Japan drops SKorea from 'white list' trusted trading partners

The decision to remove South Korea from its white list of trusted trading partners would mean that Japanese exports to South Korea now require additional screening to make sure they are not used for making weapons and military applications.

Tokyo:Japan on Friday dropped South Korea as its preferred trading partner amid escalating trade tensions between the two neighbouring countries.

According to the media report, the decision to remove South Korea from its white list of trusted trading partners would mean that Japanese exports to South Korea now require additional screening to make sure they are not used for making weapons and military applications. The new restriction will go into effect from August 28.

Meanwhile, South Korea has also indicated that it will also remove Japan from its white list. South Korea is Japan's largest trading partner. It buys USD 54 million of Japanese goods every year.

For months tensions were simmering between the two nations but it surfaced only recently after Tokyo placed the control on the export of three chemical materials to South Korea.

The materials fluorinated polyamides, photoresists and hydrogen fluoride are used to make computer chips, among other things.

Tokyo's action comes after Seoul top court ruled that its citizens can sue Japanese companies for using forced Korean labour during World War II. However, Japan has denied that the two issues are linked.