Ghosts of the Second World War: Japan- South Korea Trade Dispute and Alliance Politics in the Indo- Pacific

Sweta Kumari
August 11, 2019


Image Coursey: Maunews Online

In international relations, the memories of historical animosity seldom fade away, and they keep coming up in the garb of political, military, or economic disputes between the states. Such is the case of Japan-South Korea relations. The atrocities by Japan on South Korea during the Second World War still determine the relations between these two countries in the Indo-Pacific region. It is quite unique how the two neighbors, despite having enormous economic interdependence, engage themselves in conflicts tracing the past. In a recent trade face-off, Japan has restricted high-tech exports to South Korea. Now, the South Korean companies would require a license from the Japanese government to get three key elements–fluorinated polyamides, photoresists, and hydrogen fluoride– crucial for making memory chips and smartphones. While Japan has cited ‘national security concerns’ behind this decision saying that South Korea is not managing the end use of these products properly and that can be used for military applications as well, South Korea has utterly denied the allegations.

The actual reason behind this measure by Japan is being perceived as its reaction to the recent rulings made by the South Korean Supreme Court which has given its citizens the right to sue a Japanese firm for reparations for forced labor during the World War period. Similar decisions were made against two other firms in 2018. In fact, South Korea has confiscated some assets of these companies. Looking into the past, from 1910 to 1945, the Korean Peninsula was a colony of Japan and during the war period. People of Korea had been subjugated as forced labor in the Japanese firms and as “comfort women” to serve the Japanese army. After the Second World War, in 1965, both the countries signed the Treaty on Basic Relations between Japan and the Republic of Korea to normalize the relations. Under this treaty, the Japanese government provided reparations worth 300 million dollars for the victims of the atrocities of War to the South Korean government, and diplomatic relations were established. The alliance with the US became another important factor that brought them closer.

Despite all these, there has been persistent dissatisfaction in the Korean side claiming that reparations were made on a government to government basis, but the Japanese private companies managed not to pay reparations to the South Korean forced laborers. This issue has erupted time and again and overshadowed the bilateral ties.

 The current export regulation by Japan aims to directly hit South Korean tech giants such as Samsung and SK Hynix, which are the biggest consumers of DRAM (Dynamic Random Access Memory) in the world. An obstruction in the supply chain can create a manufacturing logjam that can severely affect the global tech industry. Samsung recently reached out to the Japanese authorities and has been able to secure an emergency stock of these elements. However, speculations are being made that these companies will be able to manage the production only for a few months with this reserve stock. South Korea has also started to retaliate by boycotting Japanese goods. The predictions are that if the situation persists, it will not only have a negative impact on bilateral trade but also will hit the global market for smartphones, including American firms like Apple and Dell. Recognizing the gravity of the situation, the United States has come forward to resolve the issue. US adviser John Bolton visited both Japan and South Korea to ease the tensions between its two crucial allies.

All these developments represent the changing dynamics of the alliance system in the Indo- Pacific region. The US alliance with Japan and South Korea has determined its supremacy in the region since the Cold War period. Today, China and the US are already in a trade war. With Japan and South Korea, entering into another one can adversely affect the whole structure of the alliance system. The common hostility towards Chinese assertiveness is one of the few reasons that bring these two countries on the same page. However, on a different note, the common past where both China and South Korea suffered in the hands of Japan during World War draws these two closer. North Korea, which also shares the same past, has already been trying to improve its relations with its southern counterpart. In such a situation, if the economic ties are thwarted, then Japan and South Korea can move forward in two very different ( if not opposite) directions. Japan may seek help from the International Court of Justice for arbitration on the reparation issue while South Korea can rush to the WTO to resolve the export regulation issue. It will be crucial for the US to actively engage in resolving the matter before it deteriorates beyond repair which can pose a serious challenge to the stakes of the United States in the region and usher in a new chapter of alliances and partnerships in the Indo- Pacific.

*** The author is a PhD scholar at the Centre for Canadian, US & Latin American Studies, School of International Studies, Jawaharlal Nehru University ***