 Murayama Statement and the joint declaration between Korean President Kim Dae-jung and Japanese Prime Minister Keizo Obuchi in 1998. In 2010, Japan, through a statement by Prime Minister Naoto Kan, admitted that its colonial rule of Korea was done against the will of the Korean people. Thus the remaining task is to document such agreements and share them with Seoul and Tokyo. In the end, the more fundamental issues between Korea and Japan sealed by the 1965 framework have been exposed by the Korean Supreme Court ruling. The future of bilateral relations lies in how both countries can overcome the post-1965 framework. Thus Korea and Japan need to respond wisely based on history and legal principles.

Nam Kijeong is an associate professor at the Institute for Japanese Studies of Seoul National University. Translated by Korea.net Staff Writer Yoon Sojung

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also insists that Article I has an inseparable connection to Article II of the treaty, while

Japan is not keeping agreement with Korea [Letter]

Sep 06, 2019 The following letter was written by Kim In-chul, spokesperson of the Ministry of Foreign Affairs, and published by the Wall Street Journal on Sept. 6, 2019. Korea.net has received the author's permission to publish his letter.

Korea has faithfully complied with the 1965 claims agreement with Japan and has no intention of breaking it. Sept. 6, 2019 Your editorial “Protectionist Diplomacy Goes Global” (Aug. 3) correctly describes the recent Japanese export-control measures against Korea as “retaliation.” The Japanese government's argument in its Aug. 23 letter (“Japan Is Adhering to Its Treaty With Korea”) rings hollow given Japan's shifting rationale. The Republic of Korea Supreme Court affirmed the right of the plaintiffs–Koreans who “were brought against their will and forced to work under harsh conditions” (in the words of the Japanese delegation to Unesco in 2015) for companies that were part of Japan’s wartime industrial machinery–to be paid compensation by the defendants. The plaintiffs had tried their cases in Japan, encouraged by Japan's own position that individual rights to claims had not been extinguished. Korea has faithfully complied with the 1965 claims agreement with Japan and has no intention of breaking it. Without negating the agreement, the Supreme Court ruling points out that damages suffered by the victims of forced labor directly linked to the illegal colonial rule and war of aggression by Japan were not covered by the agreement as Japan had refused to accept legal responsibility for the colonization of Korea during the prolonged negotiations leading up to the

We have endeavored to find a formula that would fulfill the Supreme Court judgment while keeping the 1965 agreement intact. Unfortunately, Japan has stonewalled dialogue and instead retaliated on the trade front, while propagating its unilateral claim that Korea is violating international law. At the heart of the problem is Japan's historical revisionism and unwillingness to fully come to terms with the past. But we stand ready to engage in dialogue with Japan to overcome the challenges and work together toward a shared future. Kim In-chul Foreign Ministry Spokesperson Republic of Korea Seoul

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agreement.

What direction should Korea-Japan relations head toward?

Sep 07, 2019 By Kim Ki-jung Professor, Yonsei University

The diplomatic conflict between Korea and Japan this year has widely spread to all areas. The Japanese government sparked the row over its strong criticism of the Korean Supreme Court's ruling favoring Korean victims of forced labor, which later led Japan to impose export restrictions on Korea. In response, the Korean government decided not to extend the General Security of Military Information Agreement, a bilateral accord on sharing military information with Japan, because of such restrictions. Amid the rise in anti-Korea sentiment in Japan and vice versa in Korea, the conflict between the two governments has escalated into one pitting both countries against each other. To prevent such an atmosphere from creating hostility between the people of each country, the two governments need to make diplomatic efforts. At this moment, however, an explanation is in order of the entire structure that has formed Korea-Japan relations since 1965. The essence of fundamental and structural matters that both governments face must be grasped to understand the nature of the conflict. This will thus enable both sides to set the ultimate direction that bilateral relations should head toward. The conflict is rooted in the 1965 framework formed after both countries signed the Treaty on Basic Relations between Japan and the Republic of Korea in 1965 and the Korea-Japan Claims Settlement Agreement concluded in the same year. The key point in the latest conflict shows structural matters of the framework, which has remained volatile since the treaty's signing. The framework lies in a structure combining anticommunism and the elimination of colonialism. At the time, anti-communism was

which bound Korea and Japan with strategic interests. The framework was based on the structure of the international division of labor that combined Japan's capital and technology with Korea's desire for export-oriented industrialization. For this reason, eliminating colonial rule under the framework was an incomplete mission from the beginning. Both countries failed to form an agreement structure over whether Japanese colonial rule of the Korean Peninsula was an unlawful act. Thus a mere diplomatic quick-fix ensued without a decent measure to reconcile history. Such incompleteness in eliminating colonial rule was proven by the two countries reaching agreement on the issues of victims of atomic bombs, sexual slavery and forced labor and Koreans forced to move to Sakhalin; these were all outside of the framework. As the post-Cold War era opened, anti-communism disappeared from the bond that connected Korea and Japan. Meanwhile, the remaining unresolved issue of eliminating colonial rule was replaced by that of reparations for forced labor victims raised by the victims. The Korean Supreme Court's ruling was based on the legal interpretation that the agreement reached in the 1965 treaty was incomplete. The criteria for such an interpretation focused on the victims and the unlawfulness of Japanese colonial rule. Today, the Abe administration has resorted to reckless actions by imposing export restrictions on Korea and thus escalating the trade conflict. Prime Minister Shinzo Abe has focused on domestic political gains as he longs to reenact Japanâ&#x20AC;&#x2122;s glorious past of the 19th-century imperial era in the 21st century. His administration fails to fully understand the Korean people's determination to ensure no repeat of their shameful history based on their nationalistic resolution. The algorithm of the Abe administration is to create an enemy outside the country to instill an atmosphere of danger and hostility that leads to constitutional revision, as well as expand the range of external activities of the Japanese military. Tokyo also intends to hurriedly form a quasi-bloc of its own in East Asia amid the worsening conflict between the U.S. and China. In that process, Tokyo could have predicted that Seoul might fear diplomatic

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the main driving force of the framework rather than the elimination of colonial rule,

isolation, which could be considered the latter's Achilles' heel. This is why Japan called Korea “an untrustworthy country in security” when Tokyo decided to impose export curbs on Seoul. This decision showed the impatience of the Abe administration. The Moon Jae-in administration has made a strategic decision in a determined manner. In response to Japan's economic challenge, Korea has responded by citing national security like Tokyo did for why it imposed export curbs. President Moon issued a warning to Japan's Abe administration in his National Liberation Day speech this year on Aug. 15, saying, “Let us build a new nation that will not be shaken.” This was because of Tokyo's intent to set up a game in East Asia and divide the region by making its neighbors take sides. Instead of fighting such a plan, the Moon administration expressed its will to advance peace on the Korean Peninsula and build a path toward peaceful co-existence, not confrontation. To expand its diplomatic maneuverability, Seoul said it will “build a country that serves as a bridge by taking the lead in promoting peace and prosperity on the (Asian) continent and out in the ocean.” The latest Korea-Japan conflict shows the Abe administration's world view, strategic decisions and perception of history to the international community. These are in contrast to those of the Moon administration in many ways. For example, based on its conflict-based world view, the Abe administration clearly intends to promote the formation of a Cold War-type bloc. On the contrary, President Moon's strategies are based on cooperation aimed to form an inclusive network in East Asia. Each side also expresses a very different perspective of the Korean Peninsula. On the peninsula's division as a precondition, the Abe administration prefers the measure of “dividing and ruling” the region. The Moon administration, however, wants to reshape the peninsula under an order of peaceful co-existence. Both Korea and Japan share an inescapable fate as neighboring nations. So what direction should they head toward after this bilateral conflict? The ultimate answer is the establishment of a new era of the post-1965 framework that goes beyond the existing regime. Sharing such a direction provides guidance toward the path of conflict resolution. This year can be seen as the start of a turning point whose goal

end, both governments must find middle ground in understanding to replace the framework's concepts of “anti-communism” and the “incomplete mission of resolving the elimination of colonial rule.” Korea will find it difficult to accept Japan's East Asia strategy because of the possibility that the Korean Peninsula will remain divided. Thus finding common ground based on strategic interest in peace is a must. Both Seoul and Tokyo can find common interest in forming an order of peaceful co-existence both on the peninsula and in East Asia rather than revive Cold War-type confrontation. Reconciliation of East Asian history is the ultimate goal for both countries by overcoming the incomplete mission of eliminating colonial rule under the 1965 framework. Yet such reconciliation does not directly mean forgiveness but begins with identifying the perpetrator and the victim and finding out why such conflict occurred in history. Doing so will enable forgiveness that will complete reconciliation. So to build such solidarity, dialogue within experts and civic groups from both countries holds more importance. In the meantime, government-level efforts must follow to manage diplomacy in a stable manner. Yet if the focus is on temporary diplomatic management only, finding the ultimate solution will take longer. To create a new bilateral relationship based on solidarity, economic cooperation between Korea and Japan should overcome the unilateral technological dependency under the international division of labor. Instead, bilateral cooperation needs to be rebuilt to allow mutually beneficial and horizontal collaboration under the principle of free trade. At the same time, both nations need to widen cultural dialogue. Backed by universal values, cultural dialogue aims at spreading “a sphere of meaning” between both countries. Koreans expect Japanese civic groups to make autonomous decisions instead of being easily influenced by their government. Seoul is also willing to hold talks with Tokyo on the direction of peace and cooperation. Kim Ki-jung teaches international politics at Yonsei University in Seoul. Translated by Korea.net staff writer Yoon Sojung

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is to achieve a new forward-looking solidarity between Korea and Japan. To this

[Letter]

To the editor: South Korea-Japan

Pact Sep 12, 2019 The following letter was written by Park Hyo-sung, consul general of the Consulate General of the Republic of Korea in New York, and published by The New York Times on Sept. 12, 2019. Korea.net has received the author's permission to publish his letter.

“Embattled at Home, South Korea's Old Hostilities” (news article, Aug. 30) paints a misleading picture of the Korean government's response to recent KoreaJapan relations and Seoul's decision to terminate a military-intelligence sharing agreement. You report that “analysts say” President Moon Jae-in “is moving to rally his supporters by tapping into hostility toward Japan.” The article also suggests that the decision to end the intelligence-sharing agreement was a means of diversion to save the new justice minister. This wrongly depicts Seoul's diplomatic and security policies as having domestic political aims. Japan maintains its export restrictions by saying its trust in Korea has been undermined. Therefore, Korea found it untenable to renew the intelligencesharing agreement, which requires a high level of trust between the two countries. You say this decision “exposed Seoul's fraying alliance with the United States.” Rather, Seoul will take this opportunity to upgrade its alliance with Washington.

Park Hyo-sung, New York The writer is consul general of South Korea in New York.

A trade dispute and an ancient debt

Sep 17, 2019 The following op-ed was originally written in German by Hannes Mosler, a professor of Korean studies at Free University of Berlin, and published by the Frankfurter Rundschau on Sept. 17, 2019. Korea.net has received the author's permission to publish his article translated in English.

By Hannes Mosler Professor, Free University of Berlin

South Korea and Japan are fighting a trade dispute. One reason for this is Japanese occupation of Korea in the past and its historical reappraisal. Last year, the Supreme Court of South Korea ordered two Japanese companies to pay compensation to former South Korean forced laborers. The Japanese government rejected this claim by referencing the 1965 Korean-Japanese Basic Treaty. Furthermore, Japan imposed export restrictions on important goods to South Korea this summer. The South Korean government sees these sanctions as part of Japan's strategy to evade its past. This, in turn, is denied by the Japanese government in official statements and articles in English-language newspapers published in various countries, apparently trying to make South Korea look unreliable and untrustworthy in the public eye. Germany and Japan committed serious crimes against humanity before and during World War II. Yet despite the many unresolved issues, both countries deal with these crimes in completely different ways. When referring to its own dark periods in history, Japan often focuses on its past as a victim by bringing up

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the atomic bombings of Hiroshima and Nagasaki shortly before the end of the Second World War. And representatives of the Japanese government refuse any comparison with Germany. It is true that Japan, unlike Germany, was not divided after World War II. In East Asia, only the Korean Peninsula was divided, which consequently led to the outbreak of the Korean War from 1950–53. The war industry significantly contributed to the economic growth of post-war Japan. It is also true that Japan was not only allowed to retain its emperor as a symbol of national unity and historic continuity, but even anchored the empire in the first article of its post-war constitution, while Germany's Basic Law states at its very beginning the inviolability of human dignity. Between 1910 and 1945, the Korean Peninsula was under the brutal occupation of the Japanese empire. Similar to people in other Asian countries, Koreans suffered oppression and exploitation, forced labor, forced prostitution and experiments on humans by its neighboring country Japan. In 1965, Japan signed an agreement with South Korean dictator Park Chunghee to normalize relations between the two countries. Post-war Japan, which had regained its economic strength, paid USD 500 million to South Korea in the form of subsidies and loans on favorable terms. With these payments, Japan wanted to end all compensation claims made by South Korea. There were a number of apologies from Japanese government officials, but no sincere and consistent reconciliation policy has been put forth. On the contrary, Japan repeatedly offends South Korea and other neighboring countries by denying its crimes against humanity through the heroic display of war criminals, attempts to remove Japan's peace constitution, prevention of critical exhibitions on history and not least by its rejection of compensation payments to its victims.

Korean forced laborers their right to compensation is questionable. Irrespective of intergovernmental agreements, claims by individuals do not expire, particularly if these claims are violations of human rights. In this sense, even Japan's Supreme Court has issued several court judgements in favor of Chinese forced laborers despite divergent agreements between Japan and China. Even if one came to the conclusion that all claims were settled with the Basic Treaty of 1965, one can still argue with international law, which says a contract requiring the forfeiture of claims for forced labor violates the norm of ius cogens (peremptory norm) and therefore be null and void as such. Far more important than all financial payments and legal interpretations, however, is a sincere admission of wrongdoing and a sense of responsibility as well as a consistent attitude toward the victims. Prosperity and peace in East Asia depend on a sustainable reconciliation between Korea and Japan. Japan's goodwill is crucial to that matter. Hannes Mosler teaches Korean studies at Free University in Berlin.

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Even the legal argumentation used by the Japanese government to deny South

Japan's sanctions against South Korea are misguided [Letter]

Sep 19, 2019 The following letter was written by Yoon Soon-gu, deputy minister of the Ministry of Foreign Affairs, and published by Bloomberg on Sept. 19, 2019. Korea.net has received the author's permission to publish his letter.

Yoon Soongu, South Koreaâ&#x20AC;&#x2122;s deputy minister of foreign affairs, responds to a Bloomberg Opinion article published on Sept. 4, 2019. To the editor: Japan has blamed its falling out with South Korea on the latter's breach of the 1965 agreement on claims settlement. It has also argued that Tokyo's recent export restrictions against Korea had nothing to do with this supposed breach. Both claims are disingenuous and unfounded. Consider the accusation that Korea is violating the 1965 agreement. Every agreement, whether between individuals or among nations, is bound by its scope. The gap between South Korea and Japan boils down to differences over what the 1965 agreement covers. Japan's position is that the agreement addressed each and every claim stemming from the colonial period. A particular point of contention is whether the agreement prevents the right of Korean forced laborers to claim compensation for psychological suffering against Japanese companies which had committed unlawful acts against humanity directly linked to Japan's illegal colonial rule of Korea and its war of aggression. Japan has maintained that these laborers, who were forced to toil away under the most inhumane conditions in support of

are thus foreclosed by the agreement from seeking compensation. South Korea rejects this argument. The 2018 Korean Supreme Court ruling at the heart of the current discord simply reaffirmed that the 1965 agreement does not cover what Japan refused to cover. Japan has never accepted legal responsibility for its brutal subjugation of Korea, and thus this element was not reflected in the agreement. Therefore, the Supreme Court ruled that individuals still have the right to seek redress for unlawful acts against humanity directly linked to Japanâ&#x20AC;&#x2122;s illegal colonial rule. We reject Japan's insistence that the South Korean government, by respecting this judicial decision, has abrogated the 1965 agreement. Furthermore, in 1991, a senior Japanese foreign ministry official clearly affirmed that individuals' right to claim reparations had not been extinguished by the 1965 agreement. This encouraged Korean victims of forced labor to try their cases in Japan. The Japanese courts rejected their claims, so they brought their cases home. Japan also asserts that South Korea's alleged mishandling of sensitive goods left it with no choice but to adopt unilateral export restrictions against one of its closest trading partners -- a claim Japan could not substantiate. In fact, the Washingtonbased Institute for Science and International Security ranks Korea's control system above Japanâ&#x20AC;&#x2122;s. The real motive behind the measures is glaringly obvious: to punish Korea for the Supreme Court's ruling through unrelated means aimed with laser-precision at taking out its core industries. Japan's repudiation of South Korea as a trusted security partner served as the basis for our own decision to pull out of an intelligence-sharing pact with Japan. By openly displaying its distrust of Korea, Japan had undercut the premise for continuing the pact which required the highest level of trust between the two nations.

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Imperial Japan's war machinery, willingly and legally signed up for the work and

Many in Japan accuse the South Korean government of inflaming anti-Japan sentiments to divert attention from domestic political woes. This accusation is misplaced. South Korea is a thriving democracy; the government cannot steer public sentiments. What fuels public anger in Korea is Japan's right-wing elements that have propagated revisionist views of historical facts. The heart of the problem is Japan's unwillingness to fully come to terms with the past. Japan asks how many times it must apologize. The country's leaders have made some apologies over the years. Yet rarely have they been spontaneous or heartfelt. Instead, they’ve been maximally choreographed, with Japan insisting on crossing every “t” and dotting every “i” -- not the ideal way to convey remorse. Even such half-hearted statements are walked back time and again. A senior Japanese official even remarked that some parents of “comfort women” had sold off their daughters to Japan's military brothels. Such cruel, dismissive words have become a fixture of Korea-Japan relations, uttered regularly not only by Japan's fringe, but too often by the heavy hitters of Japanese politics and government. Despite our differences over history, South Korea is ready to engage in honest dialogue with Japan. One silver lining of this recent feud is that it has revealed just how closely the two countries are interlinked. We hope that Japan can withdraw its economic retaliation against South Korea and honestly face the past, so that we may begin the process of putting this unfortunate period in our relations behind us. Yoon Soongu Deputy Minister for Foreign Affairs Seoul

Japan and South Korea must work to settle trade differences [Letter]

Sep 27, 2019 The following letter was written by Kim Seung-ho, deputy trade minister for multilateral and legal affairs of the Ministry of Trade, Industry and Energy, and published by the U.K. Financial Times on Sept. 25, 2019. Korea.net has received the author's permission to publish his letter.

From Kim Seung-ho, Deputy Trade Minister for Multilateral and Legal Affairs, Sejong City, Republic of Korea Sept. 25, 2019 I wish to address the misleading impression created by a Financial Times article (“WTO rules for Japan in anti-dumping case with South Korea,” September 10) that quoted Japanese officials who claimed that the World Trade Organization appellate body had ruled for Japan in a case where it challenged Korea’s antidumping duty on Japanese pneumatic valves. The core element of this case is whether Korea could continue the anti-dumping duty, and it was effectively decided that Korea could. To come straight to the point, it is another victory for Korea, following the appellate body’s ruling on Korea’s food import ban in April. That being so, I agonise over the recent deterioration of economic relations between Korea and Japan, prompted by the Korean Supreme Court’s judgment late last year upholding the Korean victims’ entitlement to damages for their forced labour during the Second World War.

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In July, Japan responded by imposing export restrictions on three materials used in producing semiconductors and displays that are destined for Korea. In August, Japan removed Korea from the favoured nation list for trading dual-use materials. Japanâ&#x20AC;&#x2122;s unilateral actions have caused serious disturbance not only to the economic relationship between Korea and Japan, but also to the global value chain for electronics industries. On September 11, Korea requested a consultation on the July export restriction under the WTO agreement, hoping to invite Japan into proper dialogue to settle the differences. Given the intricate interdependence between our two nations, conflicting issues of economic interest arise frequently and sometimes become politicised. In the past, Korea and Japan wisely handled such issues through constructive dialogue. It is alarming that such a constructive dialogue is not taking place at the moment between the two important Asian nations. Korea will make every good faith effort to reach a mutually beneficial solution at the requested consultation. I sincerely urge Japan to act reciprocally. Otherwise, Koreaâ&#x20AC;&#x2122;s legal expertise will not be spared in defending our interests, just as they were not in the valves and food import ban cases. Kim Seung-ho Deputy Trade Minister for Multilateral and Legal Affairs, Sejong City, Republic of Korea

Good manners should drive solution to Korea-Japan conflict

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Oct 05, 2019 By Nobuhiro Katsurajima Professor emeritus, Ritsumeikan University

As a person working in bilateral university exchanges For 30 years, I have worked in exchange programs between Korean and Japanese academia and students. Since 2011, I have served as the Japanese head of the Campus Asia exchange curriculum involving Korean, Japanese and Chinese universities, an East Asian version of the European Union's Erasmus program, and promoted a “mobile campus” designed to transcend borders. As a Japanese officer in charge of Korea-Japan exchanges, I believe that the foundation of such exchanges should be based on a humble apology from Japan that requires its reflection on past wrongdoings such as invasions of Korea and China and human rights violations in both countries, and that students should jointly look back on such a historical background. Fortunately, students, who will lead the next generation, understand such a foundation well and are developing friendships with each other today. The worsening relations between Korea and Japan began last year with the Korean Supreme Court ruling that ordered Nippon Steel, (formerly known as Nippon Steel and Sumimoto Metal Corp.) to pay reparations to the four plaintiffs who were former victims of forced labor. I have no choice but to say the fundamental reason for such conflict lies in the Japanese government's laziness in making a proper apology for the nation's previous wars of aggression and colonial rule. Tokyo insists that such issues were “settled” through the 1965 Korea-Japan Claims Settlement Agreement, but this accord did not rule out an individual's right to file a claim for damages. For example, the Japanese

construction company Kashima Corp. was ordered to pay reparations to Chinese victims of forced labor who had filed a lawsuit. Japan also acknowledged that Japanese victims who were mobilized for forced labor in Siberia had the individual right to seek damages from the Soviet Union. In addition, such treaties and agreements were signed despite numerous objections during the Cold War era, and the â&#x20AC;&#x153;compensationâ&#x20AC;? paid under such treaties were related to the benefit of Japanese companies. This clear historical fact proves that Tokyo's arguments are groundless. Nonetheless, since the normalization of relations with Korea, the Japanese government has consistently refused to change its attitude of giving insufficient apologies and showing a lack of contrition for its colonial rule of the Korean Peninsula. My biggest fear is that such an attitude will greatly harm exchanges and trust between Koreans and Japanese. The forced labor victims whom the Korean Supreme Court found in favor of were deceived by Japan and dispatched to Osaka when most of them were teenagers. At the time, they were told that they would learn skills in Japan and later be sent to steelworks in Korea to work. Instead, they were never paid and were forced to perform hard labor that risked their lives. Some of them said they tried to escape but were caught and beaten. Japan must start listening to what these victims say to make a proper apology and show contrition. Yet neither the Japanese government nor media has mentioned these victims. This is cause for major concern. I am just a scholar specializing in the history of thought in Japan's Tokugawa period, not an expert in Korea-Japan relations. But before the era of modernization, both nations built bilateral relations based on good manners. Despite disagreements, the two sides worked to jointly resolve issues through good manners. They were wise enough to temporarily put off an issue that they failed to compromise on. This offers many lessons on mutual trust based on the basic universal values espoused by Zhuzi, a Chinese neo-Confucian philosopher, whose writings have been accepted by both Korea and Japan. Mutual trust laid the fundamental foundation for exchanges between Korea and Japan. If universal values today are said to mean the recognition of human rights without

contrition are due for Japan's colonial rule. To cope with the latest situation, it is important to develop friendship and trust between the people of both countries, more importantly the students who will lead the next generation. Of course, both governments should go back to universal values and hold summit talks as soon as possible. Friendship and trust among the citizens and students of both sides are essential to fix Tokyo's rigid attitude. More active civic exchanges will help achieve a breakthrough in the ongoing situation at the grassroots level. Nobuhiro Katsurajima is a historian and professor emeritus at Ritsumeikan University who specializes in the history of Tokugawa thought and the history of ideas. Translated by Korea.net Staff Writers Kim Eun-young and Yoon Sojung

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discrimination and peaceful international relations on that basis, an apology and

Resume exchanges via shared recognition of history between local gov'ts Oct 11, 2019 By Lee Young-chae Professor, Keisen University

Major Japanese newspapers have recently published front-page articles on the fall in the number of Korean tourists to Japan. According to the Japan National Tourism Organization, the number of Korean tourists visiting Japan in August this year plunged to 308,700, a 48% decline from the same month last year. The drop was about the same as that which occurred after the Great East Japan Earthquake in March 2011. The overall number of foreign tourists who visited Japan also shrunk during the same period. In addition, Japanese grocery exports to Korea plummeted 40% in volume during the same period, a front-page article of The Asahi Shimbun said on Sept. 19. The reduction in the number of international tourists in Japan has had a greater effect on the country's provincial economies. An Okinawa Times article on Aug. 28 said the number of Korean tourists visitingÂ the island in July was 39,700, the first time in two years and four months for the figure to fall under 40,000. The overall number of foreign tourists to Okinawa in August this year was 1.02 million, down 1.6% (16,700) from the same month last year and the first dip in eight years, according to the same daily on Sept. 28. Over the same period, the number of Korean tourists visiting Okinawa was an estimated 23,500, a 44% year-on-year decrease (18,500). Moreover, ten Korean baseball teams canceled training in Okinawa, fueling more fears over the reduction in the number of tourists and private exchange volume. Although Okinawa Prefecture and the Okinawa Convention and Visitors Bureau hosted a seminar on the island's tourism on Sept. 27, no major outcome from that event is expected unless both

seem to face a similar situation. Unlike the Japanese government's prediction, however, more Koreans are voluntarily joining a national campaign to boycott Japanese products, which has prolonged the movement. This has begun to affect the overall economies of Japanese provinces, areas that largely depend on tourism from overseas visitors. As the conflict lingers between both countries, the real problem is the lack of a clear alternative to resolve the situation. Since the 1965 normalization of diplomatic relations between Korea and Japan, post-war bilateral ties have seen advancement focused on cooperation in economy and security. Cultural and private exchanges between both nations remarkably grew after 1998, when President Kim Dae-jung and Japanese Prime Minister Keizo Obuchi adopted the joint declaration dubbed “A New Republic of Korea-Japan Partnership Toward the 21st Century.” Such exchanges grew so dramatically that in 2018, the number of people who took part in them from both countries surpassed 9.7 million. In 2012, however, the number of Japanese sightseers visiting Korea took a considerable hit after President Lee Myung-bak visited Korea's easternmost islands of Dokdo and requested an apology from the Japanese emperor for Japan's colonial rule of Korea. This year, Japan's economic retaliatory measures against Korea that began on July 1 caused the number of Korean visitors to Japan to nosedive. This proves that though the two countries grew closer for 55 years after normalization of bilateral relations and achieved quantitative growth in private and economic exchanges, they failed to achieve qualitative growth in private exchanges because of the effects of political influence. Japanese society is now dominated by an extreme right-wing faction that seeks constitutional revision to justify the country's previous invasions of Asia and colonial rule. The faction's vision of historical revisionism is widely spreading throughout various sectors. Meanwhile, Korean society is mainly led by the generation who led the country's democratization movement and seeks

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countries achieve a breakthrough in bilateral relations. Other local governments

qualitative growth of democracy and peaceful coexistence between the two Koreas. Hence Korean society cannot allow the Japanese extreme right's attempts to beautify Japan's history of invasion and nullify its past colonial rule. And as long as the Abe administration and its extreme rightists remain in power, Japan also cannot change the status quo. Thus considering the longstanding conflict over national identity between Korea and Japan, bilateral private exchange cannot naturally return to its previous level before Japan resorted to economic retaliation on July 1 unless both governments create the opportunity for a dramatic breakthrough. The reduction in both the number of tourists and the volume of private exchanges between the two countries will lead to big losses not only in Japan but also Korea over the long term. In particular, the youths of both countries, who will lead each country's future, could develop negative impressions of each other and the extended halt of private exchange, such as cooperation in various sectors and future-looking education for the next generation, is never desirable. Although the central government has an official yet conflicting political stance to pursue the country's interests, I believe that local governments can present another perspective different from the central government's on private exchange. In the case of Okinawa, many locals there say Japan colonized their island after the Meiji Restoration, during which Japan annexed the Ryukyu Islands. The Battle of Okinawa during World War II in 1945 and the forced presence of U.S. forces there after the war brought civilian damage to the region. This caused many of the natives to hold strong feelings of hostility against the central government and get a victim mentality. For this reason, I believe that Okinawa Prefecture could issue a joint declaration with other provincial cities and regions on reflecting on Japan's history, in contrast to the stance of the central government, and seeking peace in East Asia. Korean society is not rejecting Japanese society as a whole. The motto of the national boycott of Japanese products and tourism in Korea is â&#x20AC;&#x153;No Abe, not no Japan,â&#x20AC;? expressing the strong repulsion of Koreans to the hardline policy

have interpretations of history different from that of their central government. If the proper recognition of history is said to be the foundation, leading local governments and civic groups in Korea have a mature sense of citizenship that allow them to resume tourism and private exchanges with their Japanese counterparts. Although it will take time for Japan's central government to change its stance, if the local governments of the two countries realize the joint peace declaration based on a shared recognition of history and resume tourism and private exchanges, this will serve as a benchmark for civic solidarity between both countries that will fuel momentum to eventually sway Japan's central government. I expect provincial entities and private groups in Korea and Japan can form such a solidarity in a substantial manner. Lee Young-chae is a professor of peace studies at Keisen University in Tokyo. Translated by Korea.net Staff Writer Yoon Sojung.

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of the Abe administration toward Korea. In Japan, many local governments

Japan’s Export Restrictions and Korea’s Responses

4 Infographics Excerpts from Articles on Japan's Export Restrictions

Political Weaponization of Trade

“The really troubling thing about it is that it represents the increasing weaponization of these trade or economic interests to coerce another country over completely unrelated issues” 2019.7.15. / The New York Times

“The trade conflict between Korea and Japan will not only impair their bilateral relationship. But also, it is a telling example of a trade policy weaponized for political purposes.”

2019.7.18. / Frankfurter Allgemeine Zeitung

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“(Japan’s trade restriction) is contradictory to the leadership of Japan, which reaffirmed the principle of freedom, fairness, and nondiscriminatory free trade at the Osaka G20 Summit.” 2019.7.21. / Tokyo Shimbun Op-ed / Prof. Park Cheol-hee/ Seoul National University GSIS

“Leaders of some of the world’s most powerful nations are posing new threats to the global economy by using trade sanctions to punish and coerce other countries on issues that have no substantial connection to trade or economics” Brad Glosserman, deputy director of the Center for Rulemaking Strategies at Tama University in Tokyo, “Japan cannot publicly acknowledge the export curbs are in response to historic disputes because it would run afoul of the WTO rules, he said, but the motivations were clear : to argue there is no connection to the histroic issue is specious and silly”

2019.7.21. / Los Angeles Times

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“Abe, for his part, is abusing trade measures to resolve a political dispute...It’s especially hypocritical for a leader who had, till now, won well-deserved plaudits for strengthening the global trading order” “The damage could go well beyond Abe’s reputation. Japanese suppliers will lose market share – and their reputation for reliability – if some of their biggest customers are forced to look elsewhere” 2019.7.22. / Bloomberg Opinion

The 1965 South Korea-Japan agreement and individual’s right to claim reparation 01

“The separation of legislative, executive, and judicial powers is a principle of a democratic country” “Despite bilateral agreements between countries, it is common sense in light of international law governing human rights that an individual’s right to file a claim for something like forced labor cannot be terminated”

2019.7.23. / Hankyoreh21 Contribution/ Kenji Utsunomiya/ former President of Japan Federation of Bar Association

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“The 1965 South Korea-Japan agreement only withdraws a country’s diplomatic right to protect its individual citizens, not an individual’s right to claim reparation” 2019.7.26. / Yonhap News Agency interview / Masatoshi Uchida / lawyer

“It is only reasonable for Korean victims of forced labor to demand reparation, and the media in Japan are reporting without knowing that the Japanese Government speaks with two different tongues in the same mouth.” “Forcing the people of Joseon into labor during Japanese colonial rule is a serious human rights violation not much different from Germany’s sending of Jews to concentration camps in Auschwitz.”

2019.7.29. / Shukan Asahi/ Hirose Takashi

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Destruction of Free Trade Order

Analysts say the share rallies aren’t expected to last for Samsung and SK Hynix. Damage to South Korea’s chip productuion has consequences for the global supply chain that includes U.S. companies such as Apple Inc., which buys chips from South Korea.

2019.7.11. / The Wall Street Journal

Shaun Roache, chief Asia-Pacific economist at S&P Global Ratings, said Tokyo’s export controls were a sign that technology is increasingly being used as a “geopolitical tool” by governments who might not understand the economic cost of their actions. “Honestly what is concerning is that I don’t think we fully understand the implications of messing around with suplly chains,” Mr Roache told the Financial Times in Seoul. “They are incredibly complicated and the negative impact for the country imposing the controls could be much larger than people think”

2019.7.11. / Financial Times

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“If this is used too often, there’s real potential to absolutely destroy the entire international trading system” said Bryan Mercurio, an expert on international trade law at the Chinese University of Hong Kong.” 2019.7.15. / New York Times

As the supply of South Korean microchips to United States slows due to Japan’s restrictive policies, firms with clout like Apple may not be affected. Smaller and more innovative U.S. firms could face shortages, Stangarone said. 2019.7.16. / UPI article

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The complicated web of supply chains involved in the production of popular tech products means that escalating trade tensions between the East Asian neighbours could lead to higher prices for customers globally, according to the analaysts. “Japan’s decision to place export restrictions on South Korea will ripple out to other countries,” said Troy Strangarone at the Korea Economic Institute in Washington. “The downside to the type of weaponised interdependence that Japan is using to coerce South Korea is that...there will be collateral damage as interdependent links are disrupted” 2019.7.18. / South China Morning Post

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, says if Japan’s export controls remain in place for a prolonged period it “could disrupt the global electronics supply chain” given South Korea’s dominance in the memory chip market. He says the price of memory components “could significantly increase due to the inability of the other memory suppliers to meet global demand.” 2019.7.23. / BBC

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“Non-transparent and unilateral changes in export control policies can cause supply chain disruptions, delays in shipments, and ultimately long-term harm to the companies and operate within and beyond your borders and the workers they employ.” 2019.7.24. / The Hankyoreh / An open letter to both Korea and Japan by six U.S. tech associations

“Considering the importance of semiconductor manufacturing in Korea, Japan’s trade restriction is a hostile act that will seriously damage the Korean economy.” “The Japanese trade restriction is against the principle of free trade, and it will also negatively impact Japan’s economy.” 2019.7.27. / SBS / 75 Japanese Intellectuals / statement

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Economic Impact and Public Opinion in Japan 01

“conflict between Korea and Japan, rational diplomacy is needed rather than dispute” High-ranking officials from Korea, Japan and the U.S. will be in Bangkok for the ASEAN Foreign Ministers’ Meeting. The foreign ministers of both Korea and Japan will also attend. The meeting between representatives of the two countries requires rational diplomacy, not bickering or stone-faced expressions.

2019.7.26. / Asahi Shimbun Op-ed

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“The Battle at the WTO: no exit for both Korea or Japan” If there is no attempt to overcome the confrontation, we cannot say diplomacy is engaged. Korea and Japan should try to seek compromise through dialogue. 2019.7.26. / Mainichi Shimbun Op-ed

“The WTO issue between Korea and Japan should be calmly resolved through dialogue” The process of settling disputes at the WTO will take more than two years. Both the winner and loser will end up with hard feelings. Korea and Japan should seek clues to resolving the conflict through dialogue. 2019.7.26. / Tokyo Shimbun Op-ed

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FACT CHECK NO.1 Has Korea repeatedly rejected Japan’s requests for policy dialogue? No, it has not. Japan blames Korea for a 3-year hiatus in Director-General (DG) level policy meetings regarding export controls, but MOTIE is not solely responsible for this. Back in June 2018, Japan’s METI didn’t make any response to MOTIE’s offer to host a lower director-level policy meeting. MOTIE proposed it due to scheduling conflicts between DGs. In December 2018, MOTIE asked to reschedule the DG policy meeting for some time after March 2019. METI agreed to this request. Other than DG-level talks, the two countries have shared information over export controls and cooperated through multiple seminars and conferences throughout the year. The UNSCR 1540 Industrial Outreach Conference that Korea hosted last year was one such venue where offers a chance to exchange opinions on several issues including the hosting of a bilateral meeting. It doesn’t make logical sense to say that Japan will take Korea off a 27-country white list on trade because of a “breach of trust” caused by the absence of bilateral policy dialogue in the last few years. Some of the countries on Japan's white list haven't created bilateral channels of communication yet, but will stay on the list.

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FACT CHECK NO.2 As a reason for removing Korea from its whitelist, Japan claims that Korea has weakness in its catch-all controls for conventional weapons. This is a groundless allegation. Korea has administered its catch-all system on conventional weapons since its introduction in 2003. The ROK adopted all the guidelines recommended by the four international control regimes: the Wassenaar Arrangement (WA), the Nuclear Suppliers Group (NSG), the Australia Group (AG), and the Missile Technology Control Regime (MTCR). It has an institutional framework necessary to implement catch-all controls for conventional weapons. The statutes currently in force include the Foreign Trade Act, the Public Notice on Exportation and Importation of Strategic Items, and the Public Notice on Special Measures on Trade to Fulfill Duties for Maintaining International Peace and Security. A recent report by the Institute for Science and International Security (ISIS) found that Korea stand ahead of Japan in the evaluation of the effectiveness of national strategic trade controls, which include controls on the conventional weapon. Korea ranked 17th in ISISâ&#x20AC;&#x2122;s Peddling Peril Index in 2019, while Japan stood at 36th.

Japan’s Export Restrictions and Korea’s RESPONSES