Business bigwigs consider building EU-style single market for Korea, Japan

Posted on : 2024-05-24 16:43 KST Modified on : 2024-05-24 16:43 KST
Talks between two figures at the top of the business worlds in the two respective countries called economic cooperation a “necessity” and an “urgent” task
SK Group Chairperson Chey Tae-won (center), who also serves as the chairperson of the Korean Chamber of Commerce and Industry, speaks at the Nikkei Forum in Tokyo, Japan, on May 23, 2024, alongside Suntory CEO Takeshi Niinami (right) on the topic of “going beyond partnership” between South Korea and Japan. (still from Nikkei Forum livestream) 
SK Group Chairperson Chey Tae-won (center), who also serves as the chairperson of the Korean Chamber of Commerce and Industry, speaks at the Nikkei Forum in Tokyo, Japan, on May 23, 2024, alongside Suntory CEO Takeshi Niinami (right) on the topic of “going beyond partnership” between South Korea and Japan. (still from Nikkei Forum livestream) 

“Economic cooperation between Korea and Japan is no longer a choice, it’s a necessity.” — Chey Tae-won, chairman of the SK Group 

“If Korea and Japan cooperate, they can become the driving force for the future of Asia.” — Takeshi Niinami, CEO of Suntory Holdings 

Some of the top business leaders from Korea and Japan described this as a time when the two countries need economic cooperation and called for proactive steps in that direction. 

Chey, who is also the chairman of the Korea Chamber of Commerce and Industry, attended the Nikkei Forum in Tokyo on Thursday afternoon for a talk on the topic of “going beyond partnership” between Korea and Japan with Niinami, who is head of the Japan Association of Corporate Executives, an important Japanese business group. 

Chey spoke in detail on Thursday about why Korea-Japan economic cooperation is necessary and about what steps should be taken first. 

“There’s an urgent need for cooperation between Korea and Japan,” Chey said, noting that Korea and Japan are both stuck in the low-growth trap, that the free trade model is struggling despite the importance of exports to both countries, and that there are serious energy issues that are directly linked to the environment. 

“If we keep this up, both Korea and Japan will see their global prestige decline, and there are even concerns about their economic viability,” Chey underlined while mentioning the low birth rates that are currently an issue for both countries. 

Chey contended that Korea and Japan ought to move toward an economic cooperative structure modeled on the European single market. Building a bigger market and strengthening cooperation would pay considerable dividends, the SK chairman said, and could also bring hope to future generations. 

SK Group Chairperson Chey Tae-won (left), who also serves as the chairperson of the Korean Chamber of Commerce and Industry, takes part in the Nikkei Forum in Tokyo, Japan, on May 23, 2024, alongside Suntory CEO Takeshi Niinami (right) on the topic of “going beyond partnership” between South Korea and Japan. (still from Nikkei Forum livestream) 
SK Group Chairperson Chey Tae-won (left), who also serves as the chairperson of the Korean Chamber of Commerce and Industry, takes part in the Nikkei Forum in Tokyo, Japan, on May 23, 2024, alongside Suntory CEO Takeshi Niinami (right) on the topic of “going beyond partnership” between South Korea and Japan. (still from Nikkei Forum livestream) 

“Separately, the Korean and Japanese markets don’t make up large economic zones. But combined, those markets would represent a GDP of more than US$6 trillion and include around 200 million high-income earners, making US$30,000 a year. That would have the potential to create future growth,” Chey said. 

“How long are we going to follow the rules set by other countries for our own economic security? Korea and Japan need to build their own market and make their own rules,” Chey urged. 

Chey said that Korea joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and reaching a free trade agreement with Japan would help build that market, but predicted that neither step may be feasible right away. “Such steps require not only an agreement between our two countries, but also the ratification of our legislatures, so they take a substantial amount of time. Pulling them off wouldn’t be easy without a foundation of trust between our two countries,” he said. 

Chey also suggested that much progress could be achieved through cooperation in the corporate sector and other areas of the private sector in the two countries. He said the two countries should make joint purchases of liquefied natural gas (LNG) to cut costs and should collaborate on developing supplies of clean energy, such as hydrogen and ammonia. 

His other proposals for collaboration between the two countries include building startup infrastructure to offset the dominance of Silicon Valley in the US and taking advantage of societal aging — a chronic social issue in both countries — by experimenting with new kinds of “silver” businesses. 

Niinami expressed support for Chey’s concrete proposals. 

“We should take advantage of the crises mentioned by Chey, including the challenges with free trade, to expand the Asian economic zone. If we work together, Korea and Japan can bring about development in the Asian economy,” the Japanese tycoon said. 

Niinami also emphasized that economic cooperation between Korea and Japan would have benefits for both Koreans and Japanese. 

“I’ve never seen countries where so many young people like to cross the border as in Korea and Japan. Our societies are also facing similar challenges, including societal aging, population decline and energy issues. If we work together on those challenges, it will be very beneficial for people in both our countries,” he said. 

By Kim So-youn, Tokyo correspondent 

Please direct questions or comments to [english@hani.co.kr

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