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The Japan-South Korea impasse

  • The Japan-South Korea impasse

By Masao Okonogi

On July 1, Japan’s Ministry of Economy, Trade and Industry released “Update of METI’s licensing policies and procedures on exports of controlled items to the Republic of Korea.” The first change concerns export controls for certain items, with METI deciding to switch from bulk licenses to individual export licenses for three items used in chip manufacturing (fluorinated polyimide, photoresists and hydrogen fluoride). This case-by-case review system was introduced on July 4.

The second was a change in export control category, with METI beginning the process to remove the Republic of Korea from its “white list” of countries with preferential trade status. This move was approved by Cabinet on August 2 and came into effect on August 28. Japan and South Korea now have a new bone of contention besides the dispute about Korean former forced laborers, namely export controls.

Justifying these restrictions, METI said that “the Japan-ROK relationship of trust has been significantly undermined” and that “certain sensitive items have been exported to the ROK with inadequate management by companies.” It is reasonable to assume that the former, in other words, the dispute about Korean former forced laborers, is Japan’s “true intention,” while the latter is Japan’s “official position.”

However, the timing of these moves was diplomatically incomprehensible. Japan had plenty of time until the next judicial measures could be taken in South Korea and it was also not as though Japan’s deadline for South Korea to meet its demand for a third-party arbitrator had passed. More to the point, these measures appear to have been exploited in the House of Councillors election announced on July 4 – such is the dissatisfaction with the judicial measures taken by South Korea within Japan.

Japan’s counterattack caused panic in South Korea. This is because no-one had anticipated that Japan, under attack over historical issues, would suddenly fight back with trade issues. The Japanese Government explained that this was simply withdrawing preferential trade status, but the government and people of South Korea understood that these were retaliatory export restrictions.

In fact, on July 15, President Moon Jae-in strongly criticized Japan for “linking economic and historical issues” and for “adopting a sudden and unilateral measure.” This move was understood as a measure to deal a blow to the semiconductor industry, which is the “key to the competitiveness” of the South Korean economy.

Besides the government and industry, the general public in South Korea also took the situation seriously and protested by shunning Japanese products and trips to Japan. The fact that China had reacted strongly to the United States deployment of THAAD in South Korea, restricting tourism to South Korea and hindering the commercial operations of the Lotte Group in China had not been forgotten. This latest situation was understood as more serious than that.

With export controls growing tighter, the South Korean Government increased its criticism of Japan but also sought a resolution of the tensions through negotiation. For example, in a speech on August 15, President Moon Jae-in curbed his criticism of Japan, saying “If Japan chooses the path of dialogue and cooperation, we will gladly join hands.”

However, the Japanese Government did not respond to this. In other words, it didn’t change its policy that Japan’s tightening of export controls against South Korea is a domestic measure and is not a subject for diplomatic negotiation. This indicated the impossibility of negotiation.

On August 22, the South Korean Government decided to terminate the General Security of Military Information Agreement (GSOMIA) between Japan and South Korea and notified Japan of its decision the following day. Because the Japanese Government failed to respond to President Moon’s speech seeking dialogue, this time, South Korea expanded the battle lines. Thus, the tensions between Japan and South Korea, which started in the historical domain, have now spread to trade and national security domains.

However, South Korea’s counterattack drew a strong reaction from the U.S. Government, which attaches importance to close mutual cooperation and security between Japan, the United States and South Korea. Secretary of State Mike Pompeo immediately said the United States was “disappointed” to see South Korea’s decision and urged Japan and South Korea to continue dialogue and to “put that relationship back in the right place.” Likewise, the following day, President Trump also commented, “We’ll see what happens with South Korea.”

Even more clear cut was the reaction of the U.S. Department of Defense. In spite of pressure from South Korea’s Ministry of Foreign Affairs to curb public criticism, on August 28, Defense Secretary Mark Esper commented, “I was and I remain very disappointed,” stressing “we have common threats facing us, North Korea and China, and we’re stronger when we work together.”

GSOMIA will expire on November 23. The United States clearly expects South Korea to retract its decision by then. However, South Korea will only do this if Japan scraps its new export control policy. If this precondition is not met, the South Korean Government will probably start preparing for next year’s general election in April. Japan’s House of Representatives may also be dissolved around the same time.

Even if the Japan-South Korea feud is exploited in these two elections, this is not going to improve Japan-South Korea relations.

(Masao Okonogi is Professor Emeritus at Keio University.)


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