Japan threatens sanctions to South Korea
It can seriously disrupt economic supplies for both sides
/NOVOSTIVL/ The prospect that Japan could impose economic sanctions on South Korea over a legal dispute concerning wartime labor cases has raised anxiety in Seoul and among companies on both sides that depend on cross-border supply chains. This article appeared in the Nikkei Asian Review.
South Korea's Foreign Ministry said Wednesday that Kim Yong-kil, director-general for Northeast Asian affairs, will meet here Thursday with his Japanese counterpart Kenji Kanasugi to discuss the issue, in which Japan-based industrial groups have been ordered to compensate forced-labor victims
The two senior diplomats may discuss a sanctions threat issued by Japanese Finance Minister Taro Aso this week that set off alarm bells.
Japan could take "various retaliatory measures" against Seoul, "including not only tariffs, but also halting remittances and visa issuances," Aso told lawmakers on Tuesday.
This reflects the level of frustration in Tokyo over South Korean court decisions ordering Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal to compensate Koreans forced to work for them during World War II. A court approved the seizure of Nippon Steel assets in South Korea, and plaintiffs have filed a similar request for Mitsubishi Heavy.
Stopping cross-border money transfers could cause serious problems for companies that do business in both countries. Suspending visa issuance would risk a plunge in the number of South Korean visitors to Japan - which came to 7.53 million last year - and the economic benefits they bring through their spending.