SOUTH KOREA said yesterday that it has decided to remove Japan from a list of nations receiving preferential treatment in trade in what was seen as a tit-for-tat move following Tokyo’s recent decision to downgrade Seoul’s trade status amid a diplomatic row.

It wasn’t immediately clear how South Korea’s tightened export controls would impact bilateral trade. Seoul said South Korean companies exporting to Japan will be able to receive exceptions from case-by-case inspections that are normally applied on sensitive shipments to nations with lower trade status and go through the same fast-track approval process that they currently enjoy.

Japan provided similar exceptions while removing South Korea as a favored trade partner, which eased some of the fears in Seoul about a possible blow to its export-dependent economy, where many manufacturers heavily rely on parts and materials imported from Japan.

After spending weeks berating Tokyo for allegedly weaponizing trade and vowing countermeasures, South Korean President Moon Jae-in struck a more conciliatory tone yesterday, saying that his government will refrain from “emotional” reactions to Japan over the trade dispute.

South Korea’s trade minister, Sung Yun-mo, said Seoul decided to remove Japan from a 29-member “white list” of countries that enjoy minimum restrictions in trade because it has failed to uphold international principles while managing its export controls on sensitive materials.

South Korea currently divides its trade partners into two groups while managing the exports of sensitive materials that can be used both for civilian and military purposes. Seoul will create a new in-between bracket where it plans to place only Japan, which “in principle” will receive the same treatment as the non-favored nations in what’s now the second group, Sung said.

South Korea’s government currently requires companies to go through case-by-case approvals to export sensitive items to non-favored nations, which typically take 15 days. However, Seoul also plans to grant exceptions to South Korean companies exporting to Japanese partners under long-term deals and allow them to continue using a fast-track approval process that takes about five days.

Sung and other South Korean officials did not specify what they saw as Tokyo’s problems in export controls or why they created a special bracket for Japan instead of grouping it with other non-favored nations. They say that Seoul will work to minimize negative impact on South Korean exporters and bilateral trade.

Sung said the changes are expected to enter effect sometime in September, following a 20-day period for gathering public opinion on the issue and further regulatory and legal reviews. (SD-Agencies)