In recent weeks, many South Koreans have shunned anything labelled “Made in Japan” as a boycott against Japanese products spreads across the country. The boycott is in response to Japan’s decision to tighten export controls on semiconductor materials crucial to South Korea’s technology industry. Tensions between South Korea and Japan have escalated over disagreements on historical issues, including wartime forced labour.
The two countries are now locked in a trade war. Japan has removed South Korea from its “white list” of trusted countries for preferential export treatment. South Korea has announced that it is looking at “corresponding measures”. Meanwhile, the boycott in South Korea continues, with airlines reducing or suspending flights to Japan due to collapsing demand.
We asked Korean-New Zealander Onnuri Lee to tell us about the mood in Seoul.
Do you hear people in Seoul talking about the relationship with Japan? What are people talking about?
The latest dispute between Japan and South Korea has spilled over from the political to business and the public arena. In South Korea, these are issues of historical significance and interest of the public. The dispute is not only front page news, but has also resulted in public protests on the streets of Seoul and social media campaigns calling for a boycott of everything commercially related to Japan.
Anti-Japanese sentiment isn’t aimed at Japanese people, nor is it about how much economic damage can be made to Japanese companies. It’s in part about sending a message to the Japanese government regarding its economic retaliation by controlling the export of three materials vital to semiconductor and display manufacturing that South Korean companies such as Samsung Electronics and LG Display require to manufacture mobile phones and display units.
But this dispute is primarily about history, not trade. It stems from both countries having different views and understanding about the Japanese colonial rule of Korea. In South Korea, the boycott is about raising awareness of unresolved historical issues as well as demonstrating displeasure at historical and geographical disputes evolving into matters which affect citizens’ economic security.
Japan’s export restrictions came immediately after the South Korean Supreme Court’s decision to award damages to Korean labourers forced to work for Japanese companies during Japan’s 1910-45 occupation of Korea. Japan says that claims arising from the forced labour were resolved in 1965. The South Korean government responded that the judiciary’s decision is separate from the executive, and has asked Japan to start a joint fund for the families of approximately 725,000 victims that Japan previously refused.
South Korea and Japan’s disagreements over historical issues also includes the more sensitive issue of wartime sexual slavery, or “comfort women”, from Korea who were made to serve Japanese troops sexually during World War II.
Have you noticed people participating in the boycott against Japan? What about you?
Although I have not personally participated in a boycott, I would agree that the boycott seems rational and reasonable in response to the Japanese government’s economic sanctions against Korean companies.
People are participating in the boycott against Japanese products and services. Korean convenience store owners are also taking action by either removing Japanese products off their shelves, and Japanese restaurants are claiming that they source ingredients from Korea and not Japan. People are also cancelling their upcoming summer holidays to Japan. One colleague who recently visited Japan prefaced his visit with a comment that the airfare and accommodation were non-refundable.
A leading Japanese travel agency, JTB, has reported a 10 per cent decline year-on-year in Korean travellers coming to Japan. In 2018, 7.53 million Koreans visited Japan, accounting for 24 per cent of all foreign tourists spending NZ$8.2 billion (13 per cent of total spending by foreign visitors), according to the Japan National Tourism Organization.
Boycott campaigns of Japanese products in Korea are putting pressure on a number of major Japanese firms including Fast Retailing Co., which operates 187 Uniqlo outlets in Korea, which reported falling sales for July.
Are you worried about the impact of tensions with Japan?
I’m concerned that this dispute will in the short-term further slow Korea’s economy, which relies on the stability and harmonious trading relationships with China, Japan, and the United States. This dispute will also cause economic instability in the region, disrupting global supply chains, and inevitably harming consumers worldwide who will end up paying more for popular gadgets such as televisions and iPhones.
Eventually, Korean companies will find substitutes and ways around being reliant on Japanese suppliers. But, as political and business tensions continue, it may be that opportunities for personal connections suffer as well. For instance, this rift has the Busan City Council halting all current and future activities with its sister-cities in Japan.
Do you think that this time is different from previous periods of disagreement?
This time it’s different for two reasons. First, previous disputes mostly occurred at the government level and did not escalate to other areas such as the economy or the military. Previously, because the disputes were contained to historical and geographical issues discussed between governments, the public did not have skin in the game. With economic security negatively impacted, the issues have become much more personal.
Second, the restriction of three materials could cut Korea’s GDP by 4.47 per cent according to Korean Economic Research Institute, compared to only 0.04 per cent for Japan. Japan is one of Korea’s top export destinations as well as top import origins. Korea, too, is one of Japan’s top export destinations and top import origins. A harmonious relationship between the two countries are critical for the economic livelihood of the public in both countries; particularly amid growing trade tensions between China and the United States, both countries which are also vital to Korea and Japan.
Why should New Zealanders pay attention?
South Korea and Japan are significant trading partners for New Zealand, and their continued economic growth and stability are crucial to our economic interests.
More broadly, as advocates for free and open trade and supporters of international trade rules, we should be promoting trade and investment that is free, non-discriminatory, and transparent.
Onnuri Lee is a New Zealander of Korean descent who is currently working for a financial services start-up in Seoul. Views expressed in this article are personal to the author.
Main image: Pixabay
- Asia Media Centre