Since late last year, East Asia has been uneasy with wariness over the growing tensions between South Korea and Japan. Though, historical legacies and war memories of Imperial Japan continue to emerge as recurrent factors in the regional politics, they have not interfered with its economic or security interfaces. The region has come a long way since the end of World War II, and emerged as world’s de-facto largest economic bloc without formal economic integration. In fact, the cross-border production networks that cut across East Asia have been driven more by the private sector than by the governments. Further, countries have sought to strengthen the unhindered peace guaranteed by the US military presence in the region. All this has ensured that governments restrain the volatile history from disrupting the peace and prosperity of the region. Thus, the breakdown of an important military pact between Japan and South Korea raises questions as to how the ‘past’ took precedence over the ‘future’.

Revival of Historical Legacies

Japan colonized the Korean Peninsula from 1910 to 1945. During the 35 years of Imperial Japanese rule, Japanese policies marginalized Korean history and culture and forced Koreans into repressive labor and sexual slavery. Relations were normalized after almost two decades, following a round of seven bilateral talks held from October 1951 to June 1965. The Treaty on Basic Relations between Japan and the Republic of Korea was signed on June 22, 1965, reestablishing basic diplomatic relations between the two countries. The treaty also addressed the settlement of war reparations that were to be provided by Japan. Japan provided South Korea $800 million (almost a quarter of South Korea’s GDP at the time) – spread out as $300 million in economic grants, $200 million in low-interest and long term loans and another $300 million in loans for private trust¹.

Japan and South Korea, despite their dark history, today have extensive economic engagement ($85 billion in bilateral trade) and share many commonalities of democratic values, common security goals and close alliance with the United States. Since the end of World War II, Japan has shed its military and hegemonic ambitions, and become a peaceful nation, occupying its place in the comity of nations. Over the 74 years, it has atoned for its actions and paved the way for regional development. Yet, the complex threads of history remain entangled, with due grievances that can’t be healed by time. In East Asia, history has been the primary raw material for construction of a distinct nationality, as the collective memory of the past serves to bind a group more strongly. Thus, Japan’s wartime conduct and its legacy still manifests time and over. They have arisen more strongly after South Korea transitioned fully in 1993, from authoritarian rule to a civilian government that was more responsive to latent public grievances against Japan.

Many Koreans believe that the 1965 treaty reached under the autocratic Park Chung Hee regime is invalid, due to the fact that the funds that were supposed to be used to compensate victims directly, were instead spent as capital investment into the South Korean economy. Another concern is that the treaty was reached during a time when South Korea was still undergoing an economic recovery that left it with less bargaining power than Japan. Furthermore, debates remain whether the funds provided by the treaty were compensation for Japan's wartime aggression, or a goodwill gesture to reestablish relations. In fact, up until the mid-2000s, South Korean courts refrained from granting reparations to victims of forced labor and other wartime grievances under the provisions of the 1965 Agreement. The major shift came under the Roh Moo-hyun administration, during which Roh authorized the release of thousands of documents leading up to the 1965 agreement².

These documents gave South Koreans context and information that they had previously been in the dark about. Additionally, South Korea established a Joint Private-Government Committee on Measures Pursuant to the Publication of Documents on South Korea-Japan Talks in 2005, to ascertain the validity of Japan’s assertion that all wartime disputes had been settled. The committee found that although some cases of forced labor were settled under the provisions, the same could not be said about issues concerning Korean “comfort women” who were forced into sexual slavery, atomic-bomb victims, and the forced mobilization of Koreans to Sakhalin. The committee’s conclusion led to a landmark decision by the Constitutional Court of South Korea in 2015 that Seoul’s passiveness in settling the dispute on behalf of victims was unconstitutional. Japan, meanwhile, has been frustrated with a demand for apologies and reparations that it sees as insatiable. The official policy of Japanese governments has been that, in regard to war-time property issues and individual claims for compensation, such issues were settled, completely and finally, by the 1965 agreement.

The 1965 Treaty Article II:

‘The High Contracting Parties confirm that the problems concerning property, rights, and interests of the two High Contracting Parties and their peoples (including juridical persons) and the claims between the High Contracting Parties and between their peoples, including those stipulated in Article IV (a) of the Peace Treaty with Japan signed at the city of San Francisco on September 8, 1951, have been settled completely and finally’.

In 2015, after great public furor, Japan and South Korea came to an agreement over the issue of Japan’s wartime sexual slavery of Korean women that involved Japan apologizing and agreeing to set up a 1 billion yen fund. Fumio Kishida, Japan’s foreign minister at the time, in his joint statement condemned Japan’s wartime actions as a “grave affront to the honor and dignity of large numbers of women”. The deal remained publicly unpopular in South Korea, as the wording of the deal did not explicitly state that the "comfort women" will receive direct compensation, but that the fund will provide "support" and bankroll "projects for recovering the honor and dignity and healing the psychological wounds". When surviving comfort women criticized the apology, the Japanese government refused to further negotiate and take additional reconciliatory measures. They believed that the issue was “irreversibly resolved”³.

Recent Escalation of Tensions

In October and November 2018, the South Korean Supreme Court ordered Japanese companies - Nippon Steel & Sumitomo Metal and Mitsubishi Heavy Industries respectively -to pay reparations to Korean forced laborers who were made to work for Japan during World War II. Due to further appeals and Japanese companies’ unwillingness to pay damages, later court decisions in early 2019 ruled that victims had a right to seize and liquidate the offending companies’ assets in South Korea, sparking outrage from Japan. The tensions escalated to serious proportions in July this year, when Japan imposed export controls on Seoul for three chemicals (fluorinated polyimides, photoresists and hydrogen fluoride), crucial to semi-conductors and displays that are key components of the South Korean electronics industry. In Japan three companies (JSR Corporation, Showa Denko, and Shin-Etsu Chemical) as well as Kanto Denka Kogyo, produce 90 per cent of the world's fluorinated polyimide and photoresist, both of which are used for LCD and OLED displays, and 70 per cent of hydrogen fluoride, used to make LSI, DRAM and NAND flash memory⁴.

According to data from Korea International Trade Association, South Korea imports 93.7 per cent of fluorinated polyimide, 91.9 per cent of photoresists, and 43.9 per cent of hydrogen fluoride from Japan⁵. On August 2, Tokyo further removed South Korea from its ‘white-list’ of trading partners, ending both preferential treatment and eased trade restrictions with Japan. Seoul also responded to the alleged trade war by Japan, slashing Japan from its own preferred trading list and placing the nation in a newly-formulated ‘third category’ trade status. It walked out of the General Security Military Information Agreement, GSOMIA, a military information-sharing pact between Japan and South Korea (inked in November 2016) on August 23rd that would have been renewed automatically the very next day.

GSOMIA

GSOMIA has aided the smooth functioning of the missile defense system in Korea and Japan. Additionally, Japan’s radar and satellite capabilities augment South Korea’s ability of real-time tracking of North Korean missile launches. GSOMIA does not oblige either party (Japan or South Korea) to share intelligence; it simply provides the channels and mechanisms to share if either side chooses to do so. The United States, South Korea, and Japan are all party to the Trilateral Information-Sharing Agreement (TISA). However, the TISA covers a narrower range of information than GSOMIA and requires the South Korea and Japan to use the United States as an intermediary for intelligence sharing that could create costly time lags in a situation of urgency.

Did South Korea Overreact?

Three days after the announcement of export controls by Japan, Lee Jae-yong, Samsung's vice chairman, visited Japan on July 7, hoping to receive assurances that supplies would continue to flow unabated. But when he returned to Seoul, Samsung sent a letter to local vendors asking them to stockpile three months' worth of the Japanese chemicals. Meanwhile, South Korean companies are scrambling to find other sources of the materials. A senior Samsung official stated that "It is one of the worst situations we have ever had. Politicians take no responsibility for the mess, even though it has almost killed us⁶."

While Tokyo downgraded South Korea’s status from Group A (formerly ‘white’) to Group B, Taiwan which is in Group C to which even stricter rules apply, sees fewer disruption of exports from Japan. Infact, many analysts have put forth that Japanese government's swift approval on August 8 of the first shipment of resist to South Korea under the new export rules diluted the reasoning of withdrawing from GSOMIA. On the other hand, President Moon has also been suspected of using anti-Japan sentiment for maintaining his declining public support and concealing a scandal involving Cho Kuk, nominated by him as a candidate for justice minister. Many South Korean analysts also view withdrawal from GSOMIA as not helping South Korea improve its relations with North Korea. They don’t see Japan appearing a leverage factor in current inter-Korean relations. Instead, it could create a wedge between the US and South Korea for North Korea to exploit. Pyongyang can be expected to be more overbearing sensing Seoul’s diplomatic isolation. It could ask for South Korea to downgrade its security alliance with the US as the condition for restarting inter-Korean dialogue⁷.

Further, in Japan, there has been a growing sentiment that future generations should not have to pay for the sins of their ancestors. In 2015, in a televised address a day before, the 70th anniversary of Japan’s defeat on 15 August 1945, Abe expressed “profound grief” for all who died in the Second World War. He further mentioned that “we have engraved in our hearts the histories of suffering of the people in Asia as our neighbors.” But he added, “We must not let our children, grandchildren, and even further generations to come, who have nothing to do with the war, be predestined to apologize. Even so, we Japanese, across generations, must squarely face history. We have a responsibility to inherit the past, in all humbleness, and pass it on to the future⁸.”

Concurrently, Japan has serious apprehensions arise that the recent South Korean court verdicts could open up the floodgates for other victims and their relatives, totaling more than 220,000 individuals who could potentially file lawsuits against more Japanese companies. The reparation cost could swell to $20 billion or more. Further, as South Korea’s highest court ruled to disregard an international treaty, many other countries could follow suit with similar cases that were occupied by Japan, such as China and the Philippines⁹.

Reaction from the US

Despite the perception that GSOMIA is a bilateral agreement between Seoul and Tokyo, the US is a major stakeholder, and the decision to terminate the agreement essentially destroys the US’s investment in security architecture in Northeast Asia. One line of analysis speculates that Moon’s intention behind terminating the agreement was he calculated that by threatening to quit the nascent trilateral security cooperation in Northeast Asia, the US would act more proactively and pressurize Japan to reverse its export control measures against South Korea. However, many other analysts view the withdrawal as slighting the US (more than Japan), reinforcing a dangerous precedent that security cooperation — an area once fairly insulated from politics and treated more pragmatically — can be held hostage to historical tensions.

There have also been mounting pressures between South Korea and the US with regard to the Special Measures Agreement (SMA) that outlines South Korea’s contributions to the non-personnel costs of hosting the US military. It has been updated every five years since 1991 to ensure Seoul shares about half of the burden. In 2018, South Korea paid around 960 billion won ($860 million) for the 28,500 American troops stationed there, which US Forces Korea (USFK) claimed only amounted to about 41 per cent of the non-personnel costs. However, rather than asking Seoul to again meet them halfway in a renewed deal, the White House is reportedly asking for a 150 to 200 per cent increase. Washington is also reportedly looking to renegotiate the agreement every year¹⁰.

It is no surprise that the United States has issued strong statements after South Korea’s withdrawal from GSOMIA. “Very disappointed” were the words of US Secretary of Defense Mark Esper in a rare public rebuke of Seoul. “We were not forewarned,” added Randall Schriver, the Assistant Secretary of Defense for Indo-Pacific security affairs. He also noted that "When you are looking at challenges ranging from ballistic missiles to cyber and space, all these things, we are much better off when we are removing obstacles and facilitating the exchange of information, not making it more difficult”. He called upon both countries to participate in a meaningful dialogue to address their differences and encouraged South Korea to recommit to GSOMIA. South Korean Prime Minister Lee Nak-yon has said it's possible for his nation to reenter the GSOMIA¹¹.

Endnotes:

1. https://treaties.un.org/doc/Publication/UNTS/Volume%20583/volume-583-I-8471-English.pdf

2. National Interest: A Japan-South Korea Dispute Hundreds of Years in the Making, Aug 26, 2019, https://nationalinterest.org/blog/korea-watch/japan-south-korea-dispute-hundreds-years-making-76241
3. Announcement by Foreign Ministers of Japan and the Republic of Korea at the Joint Press Occasion, https://www.mofa.go.jp/a_o/na/kr/page4e_000364.html
4. Supply of DRAM, NAND & Displays Could Be Disrupted by Japan & South Korea Dispute, July 05, 2019, https://www.anandtech.com/show/14614/supply-of-dram-nand-and-displays-could-be-disrupted-by-japan-and-south-korea-dispute
5. Wikipedia: 2019 Japan–South Korea trade dispute, https://en.wikipedia.org/wiki/2019_Japan%E2%80%93South_Korea_trade_dispute
6. Nikkei Asian Review: Inside the lose-lose trade fight between Japan and South Korea, July 31, 2019, https://asia.nikkei.com/Spotlight/Cover-Story/Inside-the-lose-lose-trade-fight-between-Japan-and-South-Korea
7. Experts weigh in on the impact of the ROK decision to end an intelligence-sharing deal with Tokyo, Aug 23, 2019, https://www.nknews.org/2019/08/what-south-koreas-termination-of-the-gsomia-means-for-north-korea-policy/
8. New York Times: Statement by Prime Minister Shinzo Abe of Japan, Aug 14, 2015, https://www.nytimes.com/2015/08/15/world/asia/full-text-shinzo-abe-statement-japan-ww2-anniversary.html
9. Ibid, No. 2.
10. The Diplomat: The US-South Korea Military Cost-Sharing Agreement Has Expired. Now What?, Jan 04, 2019, https://thediplomat.com/2019/01/the-us-south-korea-military-cost-sharing-agreement-has-expired-now-what/
11. US Department of Defense: Disputes Between U.S. Allies Hinder Indo-Pacific Security Cooperation, Aug 28, 2019, https://www.defense.gov/explore/story/Article/1946959/disputes-between-us-allies-hinder-indo-pacific-security-cooperation/

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