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South Korea’s five business organizations filed joint petition to Japan’s Ministry of Economy, Trade and Industry on Tuesday, demanding Tokyo to withdraw its regulatory moves on Korea-bound exports as it readies to strip the nation of a preferential status in outbound shipments of dual-purpose materials and technologies.

The possible removal of Korea from the white list where 27 countries are on for fast-track procedures on export-control items for security reasons could not only undermine the long-established trust between companies of both countries but also raise uncertainties in bilateral trade as well as disrupting global value chain, said the Korea International Trade Association, Korea Chamber of Commerce & Industry, Korea Employers Federation, Korea Federation of Small and Medium-sized Businesses and Federation of Middle Market Enterprises of Korea said in the statement.

They added the measure would have a considerable negative impact on industries of both countries and the global economy.

The Japanese government announced on July 1 that it is reviewing to drop Korea from its 27 white list countries benefitting from simplified approval procedure for shipments of key materials by revising its export and trade act. The public comment period for the possible revision is scheduled to end on July 24. As many as 1,100 items could be affected if Korea loses the status.

The organizations pointed out in the statement that the Japanese government failed to offer a specific reason to support its claim that the confidence between the two nations has been seriously damaged, and criticized that it did not have talks or prior negotiation before announcing the measure.

In addition, they strongly argued that the revision should be nullified at a time when the two nations should reinforce cooperation to get ahead in the fierce competition in the global market to lead emerging industries.

Since July 4, Japan has tightened shipments to Korea of three key materials used in manufacturing semiconductors and displays - fluorinated polyamides, photoresists and hydrogen fluoride. Seoul has been denouncing the measure as it believes it is part of Tokyo’s retaliatory action against the Korean court rulings that ordered compensation for wartime forced laborers to Japanese firms.

The country’s trade ministry also plans to submit its statement of arguments on Tuesday to the Japan’s trade ministry via the Korean embassy in Tokyo and email. The ministry argued in the statement that is 10 pages long that Tokyo’s claim on Seoul’s inadequate controls for strategic materials and lack of bilateral trust is groundless, and its export restriction measure is in violation of the World Trade Organization (WTO) rules, according to sources.

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