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2nd453 Tokyo strikes back (KOR) July 02,2019 Tokyo is about to take retaliatory action against South Korea for Supreme Court rulings demanding Japanese companies compensate individuals forced to work during World War II.  According to a Sankei Shimbun report, the Japanese government will impose restriction on Japanese exports to South Korea of three key materials used in smartphones, displays and semiconductors from July 4.  Tokyo is aiming straight at Korea’s mainstay exports. Japan will stop preferential treatment for the three key materials bound for South Korea, requiring exporters to seek permission every time they ship items to South Korea.  Tokyo has not confirmed the report. But its plausibility is high, given the cold response Tokyo showed to South Korea’s president last week at the Group of 20 (G-20) summit in Osaka, Japan and to a team of Korean lawmakers visiting in May. Underscoring the icy ties, Prime Minister Shinzo Abe greeted Korean President Moon Jae-in with just an eight-second handshake at the G-20 summit.  Damage to Korean companies is inevitable. Tokyo wants to bully its way forward by hurting Korean companies instead of dealing with the matter directly with Seoul.  Some think Tokyo has decided on retaliatory action for political gain ahead of July 21 upper house elections.  But economic retaliation could backfire on Japan. Losing Korean clients, who are the world’s largest in chip and display production, could boomerang on Japanese suppliers. The two countries rely on one another in complicated supply chains.  Over the last decade, companies in the two countries have been engaged in over 100 overseas resource developments. Any fissures in those long-held partnerships would only benefit rivals in other countries.  Business relationships must remain intact regardless of diplomatic friction. The Japanese government must not make a mistake out of shortsightedness. The Korean government must make extra efforts to restore the relationship and protect economic cooperation.  JoongAng Ilbo, July 1,

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