South Korea on Wednesday officially dropped Japan from its "white list" of trusted trade partners, the latest move in a bitter row stemming from Tokyo's use of forced labour during World War II. South Korea had already warned Tokyo it would reciprocate following a similar move by Japan in late August to downgrade South Korea's trade status. Local companies shipping strategic goods to Japan would now have to submit more documents and approval would take around 15 days instead of five, Yonhap news agency reported, quoting the South Korean trade ministry. Seoul and Tokyo have been embroiled in the trade dispute since July, when Japan tightened export controls on three chemicals essential to key products of South Korean tech companies such as Samsung.

READ | North Korea test-fires 'Super Large Multiple Rocket Launcher'

South Koreans boycott Japanese goods

Tokyo says its decision was made on grounds of national security, but it followed a series of South Korean court rulings ordering Japanese firms to pay for forced labour during World War II. South Koreans have since mounted a widespread boycott of Japanese goods, including beer, cosmetic products and cars, among others. Imports of Japanese beer -- long a firm favourite with South Korean drinkers -- slumped to almost zero last month, according to trade data released Monday. Several South Korean airlines including flag carrier Korean Air have also suspended routes to Japan because of falling demand from South Koreans.

READ | South Korea on highest alert after African swine fever found

Japanese firms see slump

Japanese automakers have also seen sales in South Korea slump in the recent months. Both Japan and South Korea are market economies and they are major US allies faced with an overbearing China and nuclear-armed North Korea. But their relationship continues to be heavily affected by Japan's 35-year-old colonial rule of the Korean peninsula in the early 20th century. Japan says all reparations claims were settled under a 1965 treaty and associated economic agreement that was supposed to have normalised their relations.

READ | Kim Jong Un invited Donald Trump to North Korea in new letter: Report