With apparent reasons to clash numerous and ambitions to stop few, it is important the governments in Tokyo and Seoul weigh their options in their ongoing trade dispute for the coming year. The Tokyo Summer Olympics 2020 offer an opportunity for both parties to refresh relations and re-establish their trust and friendship by engaging on a unique platform for dialogue.
Many point the beginning in recent tensions between Japan and South Korea to October 2018. Back then, South Korea’s Supreme Court issued a landmark ruling stating that Nippon Steel & Sumitomo Metal must compensate four South Korean citizens who fell victim to forced labour in its factories during Japan’s occupation of Korea in World War II. A month later, a similar order was presented to Mitsubishi Heavy Industries. These rulings are a product of South Korea and Japan’s trouble finding closure with their joint past because of different historic interpretations on either side. Japan’s subsequent reaction to the rulings of disbelief and refusal ushered in a trade dispute that has become dangerous for both countries‘ economies and derailed political relations.
The main bone of contention is the heavy export restriction Japan imposed in July 2019 on chemicals vital to South Korea’s semiconductor industry, the largest in the world, needed to build smartphones; Japan’s government vaguely cited South Korea’s export policy as reasoning. The impacts on the South Korean economy, where the electronics industry makes up a sizeable chunk of the GDP, were remarkable. Many financial analysts revalued their predictions for South Korea’s economic growth in 2019 from 2.5 to 2 percent or below. Predictions for 2020 are also fairly bleak, roughly 2.2 percent, and the IMF stresses that many Asian economies will suffer due to the dispute.
Similarly, Japanese businesses have been boycotted by South Koreans and watched revenue plummet. The popular retail brand Uniqlo recorded a 40 percent fall in sales last August, and car manufacturers Honda and Nissan recorded 80.9 and 87.4 percent fall in number of cars sold respectively compared to the same month the previous year. In 2019, the number of South Korean tourists visiting Japan, who invest more than USD 5 billion annually in its economy, dropped by 25.9 percent compared to 2018.
With regard to the near future, it is key that both parties reassess their priorities and strive to de-escalate tensions and Japan, initiator of the trade row, reconsiders its aims. If the ban were lifted, markets on both sides would return to normal and restore calm in the regional economy. South Korea’s semiconductor industry, struggling to replace the vital chemicals, could recover. This would give both governments the necessary breathing space that could help solve the forced labour compensation issue, with no obstacles preventing discourse between them. Bonus points can be scored for Japan by reinstating South Korea on its export «white list», after having ousted it last August, which gives specific nations preferential treatment with regard to export regulations. But, even then, relations between Tokyo and Seoul would only be back to square one.
An ideal opportunity for improving cooperation arises from the Tokyo 2020 Summer Olympics, which are just around the corner. The preparations for this event could prove essential to saving (and furthering) the partnership between Japan and South Korea. Both countries, wishing not to embarrass themselves in front of an international crowd condemning the dispute at such a critical event, could strive to end tensions.
First, the aforementioned reparations, including the compensation of victims by the Japanese companies, must be executed in order to restore mutual trust between the two nations. Second, Japan must show signs of reducing its hostile attitude toward South Korea. Decreasing this can be achieved by, for instance, proposing greater military cooperation or even more tight-knit trade relations, which should, given Russia and China’s hazardous behaviour toward them, be in both countries‘ interest. Controversial remarks by Japanese officials regarding war crimes that frequently make news headlines should also be spared. In turn, South Korea can also show willingness to cooperate by refraining from frequently requesting apologies from Japan for its past mistakes, often triggering the adverse effect. Seoul could also offer to play a mediating role between Pyongyang and Tokyo, who clash frequently, which would improve its ties to both countries.
To conclude, none of these suggestions must be finalised before the Games arrive, however already announcing such measures this spring could have significant consequences. As pointed out above, options for ameliorating relations are numerous. Emotions, which have plagued relations in the past decades, must be replaced by rational thinking and a troubled past shall give leeway to a prosperous future. The Olympics, a competition uniting the world, can act as the long-needed variety in everyday interaction between the two countries and both can opt for creative and innovative approaches to ending their persisting and troublesome aversion.