Japan will lift restrictions on the export of three semiconductor components to Korea for the first time in 44 months.
In return, Seoul will withdraw its complaint filed against Tokyo with the World Trade Organization (WTO).
The Ministry of Trade, Industry and Energy on March 16 said Japan will scrap its restrictions on the export of fluorine polyimide, hydrogen fluoride and photoresist to Korea.
The ministry on March 6 announced its policy toward bilateral consultations to restore trade conditions between both nations. From March 14-16, the ninth dialogue between export management directors-general was held between the ministry and Japan's Ministry of Economy, Trade and Industry.
Seoul said the talks saw close exchanges of opinions on the effectiveness of export management like the export control systems of both countries, operation of relevant systems and follow-up management.
The two sides decided to closely discuss measures to swiftly put Korea back on Japan's white list of countries receiving preferential treatment in applications for permits or procedures for export of cutting-edge technology and electronic components.
In July 2019, Japan objected to the Supreme Court of Korea's ruling on compensation for Koreans forced to work by Japan during the latter's occupation of the Korean Peninsula. In retaliation, Tokyo imposed restrictions on the export of three components to its neighboring country.
The three are crucial for Korea's semiconductor and display industries.
As of 2019, Japan produced 90% of the world's fluorine polyimide and photoresist and 70% of hydrogen fluoride, thus the restrictions raised alarm in Korea's semiconductor sector at the time.
In August 2019, Japan removed Korea from its white list and Seoul filed a complaint with the WTO the following month.
Earlier in October and November 2018, the Supreme Court of Korea ruled that the Japanese companies Nippon Steel and Mitsubishi Heavy Industries must pay compensation to Koreans forced to work for Japan during the latter's colonial rule of the peninsula.
The ruling said the 1965 Korea-Japan Claims Settlement Agreement, a bilateral government-level accord, did not exclude an individual's right to file a claim.