Asia Minute: Deepening Dispute between South Korea and Japan

Sep 10, 2019

A continuing dispute between South Korea and Japan has moved from politics and history to business.

South Korea and Japan have been locked in a dispute that starts with history.

South Korea’s Supreme Court has ruled Japanese companies are financially liable for payments to Koreans forced into labor during the Second World War. Japan says all claims were settled when the two countries normalized relations in 1965.

This split has led to the cancellation of an intelligence-sharing agreement between two of the most important allies of the United States in the Asia Pacific — at the same time North Korea is increasing its testing of short-range missiles.

Diplomatic and trade tensions have increased in intensity in recent weeks, and results are showing up in figures from travel and tourism to sales of cars and beer.

This coming Friday is Chuseok — a national holiday often called Korea’s Thanksgiving, which is a popular time for travel. The Chosun Ilbo reports last year, more than 21% of South Korean holiday flight bookings were to Japan.

This year, it’s just over three percent.

Bloomberg quotes industry figures showing sales of Japanese cars in South Korea fell 17% in July compared to a year earlier — and the pace picked up to a 57% decline in August.

And preliminary figures from the Korea Customs Service show Japanese beer exports to South Korea have plunged 97% – from more than 7.5 million dollars last August to less than a quarter of a million dollars last month.