Japan considers strengthening export restriction as Korean government prepares to file complaints to WTO

Turning to the big trade story of the week,... one that could have serious repercussions for the export-driven South Korean economy.
The Japanese government will impose restrictions on the shipment of chip supplies to South Korea starting Thursday amid an ongoing row over a sensitive historical issue.
While Japanese media reports that Tokyo is even considering expanding the list of restricted products, Seoul has started a legal review ahead of the possible filing of a complaint to WTO.
Lee Min-sun reports.
The South Korean government is undertaking a legal review ahead of its plan to lodge a complaint with the World Trade Organization over Tokyo's recent announcement to impose restrictions on exports of chip supplies to South Korea.
A trade ministry official in Seoul said the review was started as Japan's export restriction is deemed to be in violation of WTO regulations.
Japan's decision came after the South Korean Supreme Court ordered Japanese companies to compensate Korean victims for wartime forced labor during the Japanese colonial period.
The restriction takes effect Thursday on three supplies: fluorinated polyimides, photoresists and etching gas.
These materials are needed to produce semiconductors and display screens for smartphones and TVs.
In addition, Tokyo-based Kyodo News Agency reported Tuesday that Japan is considering adding more products to the export restriction list.
They are likely be electric components that can be used for military purposes.
According to the report, Japanese authorities are in the process of removing South Korea from a "white list" of countries that can buy electronic components from Japanese companies relatively easily.
Japan's export restrictions could cause a trouble for Korean chipmakers like Samsung Electronics and SK Hynix as Japan controls 70 to 90 percent of the global production of the three materials.
With only a day left until the new export restriction takes effect, South Korean firms are taking actions to minimize damage to their operations.
The companies have dispatched representatives to Japanese suppliers to secure as many supplies as possible, while identifying exactly which materials will be affected.
Lee Min-sun, Arirang News.