South Korean leader says Japan dishonest over wartime past

South Korean President Moon Jae-in on Thursday berated Japan for carrying out its plan to downgrade South Korea's trade status and reiterated Seoul's stance that Tokyo was weaponizing trade to retaliate over political rows stemming from the countries' wartime history.

Moon said in a Cabinet meeting that Japan is being dishonest by insisting that its trade curbs weren't retaliation over historical issues, including South Korean court rulings that called for Japanese companies to offer reparations to aging South Korean plaintiffs for forced labor during World War II.

He said Japan should look "squarely at the past" and that its current actions were aggravating the pain and anger of South Koreans who suffered under Japan's brutal colonial rule of Korea from 1910 to 1945.

"Japan has yet to even state an honest reason for its economic retaliation .... No matter what excuse it provides as justification, it is clear that the Japanese government has linked historical issues to economic matters," Moon said.

Later Thursday, the countries' diplomats are expected to hold working-level meetings in Seoul to discuss the trade row and security issues related to North Korea.

Tokyo's recent moves to tighten controls on exports to South Korea, where major manufacturers like Samsung heavily rely on materials and parts imported from Japan, have touched off a full-blown diplomatic dispute.

Seoul plans to similarly downgrade Japan's trade status and terminate a military intelligence-sharing pact with Japan that symbolized the countries' three-way security cooperation in face of the North Korean nuclear threat and China's growing influence.

Following an angry reaction from Washington, Seoul said this week it could reconsider its decision to end the military agreement if Japan relists South Korea as a favoured trade partner.

Moon said South Korea will employ a variety of measures to minimize the impact of the Japanese trade curbs on its trade-dependent economy.

"We will take this as an opportunity to elevate our economy to a new level by strengthening competitiveness of the manufacturing sector and other industries," Moon said.

"As a sovereign state, we will also resolutely take steps to respond to Japan's unwarranted economic retaliation." Japan's downgrading of South Korea's trade status, which took effect Wednesday, followed a July move to strengthen controls on exports of chemicals South Korean companies use to produce computer chips and displays for smartphones and TVs, which are among South Korea's key export items.

South Korea's removal from Tokyo's trade "whitelist" means that Japanese companies would need to apply for approval for each technology-related contract for South Korean export, rather than the simpler checks granted a preferential trade partner, which is still the status of the U.S. and others.