South Korea's path to industrialization is broadly similar to Japan's: start off with easy-to-make stuff like textiles, eventually move to steel and petrochemicals, which in turn are critical for the production of automobiles and consumer electronics, etc. It is remarkable that in 2009, when many commentators like the Asian Development Bank have called the export-led growth models used by such countries as not being what they were, these two are still keen on them. Yes, exports are good--and so are mercantilist policies--as long as you apply them and not your trade partner. In the current row, the arena of contestation is in lithium ion batteries. These kinds of batteries have largely replaced nickel cadmium or Ni-Cd batteries in advanced consumer electronics applications such as MP3 players and portable computers. Among Li-ion batteries' stated advantages are slower discharge (when not in use), longer battery life (when in use), and freedom from the dreaded "memory effect" that prevents them from charging to 100% of capacity.South Korea is set to introduce policies that it says are in the consumer interest--a time-tested protectionist staple. Korea's version of events is that exploding Li-ion batteries have become a concern as these energy storage devices have become more popular. In response, Korean firms have designed batteries that are not as prone to electro-Chernobyl. Given this development, Korean authorities have introduced what Japan believes are draconian safety rules that limit its ability to export batteries to South Korea. Are these genuine safety concerns, or merely Korea trying to gain some breathing room in the domestic market for its new technology? Whoever said export-led strategies were dead? From Agence-France Presse:
Japan is set to complain to the WTO this week over a South Korean plan to tighten safety regulations on lithium-ion batteries, accusing Seoul of protectionism, a report has said. "We will voice our concern at a committee meeting on technical barriers to trade" at the World Trade Organization this week, Economy, Trade and Industry Minister Toshihiro Nikai was quoted as saying by Jiji Press news agency. The committee meets Thursday and Friday in Geneva.It's not quite a financial disclosure, but the PC I'm writing this post on is a Samsung laptop running on Li-ion batteries--both of which are proudly made in South Korea!
South Korea is reportedly planning to introduce new rules from July 1 on the production and sale of products using lithium-ion batteries, requiring certificates from designated South Korean inspectors. Foreign manufacturers fear the new process, which comes after some of the batteries have overheated or exploded in recent years, could significantly delay the launch of their products in South Korea.
The certification system could hamper Japanese companies who hold a 60 percent share in the global market of lithium-ion batteries, which are used in electronics including cellphones, digital cameras and laptops. "The criteria for obtaining certification aren't particularly clear," a Japanese government official was quoted as saying by the Yomiuri Shimbun daily. "We're worried that Japanese products are basically being kicked out of the South Korean market."
