Japan set to remove S.Korea from favoured trade list

A shop sign in Seoul informs customers that it will not sell products from Japan, as a trade dispute between the US allies worsens. (AFP photo)

ANKARA: Japan is mulling to remove South Korea from its preferential trade arrangement list, signalling a widening of the rift between the two countries, Anadolu Agency reported, quoting Japanese media report on Friday.

The move is part of an ongoing trade war between the two neighbours in the Pacific region after Tokyo slowed down supply of three vital electronic items to Seoul in early July.

“Japan will decide on Aug 2 to remove South Korea from its list of countries allowed to trade under a preferential arrangement, to buy dual-use products that could be diverted for military use,” Japanese Kyodo news reported.

“We believe it is an appropriate step to enforce effective export controls to remove (South Korea) from the white list,” Japanese Chief Cabinet Secretary Yoshihide Suga told reporters.

But, he added that nothing has been decided yet.

The plan, if approved, will be operationalised by late August. Japan had accorded preferential trade status to South Korea in 2004.

South Korean Foreign Minister Kang Kyung Wha has asked her Japanese counterpart to reconsider the proposed plan.

“The action will worsen the current situation,” she said. The minister also asked Tokyo to repeal the July 4 order that restricts exports to South Korea.

Both countries, close allies of the US in the region, are witnessing freezing relations, after a Korean court last October directed Japanese companies to pay compensation to wartime victims. But Tokyo refused to oblige.

Japan, which had occupied Korean peninsula from 1910 to 1945, is accused of large scale rights violations.

Tokyo has said that the Korean court order has severely damaged the mutual trust.

South Korea is among 27 countries in the preferential trade list of Japan. The decision will impact the supply of dual-use items that have commercial and military usage. Trading such items to a non-preferential country requires prior approval from the trade ministry, thus slowing down the export process.