Trade Agreement Between Japan And South Korea

The governments of China, South Korea and Japan are expected to begin negotiations on a possible trilateral free trade agreement between the three countries in 2012, first concluding bilateral agreements. Other analysts and experts, such as Kim Hyun-Chul, an expert in Japanese society at Seoul National University, told ABC News unlike the trade in manufactured goods, high-tech industrial products, which are purchased worldwide, are interdependent. Countries that depend on South Korean semiconductors, such as the United States, China and even Japan, will all be negatively affected, which has a domino effect on the global supply chain in the computer and smartphone industry. Meanwhile, Rajiv Biswas, chief Asia-Pacific economist at IHS Markit, said that U.S. electronics companies, many of which have large production centers in the U.S. and China, are vulnerable to supply shortages of South Korean storage chips, given South Korea`s importance as a supplier not only to hardware, such as mobile phones and electronics. , but also data processing programs. [168] As a by-product of the mega-market, Seoul and Tokyo are now bound by their first common free trade agreement. The trade dispute has led to a significant deterioration in relations between Japan and South Korea, at their lowest level since the normalization of diplomatic relations between the two countries in 1965. [7] Negotiations for a bilateral free trade agreement between Japan and Korea, which stopped in 2004 despite several attempts at recovery, face unresolved tensions resulting from Japan`s occupation of Korea in the first half of the 20th century and Japanese opposition to a reduction in tariffs on agricultural imports. A possible free trade agreement between China, South Korea and Japan must be taken into account in the context of the ongoing economic and political rivalry between China and the United States, as Washington considers creating a new regional free trade and investment agreement through membership of the Trans-Pacific Partnership (TPP). In response to Japan`s trade restrictions on South Korea, regional governments have launched a nationwide boycott of Japanese products and trade programs. The action includes the suspension of various activities such as public procurement and rental of Japanese products, official business trips to Japan and « sister relations » with Japanese cities.

[109] Although South Korea and Japan have had a fair share of disagreements on historical issues in recent decades, this ongoing dispute differs from the others, which it has spilled over into economic relations. According to a study by Kristin Vekasi of the University of Maine and Jiwon Nam at the University of Delaware, the heightened political tensions between Tokyo and Seoul prior to this recent outbreak have not affected business or consumer behaviour in both countries.