Japan will relist South Korea as a preferred trade partner on July 21 after a similar move by Seoul on Tokyo's trade status, the Japanese government said Tuesday in the latest sign of a thaw in bilateral relations.
The actions mark the normalization of trade between the two countries after their ties worsened to their lowest point in decades over wartime history. They are also close to an agreement to resume a bilateral currency swap agreement, officials said.
The 2019 removal of South Korea from a "white list" of countries entitled to receive minimum restrictions on trade came after South Korea's Supreme Court in the previous year ordered two Japanese firms to compensate Korean plaintiffs over forced labor accusations connected to Japan's 1910-1945 colonial rule of the Korean Peninsula.
Though widely seen as a retaliatory step, Japan at the time said it had concerns over Seoul's export system and needed to confirm whether it was effective in preventing exported goods from flowing into North Korea and other countries of concern. The measure affected a wide variety of products and technologies that could be diverted for military use.
Seoul later removed Japan from its own white list.
On Tuesday, the Cabinet gave approval following the completion of procedures to collect public opinion on lifting the measure, according to the Ministry of Economy, Trade and Industry.
Economy, Trade and Industry Minister Yasutoshi Nishimura told a press conference that the two countries have also agreed to establish a follow-up scheme, including reviewing the export control systems of both countries if necessary.
South Korea's Trade, Industry and Energy Ministry on Tuesday also welcomed the mutual lifting of export controls, saying it had "completely restored bilateral trust."
The finance authorities of the two countries will meet Thursday in Tokyo to discuss issues surrounding their economies, including steps to counter future financial crises, the officials said.
The currency swap agreement, aimed at ensuring they have access to sufficient dollar funds to withstand financial market instability, expired in 2012 amid a territorial dispute.
In March, Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol held a summit where they vowed to mend ties.
The same month, Japan eased export controls on three key semiconductor manufacturing materials heading to South Korea, in response to Seoul retracting its complaint with the World Trade Organization over the export controls.
The next month, South Korea put Japan back on its list of countries entitled to preferential treatment after its removal more than three years earlier, allowing strategic items to head to Japan with a shorter review period.
The two countries also resumed in April their policy dialogue.
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