South Korean leader denounces Japanese comments over sanctions

South Korean President Moon Jae-in on Wednesday criticized comments by Japanese officials who questioned the credibility of Seoul's sanctions against North Korea while justifying Tokyo's stricter controls on high-tech exports to South Korea.

The issue has become a full-blown diplomatic dispute between the neighboring U.S. allies.

A view of the Busan Container Terminal in the Port of Busan in Busan, South Korea, October 21, 2017. [File photo: IC]

In a meeting with South Korean business leaders at Seoul's presidential palace, Moon said his government was committed to resolving the matter diplomatically and urged Japan to refrain from pushing the situation to a "dead-end street."

Tokyo last week tightened the approval process for Japanese shipments of photoresists and other sensitive materials to South Korean companies, which need the chemicals to produce semiconductors and display screens used in TVs and smartphones.

Moon spoke hours after South Korean officials told a World Trade Organization meeting in Geneva that the Japanese measures would have repercussions for electronics products worldwide and called for their withdrawal. Japanese officials countered that the measures didn't amount to a trade embargo, but rather a review of export controls based on security concerns.

"(Our) government is doing its best to resolve the issue diplomatically ... (I call for) the Japanese government to respond. It should no longer walk straight toward a dead-end street," Moon said in a meeting with the senior executives from 30 of South Korea's biggest companies.

"The Japanese government's move to inflict damage on our economy to serve political purposes and link (the issue) with sanctions against North Korea without any evidence is surely not ideal for the friendship and security cooperation between the two countries," he said.

The Seoul government sees the Japanese trade curbs as retaliation to South Korean court rulings that ordered Japanese firms to compensate aging South Korean plaintiffs for forced labor during World War II and plans to file a complaint with the WTO.

Japanese officials say such materials can be exported only to trustworthy trading partners, hinting at security risks without citing specific cases, while rejecting suggestions that the move was driven by a worsening in ties between the two countries related to historical issues.

Tokyo hasn't elaborated on the alleged security risks, but Japanese Prime Minister Shinzo Abe and his conservative aides have hinted there may have been illegal transfers of sensitive materials from South Korea to North Korea.

South Korea has denied the allegations, with its Foreign Ministry summoning a Japanese Embassy official on Monday to protest Abe's suggestion that it could not be trusted to faithfully implement sanctions against North Korea.

South Korea's trade minister on Tuesday said an "emergency inspection" of companies that process and export the chemicals imported from Japan found no sign of illegal transactions allowing them to reach North Korea or any other country affected by United Nations sanctions.