Seoul to spend $4.1 billion for parts, materials industries amid trade row with Japan

Seoul to spend $4.1 billion for parts, materials industries amid trade row with Japan (Yonhap)

Seoul: South Korea plans to inject more than 5 trillion won ($4.1 billion) into its support of the local parts and material industries by 2022 in a bid to tackle Japan’s export curbs against the South, cut dependence on Japanese imports and boost localization, the industry ministry said Wednesday.

The move is aimed at stabilizing supplies of parts, materials and equipment, and spurring their localization, as South Korea seeks to reduce heavy reliance on imports of Japanese materials.

Under the scheme that will run from 2020 to 2022, the government plans to select more than 100 vital industrial materials, parts and equipment to foster related research and development (R&D) projects by the end of this year.

The government will also help speed up the implementation of three R&D projects worth 1.9 trillion won, which have recently received government waivers for preliminary feasibility studies.

“Through strategic investment in research and development projects for materials, parts, and equipment, (South Korea) will ease its external dependency in such areas,” the industry ministry said in a statement.

The products will receive customized support considering their level of technology and possibility of finding alternatives import sources.

The ministry did not reveal details on the 100 items, citing industrial confidentiality. South Korea, however, has been putting emphasis on fostering its chip, display, automobile, electronics, machine, and chemical industries since earlier this year.

Japan implemented export restrictions of key industrial materials to South Korea last month. The neighbor also officially dropped Seoul from its list of trusted trade partners, which took effect earlier in the day.

Last week, South Korea’s trade ministry, which has been making preparations to file a complaint with the World Trade Organization, also started the process to drop Japan from its list of trusted trading partners, in a tit-for-tat move.

Tokyo claims that its export curb was motivated by South Korea’s lax export control of sensitive goods.

South Korea, which rebutted Japan’s allegations, claims the unprecedented move is retaliation for its court rulings that ordered Japanese firms to compensate Koreans forced into labor during Tokyo’s 1910-45 colonial rule of the Korean Peninsula.

YONHAP