The last four months of 2013 were uneventful for Korea-Japan relations. That is, simmering disputes continued to simmer and both sides made moves that annoyed the other, but there was almost no substantive action. Significantly, South Korean President Park Geun-hye continued to refuse to meet Japanese Prime Minister Abe Shinzo, and even some meetings between lower-level officials were called off. The biggest events were domestic issues that had implications for relations among the countries: the execution of Jang Song Thaek in North Korea and the release of the new National Security Strategy in Japan being the most notable. In all, relations remained frozen, with little evidence that 2014 would see any major changes in either attitudes or relations among Japan, South Korea, and North Korea.

The last four months of 2013 were uneventful for Korea-Japan relations. That is, simmering disputes continued to simmer and both sides made moves that annoyed the other, but there was almost no substantive action. Significantly, South Korean President Park Geun-hye continued to refuse to meet Japanese Prime Minister Abe Shinzo, and even some meetings between lower-level officials were called off. The biggest events were domestic issues that had implications for relations among the countries: the execution of Jang Song Thaek in North Korea and the release of the new National Security Strategy in Japan being the most notable. In all, relations remained frozen, with little evidence that 2014 would see any major changes in either attitudes or relations among Japan, South Korea, and North Korea.

Business as usual?

When South Korean President Park Geun-hye told leaders at the Association of Southeast Asian Nations (ASEAN)+3 (China, Japan, South Korea) meeting in Brunei in October of the festering “Asian paradox” (the disconnect between growing economic interdependence and decreasing politico-security cooperation), she may have taken for granted the impermeability of the two areas and the possibility of negative spill-over effects. After all, one can only row with one ore for so long without seeing that one is starting to spin in a circle. Unfortunately, the months of September to December demonstrated exactly this dynamic between economics and politics with several issues complicating Seoul-Tokyo economic relations.

On Sept. 6, Seoul announced its decision to widen its ban on Japanese fish imports to cover eight prefectures amid concerns about radiation contamination – even as Prime Minister Abe Shinzo was pitching Tokyo’s bid for the 2020 Olympic Games (which it won) and reassuring the international community that the post-Fukushima situation was very much under control. Meanwhile, the Tokyo Electric Power Co. (TEPCO) had recently admitted that since the Fukushima Daiichi nuclear disaster in March 2011, hundreds of metric tons of radioactive water were leaking into the Pacific Ocean on a daily basis. This did not go unnoticed by its neighbor: South Korean Minister of Oceans and Fisheries Yoon Jin-sook accused Tokyo of being “immoral” by trying to downplay the water leaks. Although it is uncertain if any of the political venom poisoned the general consumer mentality, according to a report on the impact of the Fukushima incident on the meat market released in November by the Korea Rural Economic Institute, an online poll found that eight out of 10 South Koreans have reduced fish consumption due to safety concerns associated with the revelations in Japan.

Subsequently, Japan’s challenge to Korea’s fish ban became an agenda item for the meeting of the World Trade Organization’s (WTO) Sanitary Phytosanitary (SPS) Measures Committee on Oct. 16-18, in Geneva. Incidentally, the SPS Committee heard a record number of specific trade concerns – 11 “new,” 12 “old,” and one listed under “other business” – of which the Korean ban fell into the first category. Essentially, Japan claimed that South Korea had not provided the scientific evidence justifying such restrictions, while Seoul argued that it could resort to Article 5.7. of the SPS agreement, which outlines provisional actions available to countries as precautionary measures. Despite the flare up, there have only been two official disputes lodged in the WTO with both Seoul and Tokyo as disputants – one concerning duties imposed by Japan on Dynamic Random Access Memories (DRAMs) from Korea (DS336), and another regarding Japan’s import quotas on dried laver and seasoned laver from Korea (DS323).

A domestic court ruling in Korea, however, had deeper implications for Japanese business interests. On Nov. 1, the Gwangju Local Court ruled in favor of four Korean women who were forcibly recruited as laborers during Japanese occupation of Korea, ordering Japan’s Mitsubishi Heavy Industries to pay compensation. This ruling was the third of its kind since the landmark ruling in May 2012 by the South Korean Supreme Court that allowed forced laborers and their families to seek withheld wages from Japanese companies. In response, Keidanren (Japanese Business Federation), the Japan Chamber of Commerce and Industry, the Japan Association of Corporate Executives, and the Japan-Korea Economic Association issued a statement on Nov. 6, expressing their concern that the ruling could become an impediment to future investment and business transactions between Japan and Korea. The statement added that the right to individual redress had been settled under the 1965 agreement when the two countries normalized relations. According to The Nikkei Shimbun, the chairperson of Nippon Steel & Sumitomo Metal Corp – another company ordered by South Korean courts to compensate Korean victims of forced labor – stated that “we [Nippon Steel] could find ourselves the target of shareholder lawsuit if we make payments that have no basis in law.” Moreover, the article suggests that Japan may look to the International Court of Justice (ICJ) for potential dispute settlement, adding yet another layer of international mediation to bilateral relations.

News also broke at the end of September that two major South Korean conglomerates – Samsung and LG Electronics – decided to drop pending lawsuits and agree to a partial patent cross-license involving organic light-emitting diode (OLED) material and mobile phone-related patents, which would be the first of its kind between the two rivals in 21 years. Analysts said the motivating factor in the settlement was the need to offset Japanese display manufacturers such as Panasonic and Japan Display, which are catching up in sales. In fact, the two Korean competitors found themselves on the same side when Rockstar, a consortium composed of Apple, Microsoft, Blackberry, Ericsson, and Sony, launched new lawsuits on patent infringement against a group of companies that run the rival Android operating system, including Google, Samsung Electronics, LG Electronics, HTC, and Huawei.

There were other more direct references to the economic rivalry between Japan and Korea in news reports that South Korea’s current account surplus would surpass Japan’s by the end of the year for the first time since data was collected by the Bank of Korea (BOK) in 1980. Other reports from Korean media outlets offered reminders that Seoul had outperformed Tokyo in economic growth for the 15^th straight year. Meanwhile, Japan’s Ministry of Economy, Trade, and Industry (METI) launched a ‘Cool Japan Initiative/Cool Japan Fund’ in November 2013 as part of its effort to raise overall competitiveness of Japanese companies in the global market. These all became fodder for the big news in late November that South Korea might join the 12-party Trans-Pacific Partnership (TPP) negotiations – of which Japan is a participant – despite speculations that it may be difficult for Seoul to join given that negotiations have been underway since 2010. According to South Korean Minister of Trade Yoon Sang-jick, the seemingly inopportune timing was very much intended as a “negotiation strategy,” hinting at the need to delay the announcement in order to keep pursuing talks on a Free Trade Agreement (FTA) with China, which is not a part of the TPP framework. Some scholars also cited the Japan factor as driving Seoul’s interest in the TPP.

Looking at the larger economic relationship between Japan and Korea, it does seem that economic relations were affected by “Abenomics,” as fluctuations in the exchange rate for the yen squeezed profit margins for Korean exporters. Between January and November 2013, Korean exports to Japan were down around 10 percent compared to 2012. Abe’s fiscal and monetary policy packages designed to ease Japanese deflation also affected the value of the yen relative to other currencies as the yen dropped below 10 won in December for the first time in five years, making Korean exports to Japan more expensive. Japan-Korea economic relations were affected in other ways as well: Japanese tourism to Korea is expected to drop 24 percent in 2013 compared to the previous year, while Chinese tourism to Korea has increased almost 50 percent to become the largest source of tourists for Korea. Meanwhile, Korea still sends more tourists to Japan than any other country.

In short, although political relations between the two countries have economic effects, the overall dynamics between the two economies appears to continue to be stable and interactions increasing. Most of the fluctuation in economic relations appears to be driven by economic issues, not political issues.

Territorial renaissance

An under-reported news item affecting Japan-Korea relations was the plan by Japan’s Liberal Democratic Party (LDP) special committee on security and land legislation to look into the acquisition by a South Korean company for resort development near the Maritime Self-Defense Force (MSDF) base on Tsushima Island in Nagasaki Prefecture. At a Nov. 16 Ministry of Defense (MoD) press conference, Japan’s Defense Minister Onodera Isunori expressed concerns that foreigners were buying land adjacent to the MSDF facility. Specifically, he stated that “a source of concern … is that it seems rather difficult for the Government to find out how the lands concerned are used and what becomes of the lands,” advocating a whole-of-government approach to the issue that involves not only the Diet, but also the Ministry of Justice – especially if a law intended to limit land purchase by foreigners results in conflict with the WTO. Back in 2005, the Seoul government was put in an awkward (and very much unwanted) position when the Masan City Council (now the Changwon City Council) passed an ordinance for the commemorating “Daemado Day,” with Daemado being the Korean name for Tsushima Island. Although the Korean government does not officially claim Tsushima or Daemado as its sovereign territory, the fascination with land is not lost on the Tokyo government to potentially restrict land acquisitions by foreigners.

Territory was at the heart of the dispute surrounding competing air defense identification zones (ADIZs) in Northeast Asia. On Nov 23, Beijing announced its East China Sea ADIZ requiring all aircraft to file a flight plan with Chinese authorities upon transit through the zone. China’s new ADIZ includes not only the Senkaku/Daioyu Islands, but also Ieodo/Suyan Rocks, which sparked immediate protests from Japan and South Korea. When Seoul announced the expansion of its own ADIZ on Dec. 8 to include the contested territory of Ieodo/Suyan Rocks, Japan publicly acknowledged Korea’s claims despite the partial overlap with Japan’s ADIZ. Japanese officials seemed to interpret Seoul’s move as a direct counter to that of Beijing, with Japan’s “blessing,” in essence creating a united Japan-Korea front against China. It is also important to note, however, that Japan’s ADIZ does not extend to the airspace over the contested islets of Dokdo/Takeshima, which may have facilitated the bilateral cooperation.

Dokdo/Takeshima did generate some friction between the two countries, however. Seoul protested a video clip posted on Japan’s Ministry of Foreign Affairs (MOFA) website claiming sovereignty over Takeshima, and then posted its own video claiming sovereignty of the islets on its website. Subsequently, there were reports that the month of November had seen more applications to serve as police on Dokdo than any other single month since recruitment began in September 2011 – apparently, a total of 198 people applied for just seven openings. Additionally, the South Korean National Assembly increased the 2014 budget allocated to promoting sovereignty over Dokdo by roughly 60 percent, from 4.24 billion won to 6.84 billion won ($6.5 million).

Turning lemons into lemonade

A news article in the Oct. 8 Japan Times, titled, “Gone in 60 Seconds: Abe-Park Talks” captured the political sentiment between Japan and South Korea. The headline refers to the brief exchange between Japan’s Abe Shinzo and South Korea’s Park Geun-hye as they sat next to each other at the Asia-Pacific Economic Cooperation (APEC) Economic Leaders Meeting in Bali, Indonesia. The two countries did not agree to formal bilateral talks on the sidelines of the meeting, hence the limited encounter. This mood, according to an article by Daniel Snyder in the Washington Post, was symptomatic of a “dysfunctional relationship,” a relationship in which the “United States must abandon its position of neutrality,” particularly concerning wartime history issues. Meanwhile, Martin Fackler and Choe Sang-hun writing in the Nov. 23 New York Times described the meeting between US Defense Secretary Chuck Hagel and South Korea’s Park Geun-hye in November as “something of a shock” as Hagel’s efforts to persuade Seoul to get along better with Tokyo had been thwarted by “the steely Ms. Park [who] instead delivered a lecture about Japan’s “total absence of sincerity” over the suffering that imperial Japan caused Korea in the last century and finished with a request of her own: that Washington force Tokyo to behave.

While it is true that there has yet to be a summit between the two heads of state since they took office, there were a couple noble attempts involving senior officials. For instance, Japan’s Deputy Minister for Foreign Affairs Sugiyama Shinsuke visited Seoul in September to meet South Korea’s First Vice Foreign Minister Kim Kyou-hyun and talk about ways to break the stalemate in bilateral relations. Later that month, South Korea’s Foreign Minister Yun Byung-se met Japanese counterpart Kishida Fumio on the sidelines of the 68th Session of the UN General Assembly in New York. The most notable consultation was between Japan’s Vice Minister of Defense Nishi Masanori and Korean counterpart Baek Seung-joo: they met in mid-November on the fringes of the Seoul Security Dialogue. This was the first bilateral meeting of vice defense ministers since November 2011. Although there were discussions about stepping up bilateral cooperation in dealing with North Korea’s nuclear and missile threats, Japan’s push for the right to collective self-defense was a point of concern for the South Korean side. The results suggested a lack of progress in reducing the political friction between the two countries.

Bilateral relations were further tested by South Korea’s joint plans with China to erect a monument in Harbin honoring Ahn Jung-geun – a Korean independence fighter who assassinated Japan’s first governor-general, Ito Hirobumi, in Harbin, China in 1909. Japan’s Chief Cabinet Secretary Suga Yoshihide expressed dismay at the plans and remarked that Ahn was a “criminal,” which generated backlash from Korean lawmakers and the public. China also weighed in with the Foreign Ministry spokesperson stating that “Ahn Jung Geun is a famous anti-Japanese martyr in the history, who is also respected by the Chinese. Another statue that became a point of contention between Seoul and Tokyo was the 1,100-pound statue in Glendale, California, honoring the “comfort women/sex slaves” that served the Japanese Army during World War II. Three members of the Japan Restoration Party, Sugita Mio (Hyogo Prefecture), Nishida Yuzuru (Chiba), and Nakamaru Hiromu (Hiroshima), visited Los Angeles in December on a two-day study mission of the controversial memorial. A  Los Angeles Times article quoted Nishida as saying “the news that the statue was installed made a big noise in Japan,” and that the reference to ‘sex slaves’ “hurts Japan’s honor.”

There were mixed results from people-to-people interaction between Japan and South Korea. More than 1,000 Japanese and Korean citizens set sail on the Peace & Green Boat Asia Regional Voyage on Oct. 18 from the port of Hakata, Japan – other ports on the itinerary include Busan (Korea), Keelung (Taiwan), Naha (Okinawa), and Shanghai (China).  These voyages aim at building greater understanding in the region with this year’s endeavor based around such themes as Article 9 of Japan’s constitution and its impact on peace and security in East Asia, historical reconciliation, and the “comfort women/sex slaves” issue. Mutual hostility – particularly anti-Japanese sentiments – became the subject of a three-part installment on chilly Japan-Korea relations by The Japan News by Yomiuri Shimbun: the first installment on Dec. 21, introduced the Voluntary Agency Network of Korea (VANK), a South Korean civic organization that has proposed to “cast Japan out of Asia” through programs that aim to train “cyberdiplomats” whose mission is to spread “correct knowledge” and send protest letters to those that “misunderstand” South Korea; the second installment on Dec. 22 covered Korean Americans and their “anti-Japanese campaign” in the United States; the third installment on Dec. 23, described the popularity of novels in South Korea that deal with the subject of military clashes with Japan. Given these two extreme sentiments, the “truth” was probably somewhere in the middle: relations between the respective publics were not explosive, but not warm either.

Singling out North Korea?

Tokyo adopted a new National Security Strategy on Dec. 17, which singled out North Korea and Iran for their nuclear and missile developments. Regarding Pyongyang, the document says that “As Kim Jung-un, First Chairman of the National Defense Commission, has been making efforts to consolidate his regime, the domestic situation in North Korea needs to be closely monitored,” and that “North Korea’s abduction is a grave issue affecting Japan’s sovereignty as well as the lives and safety of Japanese nationals.” The first portion perhaps refers to the execution of Jang Song Thaek – the uncle of Kim Jung Un and former vice chairman of the National Defense Commission – on Dec. 12, while the latter reinforces Tokyo’s longstanding position that normalization with Pyongyang would be extremely difficult without a resolution of the abduction issue. Previously, in September, Japan had stated that it was not interested in unconditional talks with North Korea, responding to remarks by Kim Kye Gwan, North Korea’s first vice foreign minister, who said his government wanted to revive the stalled Six-Party Talks without preconditions at a conference in Beijing.

Attempts to revitalize the Six-Party Talks gained little traction during the trilateral meeting in November involving US Special Envoy for North Korea Policy Glyn Davies, South Korea’s Special Representative for Korean Peninsula Peace and Security Affairs Cho Tae-yong, and Japan’s Director General of the Asian and Oceanian Affairs Bureau Ihara Junichi. A Chosun Ilbo article suggested that the three agreed that North Korea must show good faith by way of actions toward dismantlement of its nuclear program prior to any resumption of talks. This meant that the parties rejected a proposed compromise by China to restart negotiations while North Korea acts on its pledges.

The stalemate on the nuclear negotiations reflected a relatively quiet period in Tokyo-Pyongyang relations. Apart from the typical lambasting of Japan by North Korea on issues ranging from its militarization to its “crimes against humanity,” there were no major provocations between the two countries.

The coming year: all eyes on Abe

Japan’s new National Security Strategy and Abe’s visit to Yasukuni Shrine grabbed all the attention in December 2013. Headlines such as “Japan’s hawks unveil sweeping defense upgrades” and “Japan boosts military forces to counter China,” gave the impression that Japan had embarked on a sweeping remilitarization. However, the actual budget request associated with the new strategy is only a 3.0 percent increase in defense spending in 2014. The BBC reported that total spending over five years was expected to increase 2.6 percent. This increase reverses a decade of gradual declines in Japanese defense spending, and as de Koning and Lipscy note in a Foreign Policy article, “In U.S. dollar terms, Japan’s defense budget was 63 percent larger than China’s in 2000, but barely one-third the size of China’s in 2012.” So the increases, while significant, are not nearly as sweeping as they are often reported to be. The full extent of Japan’s defense spending over the next few years will depend on the success of Abe’s economic reform efforts and domestic politics of Japan. In fact, depending on how the overall economy performs a slight increase in Japanese defense spending may not even exceed the self-imposed ceiling of 1 percent of the GDP. Whether Abe is simply incrementally adjusting Japan’s foreign policy or attempting a wholesale reorientation of Japan’s foreign policy and posture – and more importantly, whether he can succeed at either – also remains to be seen.

In the coming year, relations between President Park and Prime Minister Abe will remain the most important story. On the one hand, Abe may decide to simply stop trying to repair relations with Korea, and Park may conclude that Abe simply cannot be trusted. If so, relations between these two important democracies may remain tense, if not downright ugly. If the two leaders are able to find a way to satisfy their domestic audiences as well as find some common ground, relations may improve.