South Korea will stop sharing intelligence with Japan amid an escalating dispute over history and trade, South Korea's presidential office said on Thursday.

Exchanging military intelligence is not in the "national interest" given the "grave change" in security cooperation created by Japan's decision to remove South Korea's fast-track export status, said Kim You-geun, a deputy director of the National Security Council.

The three-year-old military information agreement was due to be automatically renewed on Saturday, unless either side decided to cancel it.

Seoul's response comes after Japan earlier this month cited national security reasons for removing South Korea from a "white list" of countries receiving preferential export controls. South Korea responded by revoking Japan's special trade status. 

Seoul views its removal from the "white list" as retaliation for a South Korean court ruling last year that Japanese firms should compensate forced laborers used before and during World War II.

Japan says wartime issues were settled by a 1965 treaty normalizing bilateral ties, but territorial disputes remain over certain islands.

The intensifying spat between South Korea and Japan represents a setback to US efforts to unite its Asian allies at a time when Washington is in a trade dispute with China and seeking to restart North Korea denuclearization talks.

cw/ng (AP, Reuters)

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