In a tit-for-tat move, South Korea on Wednesday dropped Japan from its preferential trade arrangement list, local media reported.
Previously, Japan had removed South Korea from the same list, alleging Japanese dual use goods could be diverted for military purposes.
Local companies shipping strategic goods to Japan will now have to submit five documents to win individual approval, which is more than the previous three. The approval process will also take around 15 days, longer than the previous five, South Korean Trade Ministry said, according to Yonhap news agency.
The two countries, close allies of the U.S. 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 Korean court order has severely damaged the mutual trust.
South Korea is among 27 countries in the preferential trade list of Japan which had accorded preferential trade status to Seoul in 2004.
According to Tokyo-based Mainichi daily, Japan has regretted the move.
“It’s extremely regrettable that the review was made,” the daily quoted Chief Cabinet Secretary Yoshihide Suga as saying at a news conference. “We will continue to urge South Korean authorities to fulfill their accountability to the international community.”
After removing Japan from preferred trade list, Seoul’s Trade Ministry has regrouped its trading partners into three from the previous two categories placing Tokyo in the in-between group.
Seoul has also filed a complaint with the World Trade Organization (WTO) against Japan’s curbs on key electronic exports to South Korea.
Meanwhile, media reports have painted a grim picture of Japan’s exports.
According to Daily Japan Times, there was a constant dip in country’s exports for ninth month in a row.
“The decline [in August] was slightly smaller than expected,” the daily said, linking the decrease with international trade tensions.
Also, Japanese government data published by Kyodo news on Wednesday said the number of South Korean visitors to Japan has reduced to nearly half in August from a year earlier amid ongoing tensions between the two countries.
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