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Shrimp vs. Whale: South Korea’s Response to Japan’s Trade Restrictions

Throughout history, animosity has been a key feature of the Japan-Korea relationship, and historical scars still have a massive influence on the political relationship to this day. It is no wonder then, that the two countries are locked in a tit-for-tat dispute over Japanese aggressions during World War 2. This time, however, the dispute has galvanized the South Korean government and public in opposition of new trade regulations, complicating the path forward for a diplomatic solution.

Mass protest in Gwanghwamun Square. Photo courtesy of Teddy Cross, ©2016

On July 1, Japan announced it was levying trade restrictions on chemicals used to make semi-conductors and flat-screens headed to South Korea based on security concerns over the military applications of the chemicals. The Japanese Ministry of Economy, Trade, and Industry said “the Japanese-ROK relationship of trust including in the field of export control and regulation has been greatly undermined.” The statement continued to outline possible further actions the Japanese government can take, including further trade restrictions and removing South Korea from the “White Sheet” of countries given preferential trading status with Japan to assuage its security concerns.

The South Korean government has pushed back against the rational for the restrictions. South Korean President Moon Jae-in, in strong terms, denounced the trade restrictions as a unilateral action and called for Japan to return to the negotiating table before it’s too late. South Korean Minister of Foreign Affairs Kang Kyung-wha, in a telephone call with her Japanese counterpart on July 26, strongly pushed for Japan to withdraw the regulations and urged Tokyo not take further steps to exacerbate the issue. Despite a strong push from South Korea for a solution, bilateral interactions have led to few breakthroughs.

South Korea is also turning to international organizations for support. At the General Council Meeting of the World Trade Organization, South Korea’s representative Paik Ji-ah sought to gain international support against the new restrictions. However, after a rebuttal from Japan, no other country spoke for either side. The United States has been timid in picking a side in the dispute, instead choosing to focus on the benefits of the trilateral alliance. Though South Korea is trying to drum up international support, its efforts have yet to yield results.

But it is not in government circles where the trade spat has had the greatest effect. In South Korea, the “Boycott Japan” movement is growing in popularity. A recent poll showed that 62.8% of South Koreans expressed a desire to boycott Japanese products. One of the biggest hit markets has been travel. T’Way Air, a South Korean airline, has seen tickets sales drop more than 90%, according to a recent Data Som survey. Another South Korean airline, Jeju Air, also reported a 67% decrease in ticket sales to Japan. Neildong, a South Korean community focused on travel to Japan with 1.33 million members, announced it would be temporarily shutting down its website during the dispute.

The Boycott Japan Movement, however, goes way deeper than travel. In the same Data Som survey, Lotte Shopping, 7-11 Korea, along with other several other major shopping chains have noted massive drops in sales of Japanese products. Some stores have even pulled Japanese products from their shelves. Major retailers, such as Kyobo Bookstore, are assisting the movement by making it easier to tell which items in its store are made in Korea. A website called “NoNo Japan” lists Korean alternatives to Japanese companies for cars, food, stationary, lifestyle products, and beauty products. UNIQLO, a major Japanese fashion brand, has noted a severe drop in sales and has expressed worry about how long the dispute may last. Some have even called for a boycott of the 2020 Tokyo Olympics.

The South Korean response to these new regulations has been emotional, yet understandable. By regulating the export of materials needed to make microchips and electronics, Japan can deal an incredible blow to a major South Korean industry. The public response in South Korea has tied Moon Jae-in’s hands; rather being able to settle the dispute in a diplomatic method, Moon will now have to answer to a public who will take nothing less than a total victory. With that in mind, there appears to be no signs of out a feasible way out and the dispute is likely to drag on.

Despite little maneuverability for both Seoul and Tokyo, a solution to this dispute is needed as quickly as possible. Without a quick resolution, the dispute will likely escalate and have massive ripple effects far beyond Asia, as South Korean electronics may become more expensive and Japanese brands start seeing massive dips in sales. As a major ally to both South Korea and Japan, the United States could play a mediating role in the dispute and work to bring it to an end as quickly as possible, before the effects of this dispute go world wide.

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Benjamin Zimmer

Benjamin is a Master of International Affairs student at The Bush School of Government at Texas A&M University where he focuses on East Asia and intelligence. He is the creator of The Korea Page: News and Analysis from the Korean Peninsula. His research interests include North Korean politics, the North Korea-United States relationship, and nuclear proliferation. His writings have appeared in The Peninsula Report, Foreign Policy Press, and The Sphere. He can be found on twitter at @bzimmer8.

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