South Korea could mitigate the impact of an ongoing dispute with Japan by establishing a “peace economy” based on inter-Korean economic cooperation, President Moon Jae-in said on Monday.

Speaking at a meeting with chief aides, Moon stressed the importance of economic cooperation between Seoul and Pyongyang as a means to overcome difficulties caused by an escalating trade dispute with Tokyo.

South Korea has been able to reaffirm the “desperate need” to achieve a so-called “peace economy” through the ongoing feud with Japan, Moon said.

Tokyo removed Seoul from its export white list on Friday, in a move seen as