Japan is divided into four major export categories. South Korea has been reduced from Group A to Group B.

Japan announced yesterday that it would exclude South Korea from the "white list" of countries that are eligible for trade preferences, triggering a strong backlash from South Korea. Japanese media reported today that the Japanese government has divided exporting countries into four categories, and South Korea has been downgraded from Group A to Group B, which has a lower level of trust.

Japan decided yesterday to exclude South Korea from the "white list" of countries that are eligible for trade preferences. This is the first time that Japan has removed a country from the "white list". In addition to the previous wave of strengthening export controls on semiconductor raw materials, it is likely that the majority of items will be strictly controlled from the 28th onwards.

The Japanese government's move has aroused the outside world's curiosity about how Japan manages exports. According to the Yomiuri Shimbun, Japan divides exporting countries into four categories, from high to low trust, namely Group A, Group B, Group C and Group D.

Group A, which has the highest level of trust, is also known as the "white countries" (white list countries). It is subject to the most preferential trade measures. Its members include 27 countries including the United States and the United Kingdom. South Korea was originally the only one in Asia, but from the 28th of this month, South Korea was excluded from the white countries and will be moved to Group B. Japan's white list countries are now reduced to 26 countries.

Members of different groups enjoy different trade incentives granted by Japan. In principle, Japanese companies can enjoy three years without having to apply for individual licenses when exporting controlled items to Group A countries.

When Japanese companies export controlled items to Group B countries, they can enjoy the benefit of not having to apply for individual licenses for certain items. However, there are still restrictions such as internal inspections at the exporting companies, and the procedures are more complicated than exporting to Group A countries.

Most countries or regions, including Taiwan and Singapore, are listed in Group C. Japanese companies need to obtain individual licenses to export controlled items. Ten countries, including North Korea and Iraq, are listed in Group D. All controlled items must obtain individual licenses when exported.

Japanese companies will not be able to enjoy the current trade preferential measures if they export products to South Korea after the 28th. However, the items subject to the preferential measures of Group A and Group B are not very different. The measures introduced by Japan this time do not immediately require all exports from Japanese companies to apply individually.

However, compared to non-controlled items that can be exempted from relevant procedures when exported to Group A countries, most items such as screws and steel that are not controlled items when exported to Group B countries require individual licenses as long as the Ministry of Economy, Trade and Industry of Japan believes that they may be used for military purposes; if the Ministry of Economy, Trade and Industry's review finds that there is a problem, the target items will not be exported.