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Japan 'bemused' over South Korea trade controls, minister says

TOKYO-Japan is "in the dark" as to why South Korea has downgraded Tokyo's trading status, its trade minister said on Tuesday, amid an intensifying trade war between the two neighbors and US allies in Northeast Asia.

South Korea on Monday created a new category of trading status for Japan, with its Trade Minister Sung Yun-mo saying it was "hard to work closely with a country that frequently violates the basic rules".

South Korea's list of trade partners has been divided into two groups: members of the world's top four export control agreements and those who are not.

But Seoul said on Monday it had created a new category for countries that had signed the four pacts "but operate an export control system that violates international norms".

Japan is the only country in the new category.

The move left officials in Tokyo bemused. "After watching the South Korean news conference, we remain completely in the dark as to the grounds on which it claims that Japan's export control system fails to comply with (international) principles," tweeted Japanese Trade Minister Hiroshige Seko on Tuesday.

Monday's move is the latest in a series of tit-for-tat measures between the two neighbors.

On July 4, Japan tightened its rules on awarding official export permits for South Korea, meaning that screening applications could take up to 90 days.

Tokyo has also announced it will remove Seoul from a list of favored export partners from Aug 28.

South Korea quickly fired back, rescinding Japan's favored export partner status and saying it would also review a military information agreement.

The dispute has raised concerns over potential implications for their security cooperation and the possible impact on global supply chains.

Despite mutual criticism over policies linked to wartime history, both Japan and South Korea insist these measures have been introduced on national security grounds.

Seoul is the fifth-largest importer of Japanese goods, while petroleum products, iron and steel products, and electrical machinery including semiconductors are the major South Korean exports to Japan, according to finance ministry trade data.

"Although the delisting does not come as a surprise, it nevertheless illustrates that the bilateral tensions between Japan and South Korea show no sign of abating," said Tobias Harris, an expert at Teneo consultants, in a note on Tuesday.

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