Pompeo meets Japanese, South Korean FM’s

Keiichi Ishii, Shinzo Abe and Taro Aso

TOKYO (AP) — The Latest on Japan downgrading South Korea’s trade status (all times local):

7:10 p.m.

U.S. Secretary of State Mike Pompeo is meeting with his Japanese and South Korean counterparts in a bid to try to defuse a brewing crisis between the two key U.S. allies.

Pompeo, Japan’s Foreign Minister Taro Kono and South Korea’s Foreign Minister Kang Kyung-wha were holding three-way discussions Friday on the sidelines of an Asian security forum in Bangkok. The meeting came as Japanese-South Korean relations nosedived after Japan downgraded South Korea’s trade status. South Korea responded in kind and has threatened further retaliation including possibly ending a military intelligence sharing agreement.

Pompeo says he’s keen to try to help the two countries overcome the crisis, noting they are key U.S. partners in the region and play a significant role in the Trump administration’s efforts to get North Korea to denuclearize.

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6:40 p.m.

South Korea’s Foreign Ministry has summoned the Japanese ambassador to protest Tokyo’s decision to downgrade the trade status of the country.

South Korea’s Yonhap news agency said Friday South Korean Vice Foreign Minister Cho Sei-young told Amb. Yasumasa Nagamine that Japan’s trade measures betray a history of bilateral cooperation and that South Koreans may no longer consider Japan a friendly nation because it imposed what Seoul sees as an economic retaliation.

The ministry couldn’t immediately confirm the comments.

The ministry earlier released a statement calling for Japan to “immediately withdraw” the decision to exclude South Korea from a list of nations receiving preferential treatment in trade.

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6:15 p.m.

A South Korean presidential official says Seoul will consider ending a military intelligence-sharing pact with Tokyo as part of countermeasures against Japan’s decision to downgrade the trade status of its neighbor.

Kim Hyun-chong, deputy director of South Korea’s presidential National Security Office, said Friday his government will review whether it could continue sharing sensitive military information with Japan when it continues to claim bilateral trust has deteriorated while justifying its trade curbs.

Kim says Japan has “insulted” South Korea by questioning Seoul’s credibility in controlling the exports of arms and items that can be used both for civilian and military purposes without citing any specific evidence of problems.

Kim says Seoul had been committed to resolving the trade row diplomatically, but Japan ignored its efforts and also rejected U.S. efforts to mediate.

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5:05 p.m.

South Korea’s finance minister says his country will take steps to remove Japan from its own “whitelist” of nations receiving preferential trade treatment to retaliate against Tokyo’s decision to downgrade Seoul’s trade status.

Hong Nam-ki also on Friday said South Korea will speed up efforts to file a complaint with the World Trade Organization over Japan’s strengthened export controls.

South Korean officials didn’t immediately offer a specific explanation on how Japan’s removal from Seoul’s 29-country list would impact trade, but said more details will be provided in a news conference next week.

Hong says Japan’s strengthened export controls could affect nearly 1,200 items deemed as sensitive. He says Seoul will closely manage and assist the imports of 159 items where South Korean companies are most reliant on Japanese makers.

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2:30 p.m.

Chinese Foreign Minister Wang Yi has urged Japan and South Korea to show goodwill and resolve their trade spat through negotiations and dialogue.

He spoke on the sidelines of an annual meeting in Southeast Asia.

Japan’s Cabinet on Friday approved the removal of South Korea from a “whitelist” of countries with preferential trade status. It takes effect on Aug. 28.

Wang told reporters that neighboring countries should deal with one another “with sincerity and goodwill.” He said the Japan-South Korea trade row was discussed at the annual meeting and that the discussion was positive.

He said he expressed China’s hope that the two countries can “show goodwill in a forward-looking manner, in an objective and fair manner, so as to properly handle the existing differences.”

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2:20 p.m.

South Korea’s president has vowed stern countermeasures against Japan’s decision to downgrade its trade status, which he described as a deliberate attempt to contain South Korea’s economic growth and a “selfish” act that would damage global supply chains.

President Moon Jae-in made the comments on Friday ahead of an emergency Cabinet meeting to discuss the Japanese measures, which South Korea says could hurt its export-dependent economy.

Moon says Japan’s decision was retaliation against South Korean court rulings that called for Japanese companies to compensate South Korean plaintiffs for their forced labor during World War II.

Moon says South Korea is ready to impose unspecified countermeasures that could be strengthened by each step and that Japan should brace for “huge damage” if it deliberately targets South Korea’s economy.

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1:40 p.m.

Japan’s Trade Ministry has revamped the system it uses for countries with preferential trade status, after it removed South Korea from the list.

The ministry said in a statement Friday the change is part of a decision to strip South Korea of its “whitelist” status for countries with simplified export licensing.

The ministry says South Korea, beginning Aug. 28, will be in Group B of countries with certain levels of export controls.

South Korea has balked at Japan’s decision that requires case-by-case licensing for three high-tech materials used in semiconductors and smartphones — South Korea’s key exports.

Japan promised to grant licenses for items “verified as legitimate,” but reminded South Korea it will take “strict measures against circumventions, non-claimed usage and other illicit exports” on all items.

Group D includes countries such as North Korea an Iran.

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11:55 a.m.

South Korea Foreign Minister Kang Kyung-wha has slammed Tokyo’s “unilateral and arbitrary” decision to remove South Korea from a “whitelist” of countries with preferential trade status, but her Japanese counterpart Taro Kono says the move was legitimate.

The two ministers traded barbs Friday at an annual meeting of the 10-member Association of Southeast Asian Nations in Bangkok.

Kang said South Korea is “gravely concerned” by Japan’s move that is challenging the region’s goal of expanding free flow of trade and commerce.

Kono said maintaining effective export control over sensitive goods and technology from a security perspective was Japan’s right and that it complied with free trade rules. He also said South Korea would still enjoy preferred status on par with ASEAN nations.

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11:45 a.m.

Japanese trade minister Hiroshige Seko says Japan’s decision to remove South Korea’s preferential trade status only means the country gets a standard treatment and should not affect bilateral relations.

Japan’s Cabinet on Friday decided to remove South Korea’s “white country” status as of Aug. 28, expanding controls over exports of sensitive materials potentially used for weapons.

It adds to an earlier requirement for Japanese exporters to get individual licensing on three high-tech materials, which has triggered angry protests and boycotts from South Korea.

Seko said Friday’s decision was necessary for Japan to maintain appropriate export controls for national security, and was not meant to retaliate over the dispute involving Korean wartime labor issue.

Seko urged South Korea to first improve its export controls to mitigate Japan’s doubts and regain trust.

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11:30 a.m.

South Korea’s presidential office has expressed “deep regret” and vowed a stern response over Japan’s decision to take the country off its list of nations with preferred trade status.

In a statement read on national TV, Blue House spokeswoman Ko Min-jung said Seoul had committed to resolving its trade row with Tokyo diplomatically and will now sternly respond to the Japanese measures it sees as “unjust.”

Ko says President Moon Jae-in will address the issue ahead of a Cabinet meeting later on Friday and the country’s finance minister will also announce government plans in response to the expanded Japanese export controls.

South Korea says the Japanese trade curbs could hurt its export-dependent economy and has accused Japan of weaponizing trade to retaliate over bilateral disputes stemming from wartime history.

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10:30 a.m.

Japan has approved the removal of South Korea from a “whitelist” of countries with preferential trade status, escalating tensions between the neighbors.

Friday’s Cabinet decision expanding controls over exports of sensitive materials takes effect on Aug. 28.

It follows an earlier requirement that Japanese companies’ exports to South Korea be approved on a case-by-case basis for three materials used in semiconductors, smartphones and other high-tech devices.

The decision will fuel antagonism between the two neighbors already at a boiling point over the export controls and the issue of compensation for wartime Korean laborers.

It will ripple across the high-tech sector, further affecting supply chains already rattled by U.S.-China trade tensions.