Relations between Japan and South Korea have descended to a new low. To be sure, the downward trend in Japan’s ties with its closest neighbor is not new: Even after the two countries first agreed on a “future-oriented relationship” when Prime Minister Keizo Obuchi and President Kim Dae-jung met in 1998, Japan and South Korea have gone through cycles of rising diplomatic tensions over history issues and mutual attempts to put the relationship on a more constructive path. The most recent cycle began in August 2012 when South Korean President Lee Myung-bak visited the Takeshima islets (called Dokdo by South Korea), whose sovereignty is disputed by the two countries.

The relationship between Tokyo and Seoul saw a slight improvement after both governments signed an agreement on the “final and irreversible” settlement of the “comfort women” issue in December 2015 and signed the bilateral General Security of Military Information Agreement in November 2016 toward the end of President Park Geun-hye’s administration. However, anxiety grew during the presidential campaign as candidate Moon Jae-in openly questioned the validity of the 2015 comfort women agreement. Indeed, following his inauguration, Moon set up a presidential commission to review the agreement. While he ultimately decided in January 2018 against pursuing a renegotiation of the deal, Japan considered his decision to review the agreement as undermining its legitimacy.

The recent acceleration in the worsening state of bilateral relations was triggered by the South Korean Supreme Court’s order last October for Nippon Steel & Sumitomo Metal Corp. to financially compensate Korean laborers who were mobilized to work at its facilities during World War II. Since then, the issue of choyo-ko (Korean laborers mobilized to work at Japanese company facilities during World War II) has snowballed as South Korean courts approve (or order) seizures of Japanese companies’ assets in South Korea.

A December spat between the Maritime Self-Defense Force and the South Korean Navy, which both sides have been unable to resolve, has further contributed to bilateral relations reaching what is arguably their lowest point.

Given the shared interests of the two countries — as fellow U.S. allies and as countries that share the negative impact of an increasingly assertive and aggressive China in their neighborhood, to name a few — it is in the national interest of both Japan and South Korea to find a path that can move the bilateral relationship forward. However, several forces are working against such progress.

First and foremost, the gap in their threat perceptions of North Korea — traditionally a major bond between Tokyo and Seoul that has underpinned the relationship — is quickly widening. On the one hand, Tokyo has consistently advocated a “maximum pressure” approach: In fact, it is quite nervous about the diplomatic love affair that seemed to be quickly blooming between U.S. President Donald Trump and North Korean leader Kim Jong Un, and the prospect of Washington reaching an agreement on North Korean denuclearization that does not take Tokyo’s security concerns into account.

On the other hand, Moon has made Seoul’s reconciliation with the North his top foreign policy priority, and now faces the choice between continuing down that path at the expense of potentially weakening the U.S.-South Korea alliance — the bedrock of its own national security — or adjusting its policy approach toward North Korea. The rational policy option for Moon would be the latter, but given his sagging approval rate in South Korea, Moon likely will reconcile with North Korea.

Second, the two countries’ approaches to China — another major factor that impacts their foreign policy choices — have been divergent as well. While its relationship with Beijing has been improving for the last 18 months or so, Tokyo remains deeply concerned about China’s growing assertiveness on the military front as well as its economic reach into regions that Japan regards as important for its national interests, such as the Indo-Pacific, and has been actively trying to respond to this trend by forging closer partnerships with other like-minded nations such as Australia and India.

Seoul, on the other hand, although concerned about China flexing its economic muscle to pressure South Korea on key issues such as the U.S. deployment of Theater High-Altitude Area Defense (THAAD) in the country, has been more conciliatory in its approach toward China.

Moreover, partly driven by the above divergence in their respective policies, other factors that used to stabilize the bilateral relationship and allowed it to weather times of diplomatic tensions have begun to show signs of dysfunction.

The inability of both countries to find a path forward to settle the December incident is one example. South Korea’s court decisions against Japanese corporations — and the Moon administration’s silence on them — have had a chilling effect on bilateral economic ties. Generational changes in political leadership in both countries have resulted in the near collapse of a line of communication that existed between the two countries’ political leaders, who, despite their disagreements, still recognized the importance of sustaining a functional bilateral relationship.

Finally, the impact of the absence of the ultimate unifier, the United States, has not gone unnoticed. After all, what broke the tension between Japan and Seoul during the Park administration was a meeting between Abe, Park and U.S. President Barack Obama at the Nuclear Security Summit in the Hague in March 2014. With Trump demonstrating far more interest in bilateral approaches to his major foreign policy initiatives, there is little to suggest Trump’s interest in facilitating a conversation between Abe and Moon, let alone recognizing the importance of a coordinated U.S.-Japan-South Korea approach to make his administration’s policy toward North Korea more effective.

All of this amounts to very little incentive in both Tokyo and Seoul to make a conscious effort to get the bilateral relationship back on track. But it may be worthwhile for the two governments, particularly at the senior political leadership level, to consider this: Who will be the losers and more importantly, who will be the winners, from a prolonged standoff in the bilateral relationship?

Yuki Tatsumi is co-director of the East Asia Program at the Stimson Center in Washington. She is also a senior fellow at the Canon Institute for Global Studies in Tokyo.

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