As a tumultuous summer drew to a close, North Korea’s missile launches in July and the election of Abe Shinzo as prime minister of Japan in September may have marked the beginning of a new chapter in Northeast Asian regional relations. Although neither by itself has clearly redefined Japan-Korea relations, both events are widely seen to presage a new series of options and possibilities in the region. The missile launches in early July marked the escalation of the North Korean issue to new heights, prompting a stern response even from countries such as China and South Korea, the end result being a UN resolution that could open the door to economic sanctions against the North.

As for Abe’s election, former Prime Minister Koizumi was widely considered to have been a revolutionary Japanese politician, and whether Abe will continue along the same path as Koizumi remains to be seen. Certainly Abe, as both the youngest prime minister in the postwar era and the first one born after World War II, appears to have the potential to continue Koizumi’s reformist path. How Japan under Abe might deal with both North and South Korea has been the source of tremendous speculation, and while there are a number of predictions, it remains to be seen how and in what manner Abe’s foreign policy will develop. Some speculate that Abe will be even more assertive toward the Koreas than was Koizumi. Others wonder whether Koizumi might have been the exception, and whether Abe will revert to the norm of previous prime ministers remarkable mainly for their blandness and conventionality.

Japan-North Korea: intimidation + sanctions = abnormal relations

North Korea opened the quarter with the launch of seven missiles into the Sea of Japan/East Sea, and Tokyo’s response was so quick and assertive in denouncing Pyongyang’s decision that Japan’s diplomacy surprised the world for its unprecedented “leadership.” Less than a day after the first launches, Tokyo asked the UN Security Council to convene an urgent meeting and introduced a draft Security Council resolution calling for sanctions to prevent Pyongyang from acquiring funds, material, or technology for missiles or weapons of mass destruction. By highlighting the fact that Japan is not a “normal” country in a dangerous neighborhood, the tests worked favorably for Japanese hardline politicians, enabling them to better appeal to both domestic and international audiences.

Although the full impact of North Korea’s missile tests remains to be seen, developments suggest that Tokyo and Pyongyang have moved farther away from normalizing their bilateral relations. First, Japan placed various unilateral sanctions on Pyongyang while working diligently to get other countries to cooperate with them, while North Korea responded to these moves with more intimidation. Upon the North’s missile launches, Japan immediately imposed a six-month ban on port calls by the North Korean ferry Mangyongbong-92, the only passenger link between Japan and North Korea. At the same time, Tokyo stepped up the screening of entry requests and barred North Korean officials from entering Japan. Abe defended the Japanese government’s rejection of requests made by five North Koreans who wanted to visit Japan to give speeches about the forced labor issue at citizens’ groups, on the grounds that some of them are involved with Pyongyang’s intelligence activities against Japan. A month later, the Justice Ministry denied visas to six North Koreans representing Christian and Buddhist organizations because they appeared to be linked to the North Korean government. In line with UN Security Council Resolution 1695 adopted July 15 without the Chapter 7 invocation (that allows economic sanctions), on Sept. 19 Japan imposed a ban on financial transfers and overseas remittances to 15 North Korea-linked financial institutions and trading firms as well as Jakob Steiger, president of Swiss company Kohas AG. Those moves took effect immediately.

North Korea strongly criticized Japan’s moves and demanded that the new economic sanctions be lifted. On July 7, Song Il-ho, North Korea’s ambassador in charge of diplomatic normalization talks with Japan, told Japanese reporters that the sanctions could bring about “devastating consequences” and “catastrophic results.” Song also said Japan-North Korea relations “have gone past the worst to the confrontational stage.” Japan’s then-Chief Cabinet Secretary Abe Shinzo responded by saying that, “we would like [the North] to think about who brought about the current relationship. The abductions, the nuclear, and the missile issues – North Korea caused all of them.” The Japanese newspaper Asahi Shimbun July 9 editorial commented that Japan-North Korea relations were a truly abnormal relationship and questioned how the two countries could “normalize” their bilateral relations.

More importantly, careful reading of Japan’s reaction makes one wonder whether the missile launches – so close to the LDP presidential election – have pushed Japan closer to revising its postwar pacifist Constitution. Although Abe Shinzo had long been the expected winner of the Sept. 20 presidential election, Japanese political analysts noted that the missile tests and the sense of crisis among the Japanese public were a big plus for Abe. A Kyodo News poll held on July 8 and 9 showed that 87 percent of respondents expressed anxiety over North Korea’s missile launches, with 45.2 percent saying that they “feel very anxious” and 41.8 percent saying they “feel somewhat anxious.” The same poll found that 82.6 percent said they give credit to the government for invoking economic sanctions while 80.7 percent said that Japan should step up economic sanctions against North Korea with only 12.6 percent responding otherwise. While TV cameras and reporters were constantly following Abe, he successfully played a strong leader, boosting his popularity. According to a Yomiuri Shimbun poll on July 8 and 9, Abe was the most favored to succeed Koizumi with 45.6 percent of 1,867 people, while 18.3 percent backing former Chief Cabinet Secretary Fukuda Yasuo, who later decided not to run.

It was in this context that Abe Shinzo, known as a longtime advocate for revising the pacifist Constitution, broached the possibility of “attacking [North Korea’s] missile bases within the legal right of self-defense” under the condition that Japan has “no other option to prevent a missile attack.” Although his comment drew criticism and attention worldwide for advocating a preemptive strike, a day earlier the head of the Japan Defense Agency Nukaga Fukushiro said that Japan should consider preemptive strikes “if an enemy country definitely has a way of attacking Japan,” Abe clarified that he was talking about one option allowed under the Constitution to strike a foreign missile base “when [Japan] is being attacked with missiles.” On July 26, the Korean Central News Agency, North Korea’s official news agency, reported that Japanese authorities vied with each other “to cry out a preemptive attack” on Pyongyang and advised “not to go reckless like a newborn puppy which knows no fear of a tiger.”

Given the missile tests, the abduction issue took a backseat during the quarter, with no progress made, even after South Korean abductee Kim Young-nam repeated at a press conference at Mt. Kumgang Pyongyang’s claim that Japanese abductee Yokota Megumi committed suicide in 1994.

Although Japan-North Korea relations during the Abe era began in a less than friendly manner, the door for diplomatic normalization is not closed. Abe, despite his well-known hawkish stance toward North Korea, is said to have described North Korea’s Kim Jong-il as “a leader who can talk logically and think rationally,” when recalling his meeting with him in Pyongyang in September 2002. On North Korea’s part, Jong Thae-hwa, a former top negotiator in normalization talks with Japan, told Kyodo News that the new Japanese leadership “should abandon its policy of hostility” against North Korea and work to sincerely implement the Pyongyang Declaration of 2002, should Japan hope to prosper together with North Korea as neighbors. Sept. 17 marked the fourth anniversary of the signing of the bilateral Pyongyang Declaration between Koizumi and Kim.

Japan-South Korea: near, yet distant countries

Japan-South Korea relations remained chilly amid a hot war of words surrounding North Korea’s missile launches, disputes over the Dokdo/Takeshima islets, and Prime Minister Koizumi’s visit to the Yasukuni Shrine on Aug. 15. Toward Abe Shinzo – who has tended to cause ire among South Koreans with his nationalist remarks and potential policies – Seoul seemed to express mixed feelings of cautious hope for a new breakthrough in their bilateral relations and concern over the future direction of Japan under Abe’s leadership.

An incident over the Sea of Japan/East Sea on July 5 revealed how geographically close Japan and the two Koreas are, and how “dynamic” their relationship can be. As North Korea was firing seven test missiles into the Sea of Japan/East Sea beginning at 3:32 am, South Korea sent a research vessel into waters near the Dokdo/Takeshima islets and was met by a Japanese boat that issued a warning to stop. The South Korean vessel responded that it was conducting a survey in “South Korean” territorial waters and warned that the Japanese boat should not interfere. Japan’s Foreign Ministry called the South Korean Ambassador to Japan Ro Jong-il and issued a protest statement expressing “extreme displeasure.” When the Japanese government promised its own counter-survey, the South Korean government responded by claiming that Tokyo would need “consent” from Seoul for any research in “South Korean” waters.

Subsequently, in early September, Tokyo and Seoul met for the sixth time since 1996 for negotiations aimed at comprehensively delineating the boundaries of their exclusive economic zones (EEZ). The bad news is that the negotiations ended without an agreement. The good news is that the two sides agreed to resume negotiations in Tokyo as soon as possible, and to work based on the mutual understanding that the boundaries are to be drawn by compromise. The two governments also decided that they will conduct a joint survey of sea radiation looking for evidence of contamination in the disputed area to avoid any potential conflicts between survey vessels and their maritime defense forces. Scientific research in a disputed area could help bolster a territorial claim. In another sign of “cooperation despite antagonism,” for the fourth time since 1999, the coast guards of Japan and South Korea on Sept. 13 conducted a joint rescue exercise 230 km south of Jeju Island under the scenario in which a fishing boat sinks and its crew is adrift in a raft.

The two different faces of Tokyo and Seoul during the days that followed the North’s missile tests reveal the contours of their bilateral relations, as the two sides traded accusations. Whereas Japan immediately imposed economic sanctions and worked hard to get other countries to adopt a UN Security Council resolution condemning the North’s behavior, South Korea, facing domestic criticism that the government had under-reacted to the North’s provocation, issued a statement saying “South Korea has no reason to make a fuss about it like Japan did starting early in the morning.” In response to South Korean President Roh’s comment that Japan’s reaction was excessive, Abe reacted angrily, noting the constitutionality of attacking the missile sites. South Korea’s Blue House spokesman Jung Tae-ho responded in kind, vehemently linking Japan’s reaction to the North’s missile launches with Japan’s “invasive ambitions,” and scolding Japanese leaders’ “arrogant and thoughtless remarks to try to stroke a crisis on the peninsula and take advantage of the situation to build up their military.” Abe denied the charge that he plans a preemptive attack on North Korea’s missile sites.

The reaction to North Korea’s missile tests was another indicator of the wide gap between Tokyo and Seoul over what is perceived as a threat to national security. Nukaga Fukushiro, the head of Japan’s Defense Agency, asked, “if an enemy is targeting Japan and has its finger on a trigger, what should Japan do?” South Korea’s Unification Minister Lee Jong-seok said “when it comes to security threats, North Korea poses a microscopic one in the short term, but we can’t deny that Japan poses one in the long term and from a historical point of view.”

The conflict between Tokyo and Seoul grew ugly in part because Seoul reacted to Tokyo’s moves against Pyongyang as if they were directed against the entire Korean Peninsula. When Tokyo submitted a draft UN Security Council resolution, Seoul was concerned that Japan did not consult with the South Korean government first, because the draft mentioned the “use of force” under Chapter 7 of the UN Charter. South Korea’s Vice Foreign Minister Lee Kyu-hyung called in Japanese Ambassador to Korea Oshima Shotaro to inform him that Seoul would not support the resolution. For Tokyo, responses from Seoul such as President Roh’s comment that although he could hardly understand the North’s intention behind the missile tests, “more worrisome is some Japanese leaders’ remarks about a preemptive attack,” made Seoul appear to be both willingly missing the point and needlessly provocative.

A month later, another incident underscored the gulf between Seoul and Tokyo. Unlike its restrained reaction to the North’s missile tests, Seoul’s response to Koizumi’s visit to the Yasukuni Shrine on Aug. 15 was quick, expressing “deep disappointment and indignation.” With Koizumi leaving office having held no summit with South Korea in over a year, Seoul has turned its attention to Abe. Despite the forecast made earlier this year that the question of how to mend relations with South Korea and China would top the policy debate among candidates for the September LDP presidential election, the issue was more or less muted during the Japanese election campaign.

One important factor was that Fukuda, a vocal critic of Prime Minister Koizumi’s visits to the Yasukuni Shrine and an advocate of friendly relations with South Korea and China, decided not to run for the presidential election. The other factor was that Abe, the most favored candidate, has avoided giving clear positions on Shrine visits, preventing the issue from being the contentious point of the campaign.

Noteworthy was Seoul’s more vociferous reaction to Japan’s thought of revising the pacifist constitution. During the bilateral “strategic dialogue” on Sept. 7, Vice Foreign Minister Yu Myung-hwan of South Korea told his Japanese counterpart Yachi Shotaro that Seoul was concerned about possible changes to Japan’s constitution. Commenting on remarks made by former Japanese Prime Minister Nakasone Yasuhiro that urged discussion on the development of nuclear weapons, Yu said that Seoul wanted Japan’s new leadership to take note of its concerns. The Korea Times on Sept. 22 expressed the concern that Abe, known as a hawk and in favor of revising the Constitution, had given full support to Prime Minister Koizumi’s visits to Yasukuni Shrine and commented that, “if Abe keeps using the communist regime [North Korea] as a scapegoat for Japan’s military buildup in alliance with the United States, regional tension will only intensify.”

Despite Seoul’s skepticism about Abe, when the Diet elected Abe Shinzo to replace Koizumi as the new prime minister of Japan on Sept. 26, Abe and Roh talked on the telephone for 20 minutes and agreed to meet as soon as possible. According to the Korean media, the heads of the two states are likely to meet in early or mid-October.

Economic relations

With Japan imposing a series of major economic sanctions against North Korea, Japan-North Korean economic relations have clearly deteriorated. After the Japanese government named 15 organizations and one individual to be subjected to restrictions under the Foreign Exchange and Foreign Trade Law and barred them from transferring funds to North Korea, the next step was to tighten the exports of items that could end up in North Korea for weapons development, according to the Japan Times. Japanese firms are prohibited from sending certain types of equipment to North Korea, Iraq, or Libya. Furthermore, the Japanese Ministry of Economy, Trade, and Industry (METI) is considering the revision of its regulations to require all firms to tell METI where their products are going, in an attempt to stop them from being delivered to North Korea. In August, executives of Mitutoyo Corp. were arrested for exporting two sensitive measuring devices to Malaysia in 2001 that could be used to produce nuclear weapons. One of them was found in a nuclear facility in Libya during the weapons inspections of 2003 and 2004.

From Japan-South Korean economic relations, the events of the past quarter reveal that economic interdependence has still not had any measurable impact on political relations between the two countries. Even as the Japanese and South Korean governments were haggling over issues of the territorial claims, Pyongyang’s missile tests, and Yasukuni Shrine, their two economies continued to deepen even further, bringing with it competition and cooperation. One notable trend during the past quarter has been that the government agencies of Japan, South Korea, and China have initiated unprecedented intergovernmental cooperation in the areas of tourism and transportation. The ministers of the three countries in charge of tourism held the first-ever meeting to boost the number of visitors among the three countries to 17 million in five years, 5 million higher than the present level. Land, Infrastructure, and Transport Minister Kitagawa Kazuo of Japan, Director of China’s National Tourism Administration Shao Qiwei and South Korea’s Culture and Tourism Minister Kim Myong-gon adopted the Hokkaido Declaration and decided that they would meet annually taking turns as host. The Hokkaido Declaration expressed the importance of peace and stability in East Asia through strengthened interactions, promised to remove obstacles to tourism exchanges, and agreed to attract tourists from other parts of the world through joint promotion campaigns.

On Sept. 7, there was another first-ever trilateral transport ministers’ meeting aimed at creating a “seamless logistics system” in Northeast Asia. Japan’s Land, Infrastructure and Transport Minister, Kitagawa Kazuo, China’s Communication Minister Li Shenglin, and South Korea’s Minister of Maritime Affairs and Fisheries, Kim Sung-jin agreed to cooperate on a project to establish a unified foundation for logistics between the countries in ways that are commensurate with their combined gross volume of trade, which came to $400 billion last year. They also decided to meet annually so that the meetings eventually evolve into an intergovernmental cooperative channel.

At the private level, cooperation between Japanese and South Korean firms also continued apace; South Korea’s Samsung Electronics Co. and Japan’s Sony Corp. decided to invest $1.9 billion to build a liquid crystal display panel factory in Tangjeong, South Korean Chungcheong Province. The plant for eighth-generation flat panels will be built in S-LCD’s Tangjeong complex in a site next to the panel maker’s seventh-generation production lines. According to South Chungcheong Gov. Lee Won-koo, the entire LCD “valley,” when completed in 2015, will create 50,000 jobs, increasing local tax avenues by 150 billion won and national tax avenue by 860 billion won. Nihon Keizai Shimbun Sept. 5 quoted unidentified corporate executives that South Korean steelmaker POSCO and Japan’s Nippon Steel Corp. were entering into a strategic alliance. Joongang Ilbo Sept. 6 interviewed a POSCO spokeswoman, Hong Jin-sook, who said that although the Japanese media report was premature, it was true that the two companies had been discussing cooperation in materials, accounting, and marketing activities since 2000.

While negotiations over a Japan-South Korea free trade agreement (FTA) did not make much progress, Japan proposed creating a 16-nation free trade area including Japan, China, India, Australia, and New Zealand, covering half the world’s population. According to Kyodo News Aug. 24, South Korea and China dismissed Japan’s proposal as infeasible and maintained that a 13-nation FTA involving just ASEAN, China, South Korea, and Japan should take precedence.

Despite this cooperation, economic competition between Japan and South Korea in such areas as electronics has intensified. The Choson Ilbo reported Aug. 7 that Toshiba has started building its fourth flash memory plant in an effort to catch up with its Korean competitor Samsung Electronics. Toshiba was the first to develop flash memory in the 1990s but was overtaken by Samsung. Toshiba plans to invest more than ¥1 trillion by 2008. Matsushita and Pioneer, Japan’s No. 1 and 2 Plasma Display Panel (PDP) makers, are also expanding their manufacturing facilities. Matsushita overtook LG Electronics and Samsung to claim the No. 1 position in the global PDP market in the second quarter by boosting production at its plant in Amagasaki to 3.4 million units a year.

According to the Japan Times, South Korean auto and home appliance makers are making a big push in the Japanese market. It reported that South Korean firms are gaining popularity with Japanese consumers based on “low-priced but good quality,” instead of the earlier strategy based on the premise of “cheap, but you get what you pay for.” Hyundai Motors Japan is targeting Japanese consumers in their 40s and 50s, and hopes to sell about 5,000 cars in Japan this year, after selling about 2,300 units last year. LG Electronics is changing its strategy in Japan, hoping to change its image from that of a supplier of cheap products to that of high value-added products, including items such as liquid crystal display television sets, washing machines, and refrigerators. According to the Korea Trade-Investment Promotion Agency, South Korea exported about $3.8 billion worth of consumer goods to Japan last year, down 14 percent from a year earlier, due mainly to China’s emergence in the fields of light industrial products.

South Korea’s trade deficit with Japan is expected to be the highest ever. The trade deficit during the first half-year registered $12.5 billion, the highest among the half-year records. This long-time trade imbalance with Japan was attributed to the economic structure of the two economies, in that any rise in South Korean exports is linked to an increase in Japanese imports because many components for products such as cellular phones and automobiles are imported from Japan.

Cultural relations

The North’s missile tests had a direct impact on relations between the pro-Pyongyang group Chongryun and pro-Seoul group Mindan within Japan. Ending a hard-won reconciliation agreement between the two groups signed earlier this year, the pro-Seoul group Mindan on July 6 officially ended the statement of reconciliation, saying that it would never forgive North Korea’s “brutal act.” This came amid internal conflict within Mindan itself, as the regional chapters had been opposed to the reconciliation moves. As a result, several senior officials of Mindan, including the President Ha Byung-ok, stepped down July 21 to take responsibility for the turmoil. Chongryun itself and several other affiliated organizations, including a pro-Pyongyang school in Tokyo, have received harassing phone calls after the North’s missile launches. The Metropolitan Police Department tightened security and increased the number of officers on guard at Chongryun’s head office in Central Tokyo and other facilities.

Inside South Korea, a civic group decided to take the case of South Korean comfort women to the ROK Constitutional Court because the South Korean government failed to take diplomatic action demanding that Japan take responsibility. According to the Joongang Ilbo, about 30 lawyers affiliated with the Minbyun, the Lawyers for a Democratic Society, would take part in the petition. The U.S. House International Relations Committee unanimously passed a resolution calling on Tokyo to acknowledge the fact that it drafted comfort women from Asian countries, accept responsibility, and educate future generations about this crime against humanity.

The South Korean government also started an investigation aimed at confiscating the assets of descendents of Japanese collaborators who received financial benefits from some 400 pro-Japanese activities during the Japanese occupation. The Committee for the Inspection of Property of Japan Collaborators is composed of 104 public officials from various governmental agencies such as the Ministry of Justice, the National Police Agency, the Ministry of Finance and Economy, and the National Tax Service. The establishment of this Presidential Panel is based on a special law enacted last December, and confiscated assets will be used to support the descendents of Korean independence fighters, most of whom live in destitution.

Japan-South Korea cultural relations continued to be intertwined, as South Korean celebrities remained popular in Japan, while some Japanese models have been increasingly seen in commercials in South Korea. According to a recent poll of Japanese women between the ages of 18 and 25 by the Japanese broadcaster NTV’s variety show Geikoi Real, South Korean actor Kwon Sang-woo and singer BoA were the two South Korean stars to appear on a list of the most popular world celebrities, which included entertainers, politicians, athletes, and writers. The U.S. newspaper Chicago Tribune noted the success of Korean pop culture across Asia, reporting that South Korean male celebrities are among the highest-paid actors outside Hollywood.

The coming quarter

The coming quarter promises to be eventful. Not only are there rumors of a North Korean nuclear test – which would surely draw even greater ire from Japan than its missile tests – but South Korea and Japan hope to hold a summit between their two leaders. Whether Abe and Roh can manage to put their relationship, and relations between the two countries, back on a path toward political normalcy remains to be seen. For now, speculation is rife in both Japan and South Korea about the prospects for such an event. Negotiations between Japan and South Korea will continue over Dokdo/Takeshima, North Korean policy, and other issues.