[News analysis] Japan’s attempts to shut out South Korea from international community

Posted on : 2019-07-03 17:57 KST Modified on : 2019-07-03 17:57 KST
Abe seems intent on rallying conservative resentment for S. Korea ahead of election
South Korean Minister of Trade
South Korean Minister of Trade

South Korea-Japan relations have been plunged deep into a tunnel of conflict with no exit in sight following Japan’s implementation of export regulations targeting South Korea’s semiconductor and display industries as economic retaliation for a South Korean Supreme Court ruling on forced labor mobilization.

Following its announcement of plans to file a complaint to the World Trade Organization (WTO), Seoul plans to have the Ministry of Trade, Industry and Energy (MOTIE) and other agencies work with domestic companies to develop plans for minimizing the economic damage. Diplomatically, it plans to demand Japan’s withdrawal of the economic retaliation measures and continue calling for “sincere discussions” of an approach proposed last month in which consolation payments to conscription survivors would be made through a “voluntary fund” by South Korean and Japanese businesses. But businesses in the mainstay industries of semiconductors and displays are deeply concerned about the blow they stand to suffer.

To begin with, no way out appears likely in the short term. The hardline stance from Japan is being spearheaded by Prime Minister Shinzo Abe ahead of the House of Councillors election on July 21. Prior to its announcement of the economic retaliation measures on July 1, Japan made no announcement to South Korea via diplomatic channels – an omission believed to stem from Abe bypassing the Japanese Foreign Ministry to implement his hardline approach from his own office.

Experts said the situation for now will require a two-track strategy of responding firmly through the WTO complaint and other means while continuing to push for a diplomatic solution.

“Prime Minister Abe opted to play a strong card to rally conservatives, but even in Japan this has been seen as ‘excessive,’ and it becomes a burden if the conflict drags out into the long term,” said Yang Kee-ho, a professor at Sungkonghoe University.

“Once the House of Councillors election is over, we’ll see the companies that export parts to South Korea leading the calls to find a solution,” he predicted.

Yang also said the South Korean government “needs to respond proactively through its WTO complaint, while continuing to negotiate behind the scenes to find a way out diplomatically.”

Lee Won-deog, a professor at Kookmin University, also said the South Korean government “needs to work proactively by demanding the start of talks with the Japanese government to make concrete progress with its previous South Korea-Japan fund proposal, improving communication with the conscription survivors so that the cash conversion measures [for seized Japanese company assets] can be temporarily deferred, and encouraging South Korean and Japanese companies to participate.”

Other observers said a more fundamental solution needs to be found, noting Abe and other Japanese hardliners’ underlying aims of “shutting out” South Korea. The measures are based on provisions in Japan’s Foreign Exchange and Foreign Trade Act that restrict exports of components in cases seen as posing threats to international security, including concerns about possible use in weapons of mass destruction. They involve amending a directive and presidential decree to take South Korea off a list of 27 countries that require no separate approval for the exportation of parts because of the absence of international security risks.

Attorney Song Gi-ho, who serves a trade expert for the group MINBYUN-Lawyers for a Democratic Society, said the measure “is an attempt to fundamentally alter South Korea’s standing in the Japanese trade order by amending the law despite the lack of any basis for claiming that component exports to South Korea pose any kind of security risk.”

“Japanese hardliners are operating under a long-term strategy that goes beyond one-off retaliation on the forced labor issue and seeks to block South Korea’s economic growth by excluding it from the international division of labor and using ‘security concerns’ as an excuse to discourage closeness between South and North Korea,” he said. With major trends of the international division of labor now undergoing a shift in the area of South Korea-Japan relations in addition to the US-China trade war, this argument suggests the situation calls for developing a basic strategy on how the South Korean economy should respond and pursue innovation.

By Park Min-hee, staff reporter

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