Source: East Asia Forum
Authors: Wrenn Yennie Lindgren, NUPI, Eun Hee Woo, Freie Universität Berlin, Ulv Hanssen, Soka University, and Petter Y. Lindgren, OGEAR
While the world is engrossed in the US–China trade war, Japan and South Korea are engulfed in a trade dispute of their own. Japan and South Korea exhibit political and economic traits that should foster good relations. Both countries are capitalist democracies and closely allied with the United States. They share a number of geopolitical concerns such as dwindling trust in the US security guarantee, a rising China with power ambitions and an unpredictable North Korea with nuclear weapons. Despite this common ground, Japan and South Korea are willing to risk large economic losses and weakening security relations.
The trade war between the two countries began in July 2019 when Japan imposed restrictions on certain chemical exports to South Korea, with the justification that sensitive technology exports to South Korea might have been leaked to countries like North Korea. South Korean citizens responded to the restrictions with large demonstrations and boycotts of Japanese goods.
In August, Japan removed South Korea from its whitelist of countries that do not require prior approval for the trade of certain chemicals and dual-use products. The South Korean government then downgraded Japan to a trade category consisting of non-favoured countries that do not comply with international norms. This resulted in longer bureaucratic procedures for businesses that export goods to each other in both countries.
Behind Japan’s trade restrictions is a South Korean Supreme Court ruling ordering Japanese companies to compensate South Korean forced labourers during Japan’s occupation of the Korean peninsula. Japan holds that a complete settlement regarding the colonial period took place during the countries’ diplomatic normalisation in 1965. The Abe …continue reading