South Korean companies (Samsung and SK Hynix) produce about 17% of the world’s semiconductors. To manufacture these, they’re dependent on imports of Japanese hydrogen fluoride gas, fluorinated polyimide, and photoresists. Japanese firms control 90% of the polyimide market needed for screen applications, so the relationship between these neighboring prosperous northeast Asian countries is crucial to the operation of global communications.
Japan has begun restricting exports of these products to South Korea, in response to a South Korean Supreme Court decision in 2018 requiring Japanese firms to compensate involuntary Korean labor during the colonial period (1910-45). President Moon Jae-in is not responsible for the court decision but his nationalist Democratic Party supports it.
This is a big story, largely eclipsed by Trump-related stories in the U.S. media. It involves the 3rd and 11th largest economies in the world, and the countries which host the first and third largest number of U.S. troops abroad (56,000 in Japan, 25,000 in Korea; compare 35,000 Germany). The United States, Japan and South Korea are linked by a military alliance directed against North Korea, China, and Russia. They hold joint military operations regularly. These operations are threatened by this flap.
Tokyo points out that the 1965 treaty between the two countries settled any Korean outstanding claims for reparations—about $800 million at the time. Tokyo refuses to pay more, lest a precedent be set, and China also be prompted to make demands not already resolved in 1972. Tokyo has called for international arbitration in the wake of the court decision, but Seoul has refused. In response to the court ruling, which particularly targets Nippon Steel and Mitsubishi Heavy Industries, Tokyo has removed South Korea from its “white list” of 27 countries that receive expedited treatment in trade transactions. (There is no direct causal relationship, but it’s understood Japan wants to punish Seoul for the annoying court decision.)
This means that there will be months-long delays involving paperwork, and deliveries of the above-mentioned commodities from Japan to South Korea will not be guaranteed. Stock values in alternative microchip providers in the U.S.(Intel) and Taiwan (Taiwan Semiconductor) has soared. Largely ignored by the western press, this is a serious trade conflict occurring while Korean nationalism on both sides of the DMZ is at an all-time high, along with sympathy for reunification.
Meanwhile Japanese public opinion is disturbingly anti-Korean. 56% of those polled say the economic retaliation to the court decision was appropriate. The Koreans are depicted as unreasonable, unable to accept multiple sincere, even abject apologies from Japanese prime ministers and emperors for the legacy of Japanese colonialism, insistent on focusing on the past, insatiable in their demands for Japanese compensation. They are just anti-Japanese. Shigataganai. It can’t be helped. (Such sentiments reflect the widespread ignorance, hence insensitivity, in Japan, regarding the painful impact of Japanese colonialism on Korea between 1910 and 1945.)
Trump’s threat to annihilate North Korea (and hence the entire peninsula) caused the two Korean leaders Kim Jong-un and Moon Jae-in to meet and sign a series of agreements lowering tensions on the peninsula. South Koreans were the intermediaries in preparing the Trump-Kim summits. The best way for the Koreans to obtain the “spiritual victory” over Japan they have proclaimed over the current standoff, is to reunify, withdraw from the tripartite military pact with the U.S. and Japan, and expel the 30,000 U.S. troops.
The threat to the South Korean economy posed by Japanese actions could impede Moon’s Korean reconciliation policy; if Moon falls, the plans for railway links and renewed trade ties could suffer. Or Japanese hostility could encourage Korean unity. Seoul and Pyongyang will always unite in condemning Japan.
One missing element in the evolving crisis is U.S. involvement. The State Department is understaffed, Trump ignorant and indifferent. John Bolton was dispatched to Seoul, not to discuss the Japan-Korea crisis, but to demand that South Korea pay more to support U.S. forces. Washington seems inclined to leave the quarrel alone, which means to encourage Abe Shinzo—the strongest, most durable prime minister ever—in his nationalist militarism, and Moon in his nationalist opportunism rooted in domestic politics.
Trump’s staff claims Moon Jae-in has requested Trump to mediate the dispute. But (aside from being an ignorant buffoon) Trump is not the sort to sympathize with the victims in any historical relationship, or show any sympathies for the subjects of colonialism. After his first meeting with Xi Jinping he declared that he’d learned Korea had once been part of China, a profoundly inaccurate and offensive statement.
Moon is likely to suffer some humiliation as Japan sticks to its guns and Seoul receives little support for its legal claims. Seoul will have to back down to maintain Samsung’s profitability. And if lack of any U.S. support inclines the South Koreans to distance themselves from their patrons, the better to cozy up with the north, well and good!
The point is not more Japanese reparations but the repair of the divided peninsula. There’s no way Mitsubishi’s going to compensate any survivors of wartime slave labor. There’s no point in Korean nationalists demanding endless apologies and concessions from the former colonial power. Japan is not the power preventing Korean reunification. Only the U.S. can do that.
Kim Jung-un’s acquisition of nuclear weapons has forced the U.S. to negotiate with North Korea, and facilitated a series of positive exchanges with the south. A Confederation of Goryeo (on the model of one country, two systems) realistically beckons. There is a Silicon Valley waiting somewhere in the lap of Mt. Paekchong.
Demanding more Japanese reparations at this time is to change the subject, distracting attention from the prospect at hand: Korean reunification and the expulsion of the occupiers.
The Author: Gary Leupp is a Professor of History at Tufts University, and author of numerous works on Japanese history.
*Original article online at https://dissidentvoice.org/2019/07/the-japan-korea-semiconductor-flap/