Tokyo has requested Seoul to respond to its request by Thursday to establish a mediation committee to discuss the South Korean Supreme Court's ruling on the issue of forced labor during Japan's colonial rule.
However, the South Korean government says it cannot meet the deadline set unilaterally by Tokyo.
Japan is expected to remove South Korea from its so-called "white list" of countries with minimum trade restrictions, under the grounds that Seoul refused to respond to its diplomatic efforts to resolve the issue of wartime forced labor.
After receiving feedback from related parties through July 24th, Tokyo will likely deal with the issue during its cabinet meeting and remove Seoul from its "white list" in late August.
However, the schedule could be delayed depending on the results of the Japanese House of Councilors election slated for July 21st.
The timeline could also be affected by Seoul's message to Tokyo on its August 15th National Liberation Day.
Once Seoul is removed from the "white list," over 11-hundred items, including advanced tech materials and sensors, would be affected.
"It'll be difficult to continue the development of future cars. There would be immense repercussions in many areas including employment."
To this, the South Korean government and businesses are planning to jointly respond to Japan's expected move.
Seoul's trade ministry says the government, public institutions and corporations are devising countermeasures to deal with Japan's trade curbs.
It added a supplementary budget would be earmarked for South Korean industries that currently depend heavily on Japan.
Kim Hyo-sun, Arirang News.