South Korea-Japan Frictions: From Trade Conflict to Security Issues

It all started quite inconspicuously but grew into a major spanner in the works in the bilateral relations between South Korea and Japan. The two countries had an uneasy relationship in early modern times as one of them was colonized by the other in the late pre-modern period. In the post war period starting from the 1960s, South Korea modeled its economy as one of the four “tiger” economies after Japan. The other “tiger” economies were Singapore, Hong Kong and Taiwan. South Korean chaebol structure shared common features with Japan’s keiretsu conglomerates. In the global manufacturing sector, South Korea rapidly played catch up in its desire to industrialize and be as successful as Japan.

Whenever the two countries became closer, the bilateral relationship somehow always broke apart in the end when historical memories surfaced in their political constituencies. For example, in one of the peaks in their bilateral relationship, both countries co-hosted the football World Cup in 2002. This was perhaps the greatest upswing in their contemporary bilateral history. Then, the powerful K-pop wave hit Japan thereafter, creating an enormous market for Korean popular cultural products in Japan. Tohou Shinki and the Japanese no-frills, low-cost, fast-retail clothing line Uniqlo also caught South Korea by storm. Prior to K-pop wave, South Koreans had enjoyed Japanese popular cultural products for generations.

The two countries were bound together by a shared destiny and a democratic political system. They are two liberal democracies in Northeast Asia where liberal democracies are exceptions rather than the norm. Both are strong US allies and they stood on the same side in the Cold War. Both countries faced geopolitical challenges from North Korea and both countries opposed North Korean development of nuclear weapons. Japan bore the brunt of North Korean ballistic missile testing where its projectiles flew over the Hokkaido air space. Thus, the two countries had common security concerns and geopolitical alignments. Both countries warned each other of impending tests and security developments in North Korea. When South Korea President Moon Jae-in visited North Korea’s Kim Jong-un, he updated Washington D.C. and Tokyo on the latest developments and topics discussed.

In December 2015, the now-jailed former South Korean President Park Geun-hye signed an agreement with Japanese Prime Minister Shinzo Abe to resolve the comfort women issue between the two countries and they started a fund for this purpose. But when Moon came into power, this deal was scuttled. The South Korean political establishment faced a political transition from a conservative right-leaning president (Park) to a progressive, liberal, left-leaning leader (Moon). Both Moon and Park were also ideological rivals. Park had the image of a right-leaning strongman leader who crushed student demonstrations while Moon was one of the student protestors.

Then began a series of events that unraveled the post war camaraderie between the two countries. First, President Moon disbanded the fund set up in the aftermath of the December 2015 rapprochement between South Korea and Japan. The South Korean courts subsequently came up with a series of rulings against Japanese multinational companies, dredging up past historical issues and then asking for compensations. Japan, which had resolved such issues in the 1960s round of compensation and also the December 2015 deal, regretted the backsliding of historical issues resolution. Adding fuel to the fire, an incident broke out in which the Japanese government accused a South Korean naval ship (destroyer class) of locking fire control radar at a Japanese air force patrol plane in an encounter at sea.

In fact, South Korean actions unified Japanese across the political spectrum. Even the traditionally progressive, liberal and/or left-leaning newspaper Asahi Shimbun carried articles that advocated a tougher stance vis-à-vis South Korea. Eventually, the unified Japanese public strengthened the government’s resolve to initiate tough actions in the form of restrictions of three chemicals essential for the semi-conductor industry (including cleaning agents) for sale to South Korea. This was a mortal blow to South Korea as it slowed down the businesses of their semiconductors and electronics industry. South Korea scrambled for alternative sources like Belgian suppliers in the European Union. Seoul also accused Tokyo of weaponizing trade.

The breakdown in military intelligence sharing between Japan and South Korea has become an international issue of interest.

Even in the tensest trade friction moment, the Japanese honored the shipments that were already guaranteed under long term agreement, providing some form of relief to the otherwise devastating trade conflict. Japan’s explanation for restricting the chemicals to South Korea was that the trust between the two had been damaged. The Japanese media carried stories of how Japanese chemicals sold to the South Korean companies found their way to North Korea. Thus, Tokyo removed Seoul from the trade white list. The trade white list was a list of countries that enjoyed trade privileges from Japan, including shorter or accelerated inspection time period for sensitive items and alleviation of barriers to bilateral trade items.

Seoul filed a complaint to the World Trade Organization and also aired their grievances in Washington D.C. Seoul also restricted sale of sensitive items to Japan. Many analysts however saw little damage done to Japanese trade from this action because Japan import very little sensitive items from South Korea. Most acknowledged the impact on South Korea was heavier. The tit for tat approach hurt both economies in different ways, against the backdrop of a fragile global economy that is tanking under a larger trade conflict, the Sino-US trade war.

The trade tensions spilled over to diplomacy as South Korea appealed to Washington D.C. to intervene in the conflict. South Korea also lobbied US Secretary of State Mike Pompeo to help with their cause of opposing Japan’s trade decisions. The US told both its allies to come to the dialogue table. And there were even rumors of both countries meeting at a third country for talks. The foreign ministers of both countries also met for talks to resolve the trade issue. This was a far cry from the close intelligence sharing between Tokyo and Seoul when tracking the numerous ballistic missile launches and nuclear testing by Pyongyang.

The fictions soon spread to the people as South Korean supermarkets shunned Japanese products and some South Koreans began to restrict their travels to Japan. Others decided to shun Uniqlo and, in the most extreme cases, some South Koreans burnt themselves to death. Politicians from South Korea also visited the disputed Tokdo island (known as Takeshima in Japan) and shook the hands of security officers on duty in a high-profile televised manner.

The South Korean government claimed that the country would not be bullied and evoked memories of the colonial past. At one point, even the Chinese stepped in to urge both Northeast Asian states to talk to each other. China was concerned about the progress of Northeast Asian solidarity in the China Japan Korea (CJK) format. Many Northeast Asian regional schemes including the Regional Comprehensive Economic Partnership and CJK arrangements are dependent on good relations between all three countries.

A shocking development soon followed in the security realm. The General Security of Military Information Agreement (GSOMIA) agreement, signed in 2016 and binding the two countries in security sharing arrangements, broke down. South Korea decided to withdraw from it. It was a blow not just to the Japanese but also to their common security ally, the United States. The breakdown in military intelligence sharing between Japan and South Korea has become an international issue of interest. Now, both countries are trying to strengthen their intelligence sharing functions with the US and both countries are sharing information through the conduit of the US as a middle man. This is not an ideal situation by any means and even the US acknowledged this. US fears that South Korea may apply additional conditions on intelligence shared with the US that prevents the US from sharing with third parties. Both South Korea and Japan continue to share intelligence under a much narrower format with each other.

With both Washington D.C. and Beijing extending their efforts for a Seoul-Tokyo rapprochement, many in the region hope the two countries can once again trade and speak to each other. It will help the region cope with developments in the Korean Peninsula and make the East Asian region a safer place.