(unofficial translation)

Despite the Korean government’s repeated warnings, Japan, through its cabinet meeting held today, decided to remove Korea from its so-called White List.

Today’s decision contradicts the principle of free trade advocated during the G-20 Osaka Summit by nobody else but the Japanese government itself. Also, today’s measures impose a de facto export restriction on 1,194 key materials and parts, and thus has the intention to hamper the future growth of our nation. In this regard, Japan’s action is very disappointing, and when considering our future relationship, it is deeply regrettable and worrisome.

We need to keep in mind the fact that technology and entrepreneurs are the basis to national development.

Korea must now put an end to the so-called “Cormorant Economy”, in which when Korean exports increase, the imports of key materials and parts from Japan grow accordingly. If today’s action by the Japanese government were taken 20 years ago, the situation would have been much more dire. Yet, although it may not be easy, today we have the ability to overcome whatever hardship we face.

First, with regards to domestic industries, we must establish an industrial ecosystem in order to resolve the issue at hand. We must resolve issues pertaining to the domestic business environment and labor restrictions to strengthen our competitiveness in key materials, parts, and equipment, and at the same time greatly expand R&D investment.

Furthermore, the public officials who are engaged in such policies must be exempt from policy audits to prevent them from adopting an indifferent and passive attitude. The government will actively support our businesses as they pursue overseas M&A. In addition, to facilitate an influx of skilled technological manpower to Korea from abroad, we will provide a variety of incentives.

Moreover, we must contribute to the formation of a business ecosystem of coexistence to have conglomerates purchase more products from SMEs, and nurture competent SMEs which will herald our technological independence.

Through these measures, we will be able to provide stability and predictability to local businesses when it comes to new investments for key materials and parts.

The Korean government is aware that the Korean people have serious concerns about the effects of Japan’s economic retaliation. The Korean government will work closely with conglomerates, SMEs, and the Korean people to use this crisis as an opportunity to bring an end to the so-called “Cormorant Economy.”

Korea already has the experience of overcoming Japan’s absolute advantage in the manufacturing sector through President Park Chung-hee’s ‘Policy Declaration on Promoting Heavy and Chemical Industries.’ We also have the experience of laying the foundation for component industries to thrive through President Kim Dae-jung’s strategy of nurturing part and component industries. The Korean government will use this difficulty that it faces as an opportunity for Korea to become a world leader in parts, materials, and equipment.

Historically, Northeast Asia has always been caught in a vortex. The series of missile launches by North Korea and the neighboring countries’ foreign policies placing their own interest first are only some of the challenges we face. Nonetheless, looking back to our modern and contemporary history, we can’t help but wonder if there had been a single moment when we could be at ease.

As a nation that has overcome many trials throughout modern history, including the Imo Incident, the Gapsin coup, the 1st Sino-Japanese War, the royal refuge to the Russian Legation (Agwan Pacheon), the Katsura-Taft Secret Agreement, the Korea-Japan Treaty of 1905, and the ensuing forced colonization of Korea, we have proudly risen as the first nation to have both realized to become the 12th largest economy in the world and also home to a vibrant democracy.

This is why we will be able to triumph over the crisis now at hand. To accelerate the development we have accomplished so far, we must first pursue technological development through the establishment of a business ecosystem centered on coexistence.

Now, the world is in a phase where multilateralism gives way to a self-oriented international order. In line with this trend, we must also build up our own economic and security capabilities to defend ourselves.

The Korean government regarded Japan as a key partner for the Korean Peninsula Peace Process and supported its endeavors by addressing the issue of Japanese abductees in North Korea and normalization of North Korea-Japan ties on multiple occasions such as the inter-Korean summits.

However, instead of playing a supportive role in the process of establishing peace on the Korean Peninsula, Japan created impediments. Japan opposed the suspension of ROK-U.S. combined exercises during the Pyeongchang Winter Olympics; continued to call for sanctions and pressure even as talks with North Korea were in progress; and caused tension by requesting an exercise to evacuate Japanese citizens in Korea. Also, Japan created an environment which disrupted Korea-Japan cooperation, as demonstrated by the incidents involving JMSDF patrol aircraft.

We must for once cautiously reconsider what kind of a peaceful and prosperous normal state Japan really is aiming to become.

I can’t help but to point out that despite the Korean government’s continuous proposal to hold consultations in order to resolve the Korea-Japan conflict including the issue of forced labor, Japan consistently either refused or distorted the facts in face of Korea’s efforts.

The Korean government’s efforts to hold consultations in order to find ways to resolve the export restrictions imposed by Japan, which the basis is unclear, started with the proposal by the United States to have a high-level ROK-Japan-US trilateral meeting in Japan last month. The Korean government agreed to this proposal, but because of Japan’s refusal, the meeting was not able to take place.

The Japanese government also turned down the Korean government’s proposal (July 12) to have the appropriate international organizations conduct an impartial investigation on the export control system of both Korea and Japan. The Japanese government altogether did not respond positively to the Korean government’s proposal (July 16) to have a Director-General meeting between Korea’s Ministry of Trade, Industry and Energy (MOTIE) and Japan’s Ministry of Economy, Trade and Industry (METI), and its proposal (July 24) to have a 1-on-1 dialogue between the representatives of Korea and Japan at the WTO General Council, followed by its proposal (July 27) to have a ministerial meeting at the RCEP ministerial conference. 

A hard-won meeting between the foreign ministers of Korea and Japan was held in Bangkok yesterday. However, it ended with no breakthroughs since the Japanese side merely repeated its previous stance.

Many have leveled criticism at the Korean government, asking why we haven’t been more proactive in sending a special envoy to Japan. As a matter of fact, the dispatch of a high-level official from the Korean government took place twice in July. At the request of the Korean side, a high-ranking official visited Japan and met with his Japanese counterpart.

At the time, the Korean high-level official explained in detail why as many as eight months were needed to come up with our proposal on the issue of forced labor. We also made our position clear that we were open to discussing all issues, including the demanded proposal by the Japanese side.

The United States also recently joined in the efforts to resolve the Korea-Japan conflict. A so-called ‘standstill agreement,’ in which both sides temporarily halt all additional measures that may escalate the situation and instead put their efforts in seeking a diplomatic agreement, was also proposed. The Korean government looked into the proposal positively and tried to consult with the Japanese government.

The Korean government once again proposed to hold a bilateral consultation at an early date in order to explain each other’s export control system and for information sharing. The Korean government also explained that it was not our intention with regards to the Japanese government’s reasoning that the bilateral export control consultative meeting had not taken place for the last 3 years. However, regrettably Japan immediately refused our proposal. And Japan also immediately refused the standstill agreement proposal as well.

Despite our unceasing efforts to resolve the issue diplomatically, Japan finally took measures to remove Korea from its so-called White List today after making a continuous series of excuses such as bilateral relations of trust being damaged, unauthorized shipments of strategic materials and poorly managed export controls. Removing Korea, which has shared the values of liberal democracy and market economy for several decades, from the White List by raising security related reasons as a pretext is tantamount to a public affront.

Winston Churchill once said, “Nations that went down fighting rose again, but those who surrendered tamely were finished.”

The Korean government will take comprehensive countermeasures, including reviewing whether it is indeed appropriate to continue to maintain the sharing of sensitive military intelligence with a country that raises questions towards us about lack of trust and security issues. 

Our history proves that we have the ability to wisely overcome crises whenever we encounter them. Moreover, this ability has been possible thanks to the support and unity of our people more than anything else. Although we are in difficult times, we can certainly overcome it and we will do it without failure.