"Normalization of Korea-Japan Diplomacy and Trade Must Be Achieved During Japan's Suga Administration"

[Asia Economy Reporter Ki-min Lee] There has been a call to normalize diplomatic and trade relations between Korea and Japan during the administration of current Japanese Prime Minister Yoshihide Suga.

The Korea Chamber of Commerce and Industry (KCCI) held the "6th KCCI Trade Forum" on the 26th in collaboration with the law firm Yulchon to discuss the prospects and response strategies for Korea-Japan trade relations during the Suga administration.

Jeong Dong-su, an advisor at Yulchon and the presenter at this meeting, evaluated Korea-Japan trade relations, stating, "The Suga government is expected to maintain and manage the current situation rather than intensify export restrictions against Korea for the time being," and added, "Since the Japanese government also faces challenges such as overcoming the COVID-19 economic crisis and successfully hosting the Tokyo Olympics, it desires to improve Korea-Japan relations, so there is room for improvement in bilateral relations."

However, Advisor Jeong noted, "The Suga government is linking issues such as compensation for forced labor victims and the WTO complaints against the Japanese government to Korea-Japan relations, making it difficult for the two countries to reach a compromise in the short term," and forecasted, "Especially if a second round of export restrictions is imposed, advanced materials, material processing, sensors, and relatively non-sensitive strategic items or basic materials such as semiconductor and flat panel display manufacturing equipment, and fine chemical raw materials, which have high import dependence on Japan, could be targeted."

The second presenter, Senior Research Fellow Kim Gyu-pan of the Korea Institute for International Economic Policy, said, "Despite the Galapagos syndrome in Japanese manufacturing, our trade deficit with Japan continues, with over 60% of the deficit coming from materials and components." (Trade deficit means the state where import value exceeds export value.)

Senior Research Fellow Kim pointed out, "It has been one year and five months since Japan implemented regulatory measures in July last year to switch from a general license (valid for three years) to an individual license for three major semiconductor and display items exported to Korea," and added, "Except for hydrofluoric acid among the three major export-restricted items, import dependence on Japan remains unchanged."

Participants in this forum agreed that since the Suga government aims for practical and stable foreign relations, there may be an opportunity to turn around Korea-Japan relations, but they also agreed that many variables exist for a compromise. Nevertheless, with the sharp decline in Korean tourists and export impacts on Japanese parts and materials companies causing backlash, voices for improving relations are rising within Japan, emphasizing that this is an opportune time for bilateral relations improvement.

Proposed measures to improve Korea-Japan trade relations included ▲activation of private exchanges such as tourism, ▲easing of entry and exit restrictions between Korean and Japanese businesspeople, and ▲informal consultations and fostering a friendly atmosphere in the political sphere.

Woo Tae-hee, Executive Vice Chairman of KCCI, stated, "As Korea-Japan trade relations have been rigid for nearly a year and a half, the management difficulties of our companies due to uncertainty have also increased accordingly," and added, "The two governments should engage in negotiations with a forward-looking attitude aiming for the shared value of joint prosperity between Korea and Japan."

This content was produced with the assistance of AI translation services.