Mixed Signals in the Japan-South Korea Relationship

Much has been made of the acrimony between Japan and South Korea in recent years, and developments over the past few weeks have brought the poor relations between these two Asian democracies into sharp relief. For example, the bilateral currency swap between Japan and South Korea, a cooperative economic agreement that has been in effect since 2001, expired on February 23. Another concern is the conservative streak in the 16-member advisory panel constituted to advise the Japanese prime minister on his statement commemorating the 70th anniversary of Japan’s defeat.

Yet along with these negative developments, there are also hopeful signs that deserve more attention, including a Japanese lawmaker’s official meeting with South Korean President Park Geun-hye, and possible meetings between the two states’ foreign and finance ministers. These developments are future indicators – events that could significantly affect future relations – and offer grounds for cautious optimism.

The Japan-South Korea currency swap has expanded and contracted in response to political and economic developments since its creation in 2001. It began as a $2 billion framework to help stabilize the Japanese yen and South Korean won during times of international financial crises, based on the experience of the 1997 Asian financial crisis. It expanded to a peak of $70 billion dollars following the collapse of Lehman Brothers Holdings Inc. in 2008 and the eurozone debt crisis in 2011. The agreement was then reduced to $13 billion when the two governments failed to renew the expanded portion after then-South Korean President Lee Myung-bak’s visit to the disputed Liancourt Rocks in August 2012.

Japanese Prime Minister Shinzo Abe had said he would consider extending the agreement if Seoul asked, but Seoul did not. The lapse of this 14-year agreement is a clear defeat for the two states’ bilateral diplomacy. However, while the end of the currency swap agreement reflects the recent deterioration in the relationship, it is more indicative of past tensions than of the current and future state of the relationship.

The advisory panel for the Abe’s World War II anniversary statement is a better indicator of the future of the Japan-South Korea relationship. The panel’s recommendations have the potential to shape the tenor of the relationship over the next several months. Critics have denounced the panel for its bias despite Tokyo’s intention of a “balanced” makeup. Abe sympathizers on the panel include acting chair Shinichi Kitaoka, who advised the government on constitutional reinterpretation to allow for the right to collective self-defense, as well as Terumasa Nakanishi and Kunihiko Miyake. Chairman Taizo Nishimuro is a conservative who supports Abe’s nebulous “Beautiful Japan” agenda, but he may play a key role in advising moderation given his connections to Chinese government circles and role as co-chair of the New Japan-China Friendship Committee for the 21st Century.

At stake in the anniversary statement are key phrases – such as “colonial rule and aggression,” “deep remorse,” and “heartfelt apology” – that were first articulated in former Prime Minister Tomiichi Murayama’s 1995 statement and repeated in former Prime Minister Koizumi Junichiro’s 2005 statement. Should these phrases be absent from Abe’s statement, it would be read as a sign that Tokyo is backsliding on its willingness to face up to wartime actions. The conservative make-up of the advisory panel is important to Japan-South Korea relations only so far as it is interpreted as a sign of what Abe might say – the real implications for the relationship will not become clear until Abe makes his statement.

In the meantime, Abe’s approach to historical issues continues to stir up trouble, such as his demands that U.S. textbook publishers revise their descriptions of “comfort women,” his recent remarks that it is natural for a Japanese leader to want pay their respects at the Yasukuni Shrine, and the government’s decision to send a vice-minister level representative to Shimane Prefecture’s Takeshima Day celebration on February 22 for the third year in a row. But considering how bad relations have been on a macro scale, it is unlikely that any one of these micro events could make things any worse.

Still, it is worth noting that there have been positive signs as well, even if these tentative steps forward have received less attention. Among them was Toshihiro Nikai’s formal one-on-one meeting with Park on February 13. Nikai, a party executive in the ruling Liberal Democratic Party (LDP), handed Park a personal letter from Abe, in which the Japanese prime minister urged efforts to improve relations on the 50th anniversary of normalization between the two states.

During their meeting, Nikai agreed with Park that the issue of “comfort women” needs to be resolved as soon as possible, while the victims are still alive. Nikai’s position deviates from the official government line that all issues of compensation were resolved under the 1965 normalization agreement. Asahi Shimbun describes Nikai as “the man to watch in the LDP, mainly because he is almost alone in daring to publicly hint at a stance that runs counter to Abe’s views.” Nikai is a well-liked LDP member who is frustrated with the stalemate in Japan-South Korea relations. If he begins to take on a more public role, it could help moderate the Abe government’s hawkish attitude toward the memory-related issues that are so sensitive in South Korea.

Though it may be too soon to hope for a bilateral summit (which Abe and Park have yet to hold since they took office in December 2012 and February 2013, respectively), there are other important meetings in the works. The two countries are currently considering trilateral foreign minister talks with China on March 21 to 22 in Seoul. The meeting would focus on three-way cooperation and the North Korea situation. Japan and South Korea are also considering a meeting between their two finance ministers sometime in the next few months. There is no date or agenda set yet, but if such a meeting materialized, it would be the first of its kind since November 2012.

So what’s next for Japan-South Korea cooperation? Improvement, if the U.S. has anything to say about it. Washington is increasingly making its presence felt in the troubled relationship between its two allies. A study produced by the Congressional Research Service on U.S.-Japan relations in January noted that the “poor relationship between Seoul and Tokyo jeopardizes U.S. interests by complicating trilateral cooperation on North Korea policy and other regional challenges.” Newly appointed Secretary of Defense Ashton Carter has also weighed in, remarking that the “unhealed wounds of the past” in the Asia-Pacific are a source of instability.

To smooth ties, Washington is trying to ensure that Abe’s commemoration statement will not offend Japan’s Asian neighbors. However, U.S. pressure has never been very effective at deterring a strong prime minister from being insensitive to South Korean feelings, should domestic political conditions be lenient enough to allow Japan’s leader to “get away” with it. 

No, improving Japan-South Korea relations will require more politicians like Nikai, who value Japan’s relationship with its neighbor, to publicly criticize the Abe government and make the issue more salient within Japan’s domestic political dialogue. The South Korean government should also be realistic about what to expect from Tokyo. Making the “comfort women” issue the central piece of a relationship that has great potential for economic and security cooperation is not prudent policy, and could provoke an anti-Korea backlash in Japan. 

The road to rehabilitating the Japan-South Korea relationship will be long and torturous. Nonetheless, some first, tentative steps are being taken.