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US Expands Mediating Role in South Korea-Japan Dispute

Protesters stage a rally denouncing the Japanese government's decision on their exports to South Korea in Seoul, July 17, 2019.
Protesters stage a rally denouncing the Japanese government's decision on their exports to South Korea in Seoul, July 17, 2019.

The crisis erupted earlier this month when Japan restricted exports of high-tech materials to South Korea.

As a trade dispute rooted in historical tensions spirals toward a full-blown trade war between Japan and South Korea, there are signs the United States is starting to take a bigger mediating role.

The top U.S. diplomat for East Asia, who visited Japan earlier this week, met Wednesday with top South Korean officials in Seoul, where he urged a quick resolution to the dispute.

“The U.S., as close friends and allies to both, will do what it can to support their efforts to resolve [the situation],” said David Stillwell, the new U.S. assistant secretary of state for East Asian and Pacific affairs.

The crisis erupted earlier this month when Japan restricted exports of high-tech materials to South Korea. The materials are used to produce semiconductors and displays in smartphones and other electronics that are key to South Korea’s export-driven economy.

In restricting the materials, Tokyo cited national security reasons. But the move is widely seen as retaliation for recent South Korean court rulings ordering Japanese companies to compensate Koreans who were forced to work during Japan’s colonial occupation of Korea.

The U.S. is traditionally reluctant to become too involved in issues related to contentious historical disputes between South Korea and Japan, which are both key allies of Washington. The Trump administration has especially taken a hands-off approach during the current round of tensions.

Speaking in Japan last week, Stillwell told Japanese broadcaster NHK he doesn’t “plan to mediate or engage, other than to encourage both sides to focus on the key issues in the region, especially with North Korea.”

Wide-ranging effects

Since then, the situation has only worsened.

South Korean President Moon Jae-in told South Korean companies to prepare for a prolonged dispute and that the “framework of economic cooperation” between Seoul and Tokyo has been broken.

Japan is also considering removing South Korea from its “white list” of trusted trade partners - a serious escalation that would make it harder for the two countries to trade a wide range of technologies.

A trade war between Japan and South Korea, the world’s third and 11th largest economies respectively, would have wide-ranging ramifications.

It could threaten global technology supply chains, since South Korea produces 70 percent of the world’s memory chips. It could also further slow global growth already hampered by U.S.-China trade tensions.

U.S. interests in Asia could also be hurt if Japan, South Korea, and the United States are not able to work together to counter challengers like North Korea and China.

Expanded U.S. mediation?

To help resolve the dispute, Matt Pottinger, senior director for Asian affairs on the White House National Security Council, is headed to South Korea and Japan, according to one report.

Speaking Wednesday after meeting with Assistant Secretary Stillwell, South Korean Foreign Minister Kang Kyung-wha welcomed U.S. mediation.

“It certainly helps to have an interlocutor who can really play a role of a bridge and communication channels between the two sides,” said Kang.

A senior South Korean official said he warned Stillwell the dispute could impact “trilateral cooperation” between South Korea, Japan, and the United States, especially if Japan removes South Korea from its “white list.”

“That would be a very, very significant act,” the South Korean official told foreign media, speaking on condition of anonymity. “If that happens, it will cause a tremendous amount of problems and it would definitely put a strain on Korea, Japan, U.S. trilateral cooperation.”

The official added that South Korea believes it can resolve the dispute through “constructive dialogue with Japan.”

In the past, the U.S. has attempted to mediate disputes between South Korea and Japan.

During a period of tensions in 2014, U.S. President Barack Obama helped bring together Japanese Prime Minister Shinzo Abe and then-South Korean President Park Geun-hye for their first face-to-face talks.

But this time around, some analysts say the United States does not appear as invested in helping resolve the dispute, pointing out U.S. President Donald Trump’s longstanding trade criticisms of both Japan and South Korea.

“The Trump people think that both Japan and Korea are security free-riders. Trump picks fights with both of them on trade,” says Robert Kelly, professor of political science at South Korea’s Pusan National University.

Longstanding tensions

The trade dispute is the latest flare-up in tensions rooted in Japan’s brutal 1910-1945 occupation of the Korean peninsula. A major source of friction is how to compensate those forced into labor and sexual slavery in the colonial era.

Japan says the reparations issue was resolved with a 1965 treaty that normalized Japan-South Korea relations. Japan has complained that subsequent South Korean governments have not accepted further Japanese apologies and attempts to make amends.

The issue re-emerged last year after South Korea’s Supreme Court ordered Japanese companies, including Mitsubishi Heavy, to compensate Korean forced labor victims. The companies have not complied with the rulings, leading some victims to begin the legal process to seize or liquidate the companies’ assets in Korea.

Japan says the rulings are unacceptable. But South Korea says it cannot overturn them, saying that doing so would amount to interference in South Korea’s independent court system.

Japan maintains that national security concerns, not the South Korean court rulings, are the impetus for its export restrictions. But while announcing the measures, Japanese officials mentioned how the forced labor issue had broken trust with Seoul.

Domestic support

Analysts say both Korean and Japanese leaders are using the issue to drum up domestic support.

Japan on Sunday holds an Upper House election. Since the flare-up of tensions with South Korea, some polls have suggested Prime Minister Abe's ruling Liberal Democratic Party has extended its lead over opposition parties.

Popular opinion in South Korea also appears to give President Moon little reason for backing down. According to a poll released last week by Gallup Korea, 67 percent of South Koreans would support a boycott against Japan.

“I think a boycott would be positive,” said Kin Seon-hwa, a 33-year-old office worker in Seoul. “I sometimes drink Japanese brand beer, like Asahi, but right now there’s no reason to have that brand.”

“Right now, though, I would not travel to Japan,” said Hwang Gwang-hyun, a 29-year-old who also works in Seoul.