South Korea restores Japan’s preferred trade status
KIYOSHI OTA/POOL PHOTO VIA ASSOCIATED PRESS
South Korean President Yoon Suk Yeol, left, and Japanese Prime Minister Fumio Kishida shake hands ahead of their bilateral meeting at the prime minister’s office in Tokyo, March 16. South Korea has formally restored Japan to its list of countries it gives preferential treatment in trade, three years after the neighbors downgraded each other’s trade status amid a diplomatic row over historical grievances.
South Korea reinstated Japan to its list of preferred trading partners, a major step in mending ties with a long-time rival that also aligns with Washington’s efforts to create a global supply chain less reliant on China.
The return of Japan to South Korea’s “whitelist” of trusted trade destinations will cut red tape for exporters by shortening the review period for approval of strategic goods heading to Japan to five days from 15, and the number of required documents to three from five, according to an announcement Monday from Korea’s Ministry of Trade, Industry, and Energy.
The development is part of broader attempts by both nations to fix strained diplomatic ties, rooted in disagreements over wartime labor and compensation, as well as concerns about the sharing of sensitive technology. The relationship worsened in 2019 when Japan removed South Korea from its own preferential list, leading to reciprocal action.
The recent reconciliation efforts symbolize a significant step forward for two Asian economies that play crucial roles in the global supply chain and have strong ties to the US.
Seoul’s announcement comes as South Korean President Yoon Suk Yeol prepares to visit the US, accompanied by more than 100 executives from the country’s top firms. During this visit, Yoon is expected to meet with US President Joe Biden to discuss economic cooperation and the development of supply chains less dependent on China for items such as semiconductors.
Yoon has been a supporter of Washington’s Asia strategy, including Biden’s initiative to restructure global supply chains to reduce dependence on China. The Biden administration is set to announce an executive order in the coming weeks that will limit investment in key parts of China’s economy by American businesses. Other policies have aimed at hindering China’s progress in a range of cutting-edge technologies.
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Yoon has proposed a resolution for the long-standing dispute over compensation for Japan’s use of Korean forced labor during its 1910-45 occupation of the peninsula. His proposal, which involves South Korean firms contributing to a compensation fund for conscripted Korean workers, has not been well-received by the majority of the local public.
South Korea’s latest decision is likely to facilitate further collaboration with Japan and the US in areas such as regional security, technology and climate change.
