Editorial: Revoking S. Korea's preferential trade status raises fears of a spiral in ties

The Cabinet of Prime Minister Shinzo Abe has decided to revoke South Korea's preferential status as a trade partner for export of goods that can be converted for military use. It is an unprecedented move.

It comes after Tokyo enforced restrictions on exports of three items including semiconductor materials. However, this latest development is particularly serious because it could represent a historic crossroads in Japan-South Korean relations. The move could exacerbate into a conflict between the two countries that is far more serious than past frictions.

One of the reasons is that Japan has drastically expanded the scope of items that could be subject to export restrictions. Those newly covered include machine tools such as equipment to produce semiconductors, which are core products made by South Korean firms. It could deal a serious blow to South Korea, which has already been hit by restrictions on semiconductor materials.

Carbon fiber and lithium ion batteries could be subject to restrictions too, adversely affecting the car industry, South Korea's second largest sector. Communications equipment and electronic parts are included in items covered by the restrictions, and there are concerns that diverse industrial sectors could be affected by the latest move.

This could shake the separation of politics and the economy, a key principle in Japan-South Korea relations.

Japan and South Korea are important trade partners. Even when their political relations deteriorated over historical perceptions and other issues, close ties between Japanese and South Korean companies have prevented overall relations from worsening further.

The South Korean economy, which achieved rapid growth, is a source of the country's self-confidence. Japan's latest move has stirred bitter protests from South Korean society because it hits its economy hard. Campaigns to boycott Japanese goods have already started; it is feared they will spur anti-Japan sentiment further.

Secondly, the move could destabilize the security environment in East Asia. Tokyo's revocation of Seoul's preferential status as a trade partner for exports is tantamount to regarding South Korea as untrustworthy in terms of security and an unfriendly country to Japan.

South Korean Foreign Minister Kang Kyung-wha has hinted at the possibility of scrapping the Japan-South Korea General Security of Military Information Agreement, with the deadline for renewing the accord coming in late August. If cooperation between Japan and South Korea is impeded, it would only benefit North Korea and others.

The latest series of Pyongyang's short-range ballistic missile firings is apparently not unrelated to the conflict between Tokyo and Seoul. Some observers say that the Russian military aircraft that flew jointly with Chinese military aircraft and entered Japan's airspace above the Takeshima Islands in Shimane Prefecture, also claimed by South Korea, did so to unsettle Japan by taking advantage of the conflict between Tokyo and Seoul.

What is troubling is that both sides have fallen into a negative spiral of blaming each other, apparently while keeping domestic sentiment in mind.

The United States attempted to mediate between Japan and South Korea, but Tokyo decided to revoke South Korea's preferential status before Japan-U.S.-South Korea foreign ministerial talks.

After the decision, Economy, Trade and Industry Minister Hiroshige Seko released details of public comments regarding Japan's move. Seko said the government gathered opinions from some 40,000 people, and that 95% of them were in favor of the move. The trade minister said the government decided to revoke South Korea's status with the surveyed results in mind.

After the decision, South Korean President Moon Jae-in bitterly criticized Japan. In the past, Prime Minister Abe has criticized South Korea for not keeping its promises with other countries.

It is the role of both governments to calmly evaluate public opinion in making policies. It is highly risky to instigate nationalism.

Bilateral relations have soured so badly because of both countries' responses to the issue of compensation for South Korean people who were forced to work for Japanese companies during World War II.

South Korea had taken the position that the matter was settled under a 1965 agreement on the issue. However, following the South Korean Supreme Court's rulings last year ordering Japanese companies to pay compensation to former forced workers, Seoul proposed that Japanese companies concerned should extend financial contributions for a settlement.

The South Korean government has not complied with Japan's request for appointing arbitration panel members under the agreement, a practice Tokyo views as constituting a violation of international law.

Tokyo went ahead with export restrictions, effectively in retaliation for the issue of compensation for former forced workers. Trade minister Seko commented that Seoul's response badly damaged mutual trust.

However, it is unreasonable to resort to trade procedures that are irrelevant to the forced labor issue. While Japan denies that, the international community views Japan's move as a use of trade for political purposes.

What is necessary is for both the Japanese and South Korean governments to make compromises from a broad perspective.

Japan and South Korea normalized their diplomatic relations in 1965 during the Cold War between the United States and the Soviet Union. Despite a gap in historical perceptions, the two countries maintained their cooperative relationship as fellow members of the Western bloc.

The power structure within East Asia has changed since the end of the Cold War. South Korea has strengthened its relations with China, which has emerged as a major power. Border disputes have also heightened nationalist sentiment.

Still, the importance of the roles Japan and South Korea should play in maintaining order in East Asia remains unchanged. Tokyo and Seoul need to closely cooperate in denuclearizing North Korea. Collaboration between Japan and South Korea in efforts to help stabilize East Asia will contribute to common benefits for both countries.

Friction over historical perceptions and other sticking issues will not easily be resolved. What is important is for both governments to take adequate crisis management measures if friction arises, to prevent it from adversely affecting bilateral economic ties and private-sector exchanges.

The two countries cannot conduct diplomacy if they just blame each other without any prospect of settlement. The Japanese and South Korean leaders should face each other with sincerity to settle any dispute.