South Korean President Moon Jae-in (C) listens to a report from officials related to the General Security of Military Information Agreement (GSOMIA) with Japan at a National Security Council meeting at the Presidential Blue House, Aug. 22, 2019 in Seoul, South Korea. Getty/Handout

Seoul — South Korea has voiced "strong regret" over Japan's decision to hit the country with export restrictions as relations between the two key U.S. allies in Asia deteriorate. What started as a trade dispute is now threatening a crucial security alliance.

Japan officially removed South Korea on Wednesday from its "white list" of trade partners, ending manufacturers' ability to fast-track goods into the Japanese market. South Korea officially summoned the Japanese ambassador in Seoul to complain about it on Wednesday.

The white list designates countries that are deemed to be trustworthy trade partners, and it comes with the benefit of simplified access and expedited customs procedures. Last week, in response to the planned move by Japan, South Korea terminated a military and intelligence-sharing pact with Tokyo.

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A vital security alliance

That General Security of Military Information Agreement, known by the acronym GSOMIA, is seen as a major boon to security in Northeast Asia, especially as North Korea continues to test launch missiles into the sea between the Korean Peninsula and Japan.

Kim Jong Un has test launched weapons nine times this year, all believed to be short-range missiles. Abe has said multiple times that the projectile tests did not pose a direct threat to Japan, but the weapons are believed to be capable of reaching both South Korea and Japan.

North Korea's latest missile test was on Aug. 24, not long after South Korea decided to abandon the GSOMIA pact with Japan. Japan reported the launch 26 minutes before the South Korean Joint Chiefs of Staff made their announcement, showing that Tokyo is not dependant on Seoul for its information.

The U.S., Japan and South Korea have to work together to draw North Korea's Kim back to the denuclearization talks.

If the allies fail to speak with one voice, it will bolster Kim's negotiating position.

"Treating us like an adversary"

Fuelling the tension, South Korea has conducted its biggest-ever military exercise on a tiny islet that Japan also claims as sovereign territory. The dispute over the small rocky island known as Dokdo in South Korea and Takeshima in Japan is long-standing, but South Korea's decision to grow the war games on it was seen by Tokyo as a provocative move.

Members of South Korean Marine Corps take part in a military exercise in remote islands called Dokdo in Korean and Takeshima in Japanese, Aug. 25, 2019. HANDOUT

Japanese Prime Minister Shinzo Abe said publicly that South Korea could not be trusted.

On Wednesday, South Korean President Moon Jae-in accused Abe of "treating us like an adversary."

"The purpose of GSOMIA between Korea and Japan is to facilitate the exchange of sensitive military information between the two countries based on a very high level of mutual trust," Moon said. "Now that basic trust has been undermined between the two countries as Japan is claiming, there is no justification for maintaining GSOMIA."

He said he hoped the two nations would resolve their differences — "if Japan withdraws the unwarranted measures" of removing South Korea from its trade white list.