Global attention might be focused on the escalating U.S.-China trade war, but Beijing and Washington are not the only ones to be at tariff loggerheads. Recent weeks have seen the tension ratcheting up between neighbours and U.S. allies, Japan and South Korea, with a string of tit-for-tat measures that culminated this week in Seoul taking Japan off its favoured trade partners’ list. Japan had announced a similar decision earlier in August, removing South Korea from its “white list,” an index of trusted trade partners.
Prima facie the spat traces to July, when Tokyo tightened export controls on three chemicals — fluorinated polyamides, photoresists, and hydrogen fluoride — all crucial to producing semiconductors in Korea. Semiconductors are key materials installed in most electronic devices and have long been South Korea’s top export item. Japan’s restrictions not only pose a significant threat to South Korea’s economy, but also to global supply chains for products like smartphones and laptops.
Tokyo implied that the controls were imposed because of an ostensible risk that South Korea would leak sensitive information to North Korea, although no details were provided. Seoul vehemently denied the accusations, and a furious public backlash ensued, with Koreans boycotting Japanese beer, and clothing brands like Uniqlo.
The spat may spill over into the bilateral security relationship, undermining strategic ties between two of the countries most at risk from North Korea’s nuclear and missile threats. Seoul has said it is reviewing whether or not to continue with the 2016 military intelligence sharing agreement it had signed with Tokyo after a long and arduous negotiation. A decision on the matter will need to be taken before August 24, when the agreement is up for renewal.
Japan has also indicated that it will lower South Korea’s standing as a security cooperation partner. The draft of an annual white paper on Japan’s security ties with countries other than the U.S., demoted South Korea from its number two position last year, to number four, behind Australia, India and ASEAN (Association of Southeast Asian Nations). The reason that the dispute is proving so intractable is because its origins lie in unresolved historical grievances that are proving resistant to the passing of time: Japan’s 1910-45 colonial rule of the Korean Peninsula and its wartime abuses. Most analysts believe the real cause of the current tension lies in last years’ decision by the South Korean Supreme Court to order Japanese firms to compensate Koreans who were forced to work in wartime Japanese mines and factories. Tokyo was incensed, saying that all such compensatory claims had already been settled under a 1965 treaty that had established diplomatic relations between the two countries.
The forced labour issue is mirrored by the other ongoing grievance of compensation for Korean women forced or induced to service the Japanese military’s Second World War brothels. Here too, a bilateral December 2015 agreement in which Japan agreed to pay ¥1bn (over $8 million) into a fund to help care for the surviving ‘comfort’ women, was supposedly a “final and irreversible” resolution to the issue.
South Korea’s current leader, Moon Jae-in, and many Korean people, however, do not accept the validity of that agreement. Matters are not helped by the fact that Japan’s Prime Minister, Shinzo Abe, is a self-proclaimed nationalist whose grandfather, Nobusuke Kishi was the wartime Minister of Munitions.
Given their geopolitical circumstances, the rational move for Japan and South Korea would be the development of closer defence and intelligence cooperation, and leveraging each other’s economic strengths. Instead, the emotional politics of humiliation and nationalism have resulted in a lose-lose, ping-pong game of trade retaliations. In circumstances where historical wounds remain open, the kind of bold collaborative initiatives that would be in the interest of both nations and the region, are sabotaged by a seemingly perpetual intransigence.
North East Asia is a crucial theatre in global geopolitics, and any change in the South Korea-Japan dynamic has the potential to upset the balance of power between the other key players in the region: China, Russia and the U.S. Rocky days lie ahead.
Pallavi Aiyar is an author and journalist based in Tokyo.
