Japan's trade ministry announced on Friday that it has started the process of restoring South Korea's preferential trade status, days after Seoul requested reciprocity and more than three years after the nations demoted one another as a result of a contentious historical disagreement.

Japan’s Ministry of Economy, Trade and Industry said talks with South Korea this month showed that its controls over trade in sensitive materials with both civilian and military uses are now as effective as those used by Japan.

Accordingly, it said it has proposed that South Korea be reinstated to the list of nations that enjoy preferential Japanese trading status, subject to a 30-day public comment period that ends on May 31.

The step would end a trade dispute that began in July 2019 when Japan removed South Korea from its “white list” of countries given fast-track approvals in trade, in apparent retaliation for South Korean court rulings in 2018 that ordered Japanese companies to compensate Korean workers for abusive treatment and forced labour during World War II when the Korean Peninsula was a Japanese colony.

South Korea filed a protest with the World Trade Organisation and removed Japan from its own list of nations with favored trade status after Japan increased export curbs on important chemicals needed by South Korean industries to produce semiconductors and screens.

Seoul and Tokyo have been working to repair their relations as they deepen three-way security cooperation with Washington in response to growing regional threats from North Korea and China.

Since South Korean President Yoon Suk Yeol's administration announced plans to use South Korean funds to compensate the forced labourers without requiring contributions from Japan in March, their relations have gotten better quickly.

Yoon also traveled to Tokyo for talks with Prime Minister Fumio Kishida and agreed to rebuild the countries’ security and economic ties.

Following their discussions, South Korea withdrew its WTO complaint, and Japan simultaneously announced that it had removed the export restrictions on chemicals that were deemed essential to South Korea's technology sector.

Image source: AP