Seoul drops Tokyo from list of trusted trade partners

South Korea officially removed Japan from its list of trusted trade partners on Wednesday, upping the stakes in the two countries’ high-profile trade row, which largely stems from their shared history.

Under the new classification scheme, Seoul’s trade ministry regroups its trading partners into three from the previous two, placing Tokyo in the in-between group.

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, according to the ministry.

Korean exporters also need to go through tougher and longer procedures to win comprehensive approval to ship goods to Japan for a two-year expiry, shorter than the three-year period granted for trusted countries, it said.

Seoul claimed that all trusted partners “operating an export control system that violates international norms” and “having difficulties in seeking an international cooperation” will no longer be given favors, although Japan will be the only country in the in-between bracket.

The removal came a month after Seoul warned of such actions in response to Japan’s restrictions on exports of three key industrial materials to South Korea, which started in July.

Late last month, Japan also removed South Korea from its own list of trade partners, raising allegations over South Korea’s export control system, including the chance of Japanese goods being be diverted for military purposes by third-party countries, although it did not concrete evidence.

In a separate action, South Korea filed a complaint with the World Trade Organization (WTO) last week over Japan’s curbs of exporting key industrial materials to Seoul. The complaint, however, does not cover Japan’s removal of South Korea from trusted trading partners.

Tokyo’s move is widely seen as retaliation for a verdict made by a Seoul court last year that ordered Japanese firms to compensate Korean victims for their wartime forced labor during its 1910-45 colonial rule.

Japan has been protesting the court’s verdict, claiming that all reparation issues stemming from its colonial rule of Korea were settled under a 1965 accord that normalized bilateral ties.