[ti:Japan Raises Trade Tensions with South Korea in Dispute]
[00:00.12]Japan plans to remove South Korea from its list of top trading partners in a dispute that may be linked to historical tensions between the sides.
[00:15.92]The cabinet of Japanese Prime Minister Shinzo Abe approved the plans on Friday.
[00:24.44]As a result, Japan would remove South Korea from a list of what are known as "white countries" with preferred trade relations.
[00:38.52]Such countries enjoy easier trade requirements than other nations.
[00:46.16]Starting on August 28, however, Japanese companies must seek government permission to export to South Korea products that could have military uses.
[01:02.72]South Korean President Moon Jae-in called the move "selfish" and warned it could damage the world economy.
[01:12.96]Earlier, a South Korean presidential spokesperson promised a "resolute" answer to Japan's move.
[01:23.80]Last month, Japan restricted exports of a small number of important, high-technology materials to South Korea.
[01:36.28] The materials are used to make semiconductors and parts for electronic products that are important to South Korea's export-fueled economy.
[01:51.40]Japan's decision to remove South Korea from the list is widely considered an action to answer rulings by South Korea's Supreme Court.
[02:05.56] In October, the court ordered some Japanese companies to pay Koreans who performed forced labor during World War II.
[02:17.88]The Japanese government says all such disputes were settled in a 1965 treaty between the two sides.
[02:30.80]Under the same agreement, the countries established diplomatic ties.
[02:38.60] The current trade issues, Japan says, are the result of national security concerns.
[02:47.00]The country pointed to "improper incidents" involving exports to South Korea.
[02:56.04]But some Japanese officials have appeared to link the decisions to the historical disputes.
[03:06.08]Japan has the world's third largest economy, while South Korea has the 11th largest.
[03:15.56]A trade war between the two could affect not only East Asia, but the world economy.
[03:24.28]It could threaten the international technology supply chain because South Korea produces about 70 percent of the world's computer memory chips.
[03:39.68]Tobias Harris is a Japan expert at the business advisory group Teneo.
[03:49.00]He says the effect of the new policy depends on how strongly Japan restricts exports.
[03:59.48]Harris said that, when Japan ordered restrictions on trade with South Korea in July,
[04:08.00]officials suggested it would be difficult for Japanese companies to export the affected products.
[04:18.08]With its latest move, Harris said, the Japanese government appears to be putting "Korea at the same level as Japan's other trading partners in Asia.
[04:32.00]Presumably, it won't be a total embargo so as to limit the direct impact on Japanese firms," he added.
[04:43.60]However, the dispute could hurt United States efforts to negotiate an end to North Korea's nuclear weapons program.
[04:55.48]The U.S. government has urged both sides to resolve their dispute.
[05:03.44] Matthew Goodman is a specialist on Asian economics at the Center for Strategic and International Studies.
[05:14.32]He says it is understandable that Japan is "frustrated" with the issue of World War II forced labor and concerns over exports.
[05:28.64]But he warned, "This issue is likely to set back the progress Japanese Prime Minister Abe has made
[05:37.72]over the past few years as an economic leader in the region and the world."
[05:46.12] The Japanese companies named in the South Korean court ruling have yet to pay the money to the forced labor victims.
[05:56.48] Some of the survivors, who first brought the case, have started legal action to seize some of the companies' property to pay for a settlement.
[06:10.12]Japan says it cannot accept the rulings.
[06:14.84]But the South Korean government says it cannot overturn them because that would harm the independence of the country's court system.
[06:27.80]I'm Mario Ritter Jr.