This morning the Japanese government revoked the preferential status of trade partner of South Korea. Citing security reasons, Tokyo declared that it wants to block the purchase of products that could be diverted for military use. The move is destined to intensify tensions between the two countries, triggered by a dispute over compensation to victims of forced labor in wartime.

South Korea is the first country to be removed from the so-called “white list” of 27 nations, to which Japan recognizes minimal restrictions on exports of products that can be used in the arms industry. This means that hundreds of products listed as “sensitive” will be subject to more stringent controls. Hiroshige Seko, Japanese Minister of Commerce, declared this morning that the provision will come into force on August 28th.

The elimination from the list risks damaging the technological industry of Seoul, a world leader in the sector. This is already under pressure for Tokyo’s previous decision to request individual export licenses for South Korea to produce semiconductors and displays for smartphones and TVs from July 4th. The South Korean government urges Japan not to proceed with the lifting of the preferential status: more than 1,000 products in key sectors, including the automotive and petrochemical industries, would be affected. Government spokesman Ko Ming-jung states: “Our administration will severely respond to Japan’s unjust decision.”

The two countries share a complicated history that includes the Japanese colonial rule of Korea from 1910 until the defeat of Japan in the Second World War (1945). Relations between Seoul and Tokyo have deteriorated considerably since last year, when the South Korean Supreme Court ordered some Japanese companies to compensate the Korean victims of forced labor during the occupation of the peninsula. Tokyo considers the issue already regulated by a bilateral agreement of 1965.

Mitsubishi Heavy, one of the companies involved, has refused to comply with the court order, while two other companies had their assets in South Korea seized. Seoul has criticized Japan’s closer control over exports of materials such as retaliation for the sentence. Tokyo insisted that the measure is designed to address security concerns, saying that there were “improper incidents” in exports to South Korea. However, the Abe government has not provided any further explanation.

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