Japan will ease export controls of key chip materials against South Korea after Seoul decided to retract its complaint with the World Trade Organization over the matter, the two countries' industry ministries said Thursday in the latest sign of improving bilateral ties.
The decisions came as Japanese Prime Minister Fumio Kishida held talks with visiting South Korean President Yoon Suk Yeol the same day. Kishida said in a joint press conference after their meeting that there was "progress" in discussions regarding export controls.
"Dialogue among relevant ministries and agencies will advance from now on," Kishida added, a few hours after the announcement on eased regulations on exports of three materials.
The Japanese trade ministry also said it will continue to study whether to reinstate South Korea as a preferential trade partner, that status having been removed after the export controls were imposed.
In July 2019, the Japanese government tightened controls on exports to South Korea of three materials -- fluorinated polyimide, resists, and hydrogen fluoride -- used in the production of chips after bilateral ties worsened over wartime labor and other issues.
It also removed South Korea from the list of so-called Group A countries, formerly known as "white list countries," entitled to receive minimum restrictions on purchasing goods such as electronic components that can be diverted for military use.
Once South Korea returns to Group A, controls on the three goods will be fully reverted to the conditions prior to the tightened export controls, said an official of the Japanese trade ministry.
Bilateral ties hit their lowest point in decades after South Korea's Supreme Court in 2018 ordered two Japanese firms to compensate Korean plaintiffs for alleged forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.
While Japan said the export controls were based on security concerns, South Korea viewed the measures as retaliation against the court rulings and filed a complaint against the export restrictions with the WTO.
The soured bilateral relations also triggered a move to boycott Japan-made goods in South Korea.
Upon the announcement of a solution to the wartime labor dispute by South Korea earlier this month, the two countries said they will begin talks on lifting export controls.
The move coincides with a recent trend among some U.S. allies and partners ratcheting up efforts to boost supply chain resilience of crucial goods in the wake of Russia's invasion of Ukraine and China's growing military clout.
In February, Japan, South Korea, the United States, and Taiwan held the first meeting of senior officials under a new U.S.-led initiative, dubbed the "Chip 4" alliance, aimed at maintaining supply chain resilience in times of natural disasters and other contingencies.
That same month, senior officials of Japan, the United States and South Korea held the inaugural meeting of a trilateral dialogue on economic security in Hawaii.
They discussed quantum and space technologies, as well as how to improve supply chain resilience for semiconductors, batteries and critical minerals.
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