The recent escalation of diplomatic and trade disputes between South Korea and Japan has alarmed numerous observers and is rather confusing to many around the world to whom the two countries seem to have much to lose and little to gain by the deterioration of the bilateral relationship. What underlying forces are driving the conflict? Are these new forces, or the same historical forces coming to a head? How much are factors from the international environment, such as the behavior of the United States, influencing the current escalation?

These were some of the questions that took center stage at a recent conference, “Japan and South Korea on the Brink: Escalating Friction Amidst an Uncertain World,” convened jointly by APARC’s Japan Program and Korea Program. The conference brought together experts in the international affairs and trade relations of South Korea, Japan, and the United States to shed light into the current conflict between the two U.S. allies. 

In his welcome remarks, APARC Director and Korea Program Director Gi-Wook Shin reminded the audience that Japan and South Korea have experienced tensions over colonial and wartime history and hence, in that sense, the recent conflict is nothing new. In the past, however, the tensions were mostly kept under control because the two countries well understood that it was in their mutual interest to maintain a cooperative relationship and keep history issues separate from other important economic and security issues. Over the past year, however, tensions over history have permeated economic and security issues amid rising nationalism in both countries.

A Problem of Alliance Management

The conference opened with a panel on diplomacy and international relations. Kak-Soo Shin, former Korean ambassador to Japan, situated the current crisis in the context of the regional strategy environment, noting that the Northern triangle – composed of North Korea, China, and Russia – has been gaining influence, while the Southern triangle – composed of South Korea, Japan, and the United States – has weakened. “The souring Japan-Korea relationship is a big blow to the maintenance of the Southern triangle and its ability to cope with the volatile security environment in Northeast Asia,” Shin cautioned.

Hitoshi Tanaka, chairman of the Institute for International Strategy at the Japan Research Institute, ltd., offered an overview of the reasons underlying the escalation in the bilateral relationship between Japan and South Korea, foremost of which, he said, is the declining mutual importance of the two nations to each other vis-à-vis China’s emergence as their largest trade partner. “Unless we feel that the future relationship is essential to both nations there is no way to address the conflict,” he said.

Joseph Yun, former deputy assistant secretary of state for Korea and Japan and former special representative on North Korea, emphasized that Tokyo and Seoul are “eroding the trilateral security arrangement that the United States has led in Northeast Asia since the end of the Second World War” – an arrangement that has been responsible for prosperity throughout Northeast Asia. The root problem, he argued, is alliance management, from which the United States “has been conspicuously absent.”

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A Conflict in an Age of Changing Global Trade Order

The second panel turned eyes to the trade issues involved in the conflict between Japan and South Korea. Professor Yukiko Fukagawa of the School of Political Science and Economics at Waseda University, an expert in Korean economic development, observed that the friction between the two countries has escalated since 2000, when Korean global businesses like Hyundai and Samsung rose to fame. Since then, she argued, what has happened in Korea is a process of economic nationalism and “Korea seems to find it or interpret it as a kind of transitional justice against Japan.”

Seokyoung Choi, former Korean ambassador to the WTO and UN and former deputy minister for trade, explained the background for the Japan-Korea trade row and each side’s arguments. As a way forward, he said, both countries must consider several important imperatives, including the needs to cooperate in an era of tectonic changes to the global trade order, to address expanding fault lines in East Asia given the spillover effects of the U.S.-China trade war, and to complement for deficits of leadership and trust in Northeast Asia. 

Aiko Lane, executive director of the U.S.-Japan Business Council, discussed the main concerns the Japan-Korea friction poses for U.S. businesses, including regulatory uncertainty, supply chain disruptions, and delays in shipment. Further escalation in the relationship, she argued, could potentially inflict long-term damage to the regional ICT and manufacturing industries. Potential impacts include driving costs up for consumers and making it more lucrative for other countries to supply semiconductor materials to Korea.

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