Japan-South Korea Trade Dispute Could Hurt Supply Chains Involving 5G, Says AEI Scholar

Japan chose a “dangerous and destructive mode of retaliation” in its trade dispute with South Korea, “one that is likely to greatly disrupt global electronic supply chains and bolster China’s push for dominance of 5G wireless," blogged American Enterprise Institute trade scholar Claude Barfield. Japan controls about 90 percent of the markets for two of the three chemicals, and 70 percent of the third, necessary to make semiconductors and flexible display panels, said the former consultant to the Office of the U.S. Trade Representative. It’s threatening to remove South Korea from the white list of countries with privileged security status, he said Tuesday. “This would force Korean companies to go through a time-consuming procurement process in the future," causing disruption to the global supply chain that would “ripple outward,” he said. South Korea asked the secretariat of the Wassenaar Arrangement to mediate the dispute with Japan, since both countries signed the 1996 agreement on curbing export of sensitive dual-use goods to rogue states. Japan claims South Korean manufacturers are allowing the chemicals to go to North Korea. "The secretariat responded that it has no mechanism to intervene in bilateral issues that may arise between member states," Korean press reported.