On July 1, 2019, Japan introduced measures to strengthen export restrictions on South Korea.

The announcement came eight months after our Supreme Court ordered compensation for forced labor against Japanese companies, targeting high-tech parts essential for TV, smartphone, and semiconductor production.



At the time, there were three items that Japan imposed export restrictions on.

Fluorine polyimide, a flexible display material, resist, a photosensitizer for painting semiconductor substrates, and high-purity hydrogen fluoride for cleaning.

All of these items have Japan's global market share of over 70%, requiring Japanese companies to obtain permission from the relevant authorities whenever they export to Korea.

Previously, export permits were granted comprehensively on an annual or semi-annual basis, but since then, regulations have been strengthened so that each export permit is obtained on a case-by-case basis.



Going one step further, Japan announced that it would remove South Korea from the so-called 'white list' that exempts export licenses.

And on August 2nd, about a month later, we actually decided to amend the Export Trade Control Ordinance to exclude Korea from being a white country.

Retaliation against our Supreme Court's 2018 ruling on compensation for forced labor seemed clear, but the Japanese government denied it.

A Japanese government official asserted, "This is to strictly operate the system because an inappropriate matter has arisen in export control related to Korea."



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As Japan's export restrictions became a reality, a large-scale boycott of Japanese products took place in Korea.

A boycott of Japanese beer and clothing, which were popular at the time, spread.

Notices were posted at convenience stores announcing the cessation of sales of Japanese products, and courier workers refusing to ship Japanese products.

The boycott spread not only to consumer goods but also to travel products, and suffered considerable damage to Japanese local cities, where Korean tourists accounted for a large proportion.


Disappearing 'No Japan'


Is it because of the great storm of COVID-19?

Almost three years later, the boycott of 'NO JAPAN', which seemed like a fire at the time, is no longer found.

Due to the impact of retaliatory consumption caused by Corona 19, Japanese fashion companies' Korean performance has turned to recovery, and the amount of imports of Japanese products is gradually increasing.

For example, in the case of Descente Korea, sales last year were 543.7 billion won, up 9% from a year ago.

Operating profit also recorded a surplus of KRW 11.5 billion.



Uniqlo, one of the main targets of the boycott, also improved significantly.

FR Korea, UNIQLO's domestic operator, recorded 582.4 billion won in sales last year, down 7.5% from the previous year, but turned to black with an operating profit of 52.9 billion won.

Japanese beer is also showing signs of recovery.

According to the Korea Customs Service, beer imports from Japan were $2,666,000 in the first quarter of this year, up 55% from the previous year.

Beer imports from Japan increased by 21% last year and are continuing a steep upward trend this year.

As alcohol consumption increased due to easing of social distancing, etc., Japanese beer imports recorded $1.53 million last month, the highest since July 2019, when the boycott of Japanese products began.


How different is Japan?


So, how different was Japan, which sparked the boycott?

According to the Ministry of Trade, Industry and Energy's coverage, none of the regulatory measures taken by Japan three years ago have changed.

Korea was still excluded from the 'white list' target countries exempting export licenses, and export regulations for fluorine polyimide, resist, and high purity hydrogen fluoride remained the same.



What has changed is that after Japan's export restrictions, we minimized Japanese risks by selecting 100 core technologies and developing them ourselves or by strengthening competitiveness in materials, parts, and equipment, such as diversifying import sources.

However, the inconvenience of importing items that are unavoidable from Japan to be imported after obtaining permission from the Japanese government in accordance with the procedures set by Japan continues.



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The industry forecast is that the Japanese government is unlikely to lift the regulations on its own unless the issue of the past, which became the starting point of Japan's retaliatory measures, is resolved.

It is said that it will take a considerable amount of time before the results of the complaint to the WTO come out, and even if the WTO and the WTO support us, it will be difficult to restore everything as it was in the past.



Now that the boycott is slowly coming to an end, what kind of attitude should we take toward Japan, which has not changed?

Now that we have overcome the retaliatory measures on our own, should we be merciful and reach out first?

Or should we stay vigilant for another possible clash ahead?

The answer is unknown, but it seems clear that efforts are needed to untangle the tangled relationship for both countries.

(Although it was said that the line of the Abe government was succeeded) I look forward to finding a solution from the newly launched Japanese cabinet and the Korean government, which will also be launched next month.



(Photo = Yonhap News)