Ignoring Korea's continued calls for a diplomatic solution, Japan on Friday has removed Korea from its 'whitelist' of trusted trading partners after all.
President Moon Jae-in, in an unusually strong tone, expressed deep regret over Japan's 'reckless decision', vowing stern countermeasures against what he called a clear trade retaliation.
Finance Minister Hong Nam-ki echoed President Moon's words, announcing that Korea, too, will remove Japan from its whitelist of trusted trade partners.
Today we go in-depth on the impact of Tokyo's second round of trade curbs against Seoul and possible countermeasures.
For that we have two experts in the studio tonight, Dr. Kim Young-han, Professor of Global Economics at Sungkyungkwan University and Dr. Song Soo-young, Professor of Finance at Chung Ang University. Welcome to our program.
Q1. With Japan's removal of Korea from its so-called 'whitelist' of trading partners, the items that will have to go through tougher import procedures would be expanded from the current three high-tech materials to hundreds of other items. Could you first tell us what kind of items are to be affected?
Q2. Which industry and which items do you think Japan will target following Korea's semiconductor industry? Which industry would be the hardest-hit?
Q3. Currently Japan is Korea's third largest export nation, and given the huge trade surplus Japan enjoyed every year from its trade with Korea, doesn't this mean it could backfire on Japanese firms?
Q4. What are the chances of Japan not giving export approvals at all even after Korea follows necessary procedures for non-listed nations, citing security reasons?
Q5. President Moon Jae-in convened an emergency Cabinet meeting today and right before the meeting began, he hinted at tit-for-tat measures from Korea, saying Korea has its own cards to play. What do you think are some of the possible options?
Q6. Foreing Minister Kang Kyung-wha, during her talks with Japanese FM Taro Kono warned that Korea may suspend the Seoul-Tokyo General Security of Military Information Agreement, or GSOMIA, if Japan forges on with its economic retaliations. Could that be a possible option and how effective will the GSOMIA card be?
Q7. Korea is placing its focus on finding alternate sources of Japanese imports and the use of home-grown technology to produce necessary items. Extra budge is also in the works to support necessary finances for Korean firms. How do you assess the government's efforts so far?
Q8. Asian stocks tumbled today on Japan's removal of Korea from its whitelist with Korea's benchmark Kospi plummeting to below 2000. What's your market forecast in the short-term and long-term?