The brewing hostility between South Korea-Japan. Is this a beginning of a new trade war?

  19-Jul-2019 13:29:31

Japan South Korea USA North Korea

Tension between South Korea and Japan intensified, when Japan's Prime Minister imposed new restrictions on exports that could hit South Korea's tech industry. It seems trade war over political issues has become quite a vogue, as the US and China continue their wide-ranging tarrif battle In response to this, some Koreans called for a boycott of Japanese goods. "The two governments will engage in a tit-for-tat exchange of retaliatory measures for at least several months that further sours bilateral relations", said Scott Seaman, director for Asia at political consultancy Eurasia Group. The latest escalation seems in part to have been caused by Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae--in failing to make progress on outstanding disagreements at last month's G-20 summit. According to Seaman, Abe "appears to have been particularly irked" by the failure to resolve "differences over the handling of South Korean court rulings awarding damages to Koreans claiming to have been forced to work for Japanese firms during World War II".


A series of incidents have driven relations between Japan and South Korea to new lows. Frustration has mounted as each government has blamed the other for the sorry state of affairs. Though domestic politics share the blame, the real problem is more deeply rooted. Each country sees the other as the cornerstone of its own national identity and their respective self images make the conflict inevitable. While the US can help the two countries address this problem, only courageous and inventive leadership in Tokyo and Seoul can resolve it.

The recent incidents include-

• Encounter between military aircraft and naval vessels that violate standard operating procedures, indicating hostile intent of the two countries.

• South Korean court ruling that disregard provisions of 1965 treaty that normalised relations between two countries thereby allowing South Korean labourers forced to work for Japanese companies during World War II to sue for back pay.

• The Seoul government's decision to revisit and ultimately abandon the 2015 agreement between the two governments that purported to "permenantly resolve" the issue.

Other longstanding issues include-

• The territorial dispute over islands, called Dokdo by South Korea (which occupies the island), Takenshima by Japan and Liancourt Rocks by those who don't want to take sides.

• The name of the water body between the two countries which is generally recognised as the Sea of Japan but Koreans want it to be called the East Sea.

• The supression of Korean culture and the appropriation of cultural artifacts by Japanese during their occupation of the peninsula.


The root of this turmoil is Japan's brutal colonial rule over Korea, from 1910 to 1945. The long-simmering resentment between the two began boiling over recently, after South Korea's Supreme Court held certain Japanese corporations, ordering them to pay compensation for their use of Korean forced labour during World War II. The ruling came amid related discord over a 2015 agreement, on the emotional issue of 'comfort women'- a euphemism for the women who were forced into sexual services for Japanese soldiers before and during World War II. According to some, all this represents the lowest point in the Japan-South Korea relationship since 1965.

Japan has argued that the forced larbour lawsuits are precluded by the 1965 agreement, restoring diplomatic relations between South Korea and Japan, in which Japan paid $800 million in cash and loans, stating that if the workers are now entitled to any payment, it would be the responsibilty of the Korean government. On the comfort women issue, Japan has talked a legalistic approach, one that has done nothing to win over public support internationally. It had hoped that a 2015 agreement with the previous Korean government of Park Guen-hye would put the matter to rest, as the pact contained some of Japan's strongest apology language to date and finally saw the Japanese government making direct payment to the women still alive. However the fact that neither Japan nor South Korea under the Park administration consulted the former comfort women in the negotiation process, doomed the process from the start.

A study conducted for Japan's Yomiuri Shimbun and South Korea's Hankook Ilbo, found that 74% of the Japanese were distrustful of South Koreans, a record high, while 75% of South Koreans did not trust Japanese people. The comfort women issue was cited as a major reason, with 87% of South Koreans saying Japan still needed to apologise and 80% of Japanese saying that the country had apologised enough.


Japan's Ministry of Economy, Trade and Industry issued a statement that Tokyo "will apply updated licensing policies and procedures on the export and transfer of controlled items and their relevant technologies (to South Korea)". "Through careful consideration among the relevant ministries in Japan, the Government of Japan cannot help but state that Japan-South Korea relationship of trust in the field of expirt control and regulation has been significantly undermined", the statement said.

Tokyo's changes towards its approach to South Korean trade has already gone into effect and Japanese exporters are now required to apply for licenses for certain individual shipments to South Korea. That will include export of chemicals, mostly used for making refrigerants, pharmacuetical intermediates, metal manufacturing and sometimes semi-conductor preparation. Additionally, Tokyo removed South Korea from the list of "white countries"- countries that Japan deems to have trustworthy export control systems. "Broadly speaking the current group of 27 white countries are those that Japan considers to have strict export control regimes and with which it can hold regular discussions on such matters", said Seaman. Seaman pointed out that "Tokyo and Seoul have reportedly had only one such exchange since 2016 and none since Moon took office in May 2017". That, he added, further underpins "the Abe Government's argument that trust in this area has broken down". Lastly he cautioned that if the tension does continue to escalate, cooperation outside bilateral economic relations, such as coordinating in efforts to manage North Korea and other regional threats will become challenging.

All this deserves serious attention. Yet it is also an overstatement to say Japan-South Korea relations are in dire straits. None of the historical issues changes the obvious fact that Japan and South Korea are very important to each other. Both are prosperous democracies that are facing off two of the greatest international security challenges of 21st century- a rising hegemon in China and a nuclear North Korea. As two of the world's leading industrial powers (Japan is 4th in the world in industrial output and South Korea 7th), the countries have formed a close economic relationship in which each takes a different but complementary position in the global supply chain. For example, South Korea is a global leader in semi-conductor production but South Korean companies buy the high-tech machinery and processed chemicals to build semi-conductors from Japan. It will now have to be seen if the latest turn of events put any meaningful dent in these ties.

By: Hera Rizwan