Business

Japan-South Korea row may cause lasting economic and security shift, aiding China and North

by Tomoyuki Tachikawa

Kyodo, Staff Report

Escalating tensions between Japan and South Korea, both key U.S. allies in East Asia, threaten to change long-standing economic and security structures in the region across the board, to the potential benefit of China and North Korea, foreign affairs experts have cautioned.

As long as Tokyo and Seoul remain at odds over bilateral matters, weakened trilateral cooperation with Washington may allow Beijing to boost its influence in economic, technology and security fields in East Asia, they say, noting ongoing U.S.-China trade and currency spats.

Frayed security relations among Japan, South Korea and the United States could also lead to a failure to deter North Korea from developing new weapons, which would undermine multilateral efforts to contain the nuclear threat from Pyongyang.

Some pundits in the United States have urged U.S. President Donald Trump and Prime Minister Shinzo Abe, who has adopted a hard-line stance against South Korea, to try to find a way to ease the tensions between Tokyo and Seoul for the sake of regional peace and stability.

In recent months, and following Japan’s imposition of export control measures in the wake of a string of South Korean court rulings last year ordering compensation for wartime forced labor, ties between the two nations have worsened to the most strained situation since relations were normalized in 1965.

Many protesters rallied against Abe in Seoul on Thursday as the city marked Liberation Day and 74 years since the end of Japanese colonial rule.

Last week Trump called on Tokyo and Seoul to improve their relations, saying that intensifying tensions between the two Asian countries put the United States in a “bad position.”

“South Korea and Japan are fighting all the time,” Trump told reporters at the White House. “They’re supposed to be allies.”

In 2018, South Korea’s Supreme Court ruled that Japanese companies must compensate those subject to forced labor during Japan’s colonial rule of the Korean Peninsula, from 1910 to 1945.

Japan, however, has rejected the rulings as contrary to a 1965 bilateral agreement said to have settled the compensation issue “finally and completely.” Based on the agreement, Japan provided South Korea with a total of $500 million lump sum in financial aid including loans and grants. Abe has lambasted South Korea for “violating the international treaty.”

On Aug. 2, Tokyo decided to revoke Seoul’s preferential status as a trade partner for the purchase of goods that could be diverted for military use, citing security concerns. Seoul has argued that the action is a retaliation in response to the court rulings.

Since early July, Japan has also tightened controls on South Korea-bound exports of key materials used to manufacture semiconductors and display panels. The semiconductor industry is a key engine of South Korea’s economy.

At a three-way meeting in Bangkok earlier this month, U.S. Secretary of State Mike Pompeo encouraged Japanese and South Korean counterparts to make efforts to resolve the bitter dispute through dialogue, but the tensions have shown little signs of petering out.

Rorry Daniels, deputy project director for the Forum on Asia-Pacific Security at the National Committee on American Foreign Policy in New York, said that if ties between Tokyo and Seoul worsen further, “there could be long-term strategic implications” in Asia.

The deterioration in relations with Tokyo is likely to dampen the possibility of Seoul joining the Trans-Pacific Partnership free trade pact, a Japan-led high-standard regional trade agreement, which could make South Korea more dependent on China’s economy.

The TPP, revised after the U.S. withdrew, brings together 11 Asia-Pacific nations including Australia, Canada, Japan, Mexico and Singapore. Although China and South Korea are not members of the pact, Seoul had shown interest in participating in it.

South Korea’s greater reliance on Asia’s biggest economy would “give Beijing more leverage over Seoul in any conflicts of interest, and affect U.S. efforts to diversify supply chains away from China,” Daniels said.

Other foreign affairs experts in the United States have expressed similar views, saying that if the Japan-South Korea economic connection is fragile, China would likely become a leading provider of semiconductor and next-generation 5G network equipment.

If Japan reduces exports to South Korea, China could “benefit” as an alternative supplier to its neighbor, said Troy Stangarone, a senior director at the Korea Economic Institute in Washington. “This could create openings to strengthen China’s semiconductor industry.”

Stangarone also said the rift would let China dominate the development of 5G technology, which enables telecommunications devices to wirelessly connect to almost all products and services at extremely high speeds — including those related to military affairs.

South Korea’s electronics giant Samsung Electronics Co. is one of the leading 5G equipment providers in the world and Japan supplies crucial parts to the firm, Stangarone said.

“Ensuring smooth cooperation in technology is critical” to the economic and security interests of Tokyo and Seoul, he added, noting that Washington has voiced anxiety that Beijing’s rise in the 5G field would jeopardize the national security of the United States and its allies.

In other potential security impacts, Seoul has also threatened to terminate a military intelligence-sharing pact with Tokyo — a move that would undermine trilateral cooperation with Washington and decrease U.S. presence in the region.

Daniels said the Japan-South Korea rift “introduces new irritants at a time when better trilateral coordination is needed to provide reassurances that the United States and its regional partners can balance China’s growing power, and can contain and deter North Korea’s provocative behavior.”

As for inter-Korean relations, South Korean President Moon Jae-in has pledged to deepen ties with the North to challenge Japan.

If economic cooperation between the two Koreas is established, “we would be able to take a giant leap forward and catch up to Japan’s dominance,” Moon said earlier this month.

A Japanese government source said, “I am wondering if President Moon wants to form a united country with North Korea that has nuclear weapons by breaking off from Japan and the United States.”

Young-Key Kim-Renaud, a professor emeritus at George Washington University in Washington, said that if cooperation among the United States, Japan and South Korea ceases to exist, it will only “give confidence to potential enemies” like North Korea.

Criticizing Trump for getting closer to Pyongyang, the specialist in Korean affairs said it was “regrettable” that Washington “seems to be more engaged with North Korea” than “trying to encourage and help (Tokyo and Seoul) to mend their tearing relationship.”

“In the process, the U.S. influence in the region will be greatly diminished. Simply saying that the two countries are equally important allies and the problem should be managed by the two makes the United States look weak and irresponsible,” Kim-Renaud added.

North Korea has carried out five rounds of weapons launches in the just over two weeks since last month, but Trump has so far downplayed Pyongyang’s firings of projectiles, saying they were “short-range missiles” that cannot reach the United States.

Stangarone, meanwhile, has blamed Abe for eroding ties between Japan and South Korea, saying, “One reason that this crisis is difficult to resolve is that Japan’s objective is unclear.”

“On one level Japan has said that this has nothing to do with the issue of forced labor, but at the same time used that as an example of why it cannot trust South Korea. This has muddied the Japanese government’s message,” he said.

“Once Japan is clear about its objectives, it will help to facilitate discussions,” Stangarone said.