SEOUL -- President Moon Jae-in chaired a rare session with business leaders to pool their wisdom together in riding out "an unprecedented emergency situation," warning that South Korea may have to get ready for all possibilities such as a prolonged row with Japan.
Raising the level of criticism, Moon blasted Japan for using export restrictions for political purposes and making groundless remarks that link them to sanctions against North Korea, which are "by no means desirable for bilateral friendship and security cooperation."
"Most of all, the government is doing its best to resolve the issue diplomatically. I hope the Japanese government will respond without going further to a dead end," Moon said at talks with the heads of 30 large business groups. Business leaders were allowed to speak, but the presidential Blue House did not disclose what they said.
The South Korean economy, which is highly dependent on exports, now faces mounting external difficulties, Moon said, citing trade protectionism, a trade war between big powers and Japan's economic retaliation.
The government and businesses are required to activate an emergency response system "since this is an unprecedented emergency situation," Moon said. "We cannot rule out the possibility of a prolonged situation in diplomatic efforts to resolve the issue, and we must prepare for all possibilities, although it is a very regrettable situation."
South Korea had maintained a relatively composed attitude since Japan strengthened regulations on exports of three high-tech chemicals -- photoresists, fluorine polyimide and etching gas -- which are used in semiconductors and smartphone production.
In a TV debate, Japanese Prime Minister Shinzo Abe raised suspicions that South Korea may not abide by sanctions on North Korea. Koichi Hagiuda, the executive acting secretary-general of Abe’s Liberal Democratic Party (LDP), has said that security reasons were behind export restrictions, citing "concerns" that high-tech materials could end up in North Korea and be used for military purposes.
Along with an international campaign through the World Trade Organization (WTO), South Korea turned to the offensive from Tuesday, accusing Abe of making "groundless" remarks over non-compliance in sanctions against North Korea to justify export restrictions. Abe's remarks fanned anti-Japanese sentiment.
Ties between the two Asian neighbors have been in the doldrums for years, with South Korea insisting that Japan should apologize and make amends for abuses during its colonial rule. In particular, Seoul wants Tokyo to address the issue of women forced to work in Japanese wartime military brothels.
The two countries are locked in a fresh row over a decision by South Korea's highest court in October last year that acknowledged individual rights to get compensation for wartime forced labor. The Supreme Court upheld a 2013 ruling that ordered Japan's Nippon Steel & Sumitomo Metal Corp. to pay 100 million won each to four Korean victims.
Tens of thousands of Koreans were forced to work under harsh conditions for Japan, but many have died. Government data at the time showed that there were 6,570 survivors.
Japan has insisted colonial-era issues were settled in a 1965 agreement that restored diplomatic ties with the payment of $500 million. However, supreme court justices ruled that they cannot accept the Japanese court's ruling because it was based on the premise that forced labor during Japan's colonial rule was legitimate.
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