Japan and Korea feud grows
There is a report that Japan has removed South Korea from their trusted export White List.
The removal from the White List to take effect August 28.
Japan and South Korea are mired in a controversy as a result of dispute about compensation for wartime forced labor.
A South Korea court awarded damages against Japanese companies for forced labor during the second world war. Japan says that all such claims were settled by a 1965 treaty under which a paid compensation to the South Korean government.
Recently Japan impose controls on three chemicals crucial to South Korea's semi conductor industry which could potentially cripple that industry. The controls are thought to be in retaliation for South Korea's refusing to get and arbitration hearing on the fines. If South Korea cannot source Japans Key chemicals, it would impact global supply chains for chips and even smart phones.
According to sources if Tokyo removes Seoul from the White List, South Korean companies could be obliged to seek individual approvals for 857 of the 1120 strategic materials they import from Japan. This is according to a research note from Korea Investment and Securities.
Needless to say, the relationship is strained.
