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Asset seizure further imperils Japan-Korea ties

  • Asset seizure and enchashment will instantly shatter the coordination between Japan and South Korea, and send the two countries into a state of protracted confrontation.

By Shin Kawashima

Japan-South Korea relations deteriorated further after the Japanese government’s decision to remove South Korea from its list of trusted trade partners called “white countries,” and the South Korean government took the same countermeasure.

In Japan, we barely see any signs of a campaign to boycott products made in South Korea, but in South Korea, a campaign to boycott products made in Japan is spreading.

There are many such popular movements in South Korea, and a vicious circle is evident in which the more such movements are reported by the Japanese media, the more Japan’s relationship with South Korea deteriorates. The worsening public sentiment between the two countries will not abate for some time.

In fact, however, it is simply that both countries struck each other off their “white lists” and did not put a ban on exports. They can still export goods and services using the standard procedures.

In this situation, the Japanese government granted early permission for applications for exports to Samsung Electro-Mechanics. This means that such examinations will be made for individual contracts, and the Japanese government did not take any measures involving placing a ban on South Korean goods and services.

If such contract-based applications and permissions get on the right track, even if negative mutual feelings persist between the two countries, actual bilateral economic and trading relationships will gradually revert to something close to their original state. If this occurs, the situation will have improved by this fall to some extent. The process toward improving bilateral relations will be evident around the time of the Asian summit meetings and the Asia-Pacific Economic Cooperation (APEC) in fall, and there is a possibility that the Japan-China-South Korea Summit will be held this year.

It has now been decided that several Japanese companies must compensate South Koreans in accordance with the Supreme Court of South Korea’s ruling on the so-called wartime forced labor, and these companies’ assets in South Korea have been seized.

South Korean policy or court judgment is understandable in terms of transitional justice. It is also understandable that the government cannot interfere in judiciary judgment in terms of the separation of the administrative, legislative and judiciary branches of government. In this sense, the seizure of Japanese companies’ assets in South Korea may be a logical conclusion.

On the other hand, the Japanese side takes the viewpoint that they have already decided not to make such a claim based on agreements, including bilateral treaties. This line of reasoning means that both the South Korean court ruling and the seizure of Japanese companies’ assets in South Korea are unjust treatments. In this sense, the South Korean government will be required to clarify how they have interpreted treaties and agreements that have existed between the two countries to date.

If this coincides with the Japanese interpretation, it means that the South Korean judiciary has interpreted the treaties in a different manner from the South Korean government. If the South Korean interpretation coincides with that of Japan, it means that both Japan and South Korea should disclose and examine public documents about the details of their bilateral negotiations.

Meanwhile, aside from these logical issues, a realistic and larger problem exists. This problem is significant enough to completely overturn the above-mentioned scenario for improving bilateral relations. That is, it is a case in which Japanese companies’ seized assets in South Korea are converted into cash and paid to the plaintiffs.

If the Japanese companies’ assets remain seized, few possibilities remain. But if the assets are encashed and the money is paid to the plaintiffs, the Japanese government will need to take a more rigorous approach to the South Korean government.

Currently, Japan and South Korea are having various dialogues in an effort to improve their bilateral relations. They are seeking a realistic continuation of trading relations and the timing of diplomatic settlement, and they are also considering logical dialogues to some extent at the same time. But if Japanese companies’ assets in South Korea are immediately converted into cash at this stage, this coordination will break down instantly and the two countries will enter a state of confrontation.

It is undeniable that this confrontation will be prolonged.

(Shin Kawashima is Professor at University of Tokyo, Japan.)

 

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