South Korea warned Japan on Thursday that it would be forced to review security cooperation between the two key US allies if Tokyo pushes ahead with plans to remove Seoul from its "white list" of trusted trade partners.
The squabble between the East Asian neighbours follows a decades-long quarrel over Japanese forced labour during World War II.
Japan last month unveiled tough restrictions on exports of chemicals vital to Seoul's world-leading chip and smartphone industry.
Tokyo has also said it will remove South Korea from its preferential trade status as early as Friday, a move that could affect hundreds of key items imported to the South and punch a hole in its economy.
Seoul's foreign minister Kang Kyung-wha met her Japanese counterpart Taro Kono on Thursday on the sidelines of a regional foreign ministers' meeting in Bangkok and urged Tokyo to walk back the move.
"I made clear the grave consequences it would have on our bilateral relations if the measure was imposed," she told reporters.
Kang warned the renewal of a military intelligence-sharing agreement between the countries could be jeopardised by any "white list" removal.
"I said that the security cooperation framework between South Korea and Japan may be affected," she added.
Japan's chief cabinet secretary Yoshihide Suga said on Wednesday that his side intended to press ahead with the move.
"This policy remains unchanged and we will calmly proceed with the formalities," he told reporters.
Seoul and Tokyo are Washington's key security allies in the region and critical in any future deal on the denuclearisation of the Korean peninsula.
US Secretary of State Mike Pompeo, who is also in Bangkok attending the summit of Southeast Asian foreign ministers, has pledged to mediate between the two countries when he meets their diplomats on Friday.
"We will encourage them to find a path forward," he said ahead of his trip.
Pompeo is trailing his country's rebooted Asia security strategy in Bangkok.
The deteriorating relationship between two key allies is a symbol of Asia's increasingly complex diplomatic landscape.
On Thursday he met his Chinese counterpart with open seas, North Korea's nuclear arsenal and trade on the agenda.
China considers Southeast Asia its neighbourhood and exerts huge economic and military power over the region, especially in the hotly contested South China Sea.
The US, which is locked in its own damaging trade war with China, wants to reassert its role as a leading Asia-Pacific player by bolstering its regional alliances and ensuring the flashpoint sea remains open to shipping.
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