A tariff is a charge a nation imposes on imports of goods and services from another nation. Certain tariffs, which are set by the government and collected by the customs authorities, stipulate a fixed fee on a specific kind of commodity. In the present era, tariffs have less of an impact on global trade. The emergence of international organisations aimed at enhancing free trade, such as the World Trade Organization, is one of the main causes of the drop (WTO). Such groups can lessen the risk of retaliatory levies and make it more difficult for a nation to impose tariffs and taxes on imported goods. As a result, nations have switched to non-tariff barriers including quotas and export restrictions. There are always issues that are taken into consideration when creating foreign policy. History and public opinion had a role in the trade conflict that erupted between South Korea and Japan. The decision-makers take this into account when determining their foreign policy toward Japan. The historical element that the South Korean side of the two countries still views the World War II era as unsolved is a frequent source of friction in the bilateral relations. The topic of compensation demands for South Korean forced labourers today still has a connection to the past. The problem of recompense for the World War II era and official acknowledgement or an apology from Japan, according to Holsti, is one of the internal elements that makes South Korea most commonly used against Japan. Every year, the public's perception of Japan's previous atrocities against South Korea likewise tends to worsen. However, internal forces still outweigh external ones, which tend to deteriorate relations between the two nations.

1. TARIFF POLICIES
INTERNATIONAL ECONOMICS
A PROJECT ON
Tariff Policies & Trade war between Japan and U.S
M.COM- BM
SUBJECT -
International Economics

2. CONTENT
Sr. No Particulars Page No.
1 Introduction 04
2 What are Tariff 06
3 Advantages and Disadvantages 06
4 PROBLEMS OF TRADE POLICIES AND MEASURES IN
INDIVIDUAL COUNTRIES
07
5 Economic Analysis 08
6 Tariff and Modern Trade 11
7 What is Trade War 12
8 Advantages and Disadvantages 12
9 Trade war between Korea and Japan 13
10 Conclusion 23
11 References: Secondary data 25

3. INTRODUCTION
WHAT IS A TARIFF?
A tariff is a tax imposed by one country on the goods and services imported from another
country. They are set by the government and collected by the customs authority, specific
tariffs specify a fixed fee on a particular type of good.
Tariffs have three primary functions:
➔ to serve as a source of revenue,
➔ to protect domestic industries,
➔ and to remedy trade distortions (punitive function).
The revenue function comes from the fact that the income from tariffs provides
governments with a source of funding.A tariff is a tax imposed by a government of a
country or of a supranational union on imports or exports of goods. Besides being a
source of revenue for the government, import duties can also be a form of regulation of
foreign trade and policy that taxes foreign products to encourage or safeguard domestic
industry. Tariffs are among the most widely used instruments of protectionism, along with
import and export quotas.
Tariffs can be fixed or variable. Taxing imports means people are less likely to buy them
as they become more expensive. The intention is that they buy local products instead,
boosting their country's economy.
Some of the most important types of tariff are as follows;
● Flat Demand Rate tariff.
● Straight-line Meter rate tariff.
● Block meter Rate tariff.
● Two-part tariff.
● Power factor tariff.
● Seasonal rate tariff.
● Peak load tariff.
● Three-part tariff
A further problem associated with customs unions is that negotiations regarding the
setting of common tariff levels can be very complex and costly, both in terms of time and
the use of resources. Inevitably there are exceptions and ‘sensitive’ products, where
members find it difficult to relinquish control over a key resource. This leads to lengthy

4. negotiations and trade offs, the greater the number of countries in a customs union, the
lengthier the period of negotiation. This problem is generally associated with customs
unions between developing countries, though it has become relevant to likely Brexit
negotiations. Exemptions for particular goods or countries may reintroduce the problem
of trade deflection, which a customs union is designed to remove.
The import duties or import tariffs are levied upon the goods originating from abroad and
scheduled for the home country. Sometimes a country may also resort to what is called as
a transit duty. It is imposed upon the goods originating in the foreign country and
scheduled for a third country crossing the borders of the home country. Governments may
impose tariffs to raise revenue or to protect domestic industries, especially nascent ones
from foreign competition. By making foreign-produced goods more expensive, tariffs can
make domestically produced alternatives seem more attractive. Governments that use
tariffs to benefit particular industries often do so to protect companies and jobs. Tariffs
can also be used as an extension of foreign policy as their imposition on a trading
partner's main exports may be used to exert economic leverage.
The WTO bans in principle the use of quantitative restrictions as a means of protecting
domestic industries but does allow tariffs to be used for this purpose. 3 The cost of
protecting domestic industry comes in the form of a general reduction in the protecting
country’s economic welfare and in the welfare of the world economy at large, but tariffs
are still considered to be more desirable than quantitative restrictions.

5. Average Tariff Rates;
Japan U.S E.C CANADA
All goods: Simple average bound rate
(1999) Simple average applied rate
(1996)
4.8%
6.7%
3.8%
6.2%
7.2%
9.5%
5.0%
9.2%
Industrial goods: Import-weighted
average applied rate(1999)
1.5% 3.6% 3.6% 4.8%
ADVANTAGES AND DISADVANTAGES
Advantages
1. For some governments, particularly in the developing world, tariffs provide a
significant source of government revenues.
2. Every country in the world, including the United States, maintains high tariffs on
at least a handful of products for which domestic producers are thought to be
vulnerable to foreign competition. This so-called tariff protection is typically
imposed early in an industry’s life or at moments of weakness or decline, when the
threat from more efficient foreign producers is thought to be particularly severe.
3. Governments use import restrictions to protect domestic health or safety. A
government sometimes bans all imports of a particular good when it has reason to
believe it could harm public safety or health.
4. Governments also restrict imports and exports for political reasons. This kind of
governmental restriction on trade is called a sanction.Countries wishing to punish
or influence the behavior of another country for human rights violations or for an
act of aggression.
Disadvantages
1. One of the cornerstones of macroeconomics is that individuals, businesses
and governments will avoid a tax. A reduction in trade causes producers to
make less of their product which could mean workers losing jobs in the
producing country.

6. PROBLEMS OF TRADE POLICIES AND MEASURES IN
INDIVIDUAL COUNTRIES
In this section we consider problems in the trade policies and measures of individual
countries in light of the discussion above. We look both at measures that clearly violate
the WTO and at measures that are within the scope of WTO rules but nonetheless have a
detrimental impact on trade. Chief among the measures considered are high tariff rates
and low bound rates.
We also touch upon examples of voluntary reductions in effective tariff rates by
individual countries when the evidence is clear and discussion is warranted. High tariffs,
low percentage of bound items, and tariff hikes (within bound rates) are not, strictly
speaking, “unfair trade policies and measures in violation of WTO rules,” but they
nevertheless have a detrimental impact on trade when they are resorted to too easily or
too often. In light of the goals of the WTO, which are to promote free trade, these are
actions that countries should remedy voluntarily
1. European Union
Even after implementation, the EU tariff rate on some trucks remains high at 22%
2. United States
After the implementation. woolen fabrics (maximum 25%), glassware (maximum
38 %), some ceramics (maximum 25 %), and trucks (maximum 25 %).
3. Korea
After the implementation. Korea tariffs on some items are the
internationally-competitive “textiles and textile products” sector will have, on
average, high tariffs (between 16.3% and 35%). In addition, there will be high
tariffs on some items such as automobiles (maximum 80%)Korea should be in a
position to promote free-trade as a developed country, further steps toward trade
liberalization is expected.
4. Australia
Australia Tariffs on non-agricultural products remain at a high level after the
implementation. Items such as certain clothes (maximum 55 %), automobiles

7. (maximum40 %), electrical machinery (maximum 23%), and glass (maximum 23
%) have high tariffs
5. Indonesia
This improved Indonesia’s bound rate to 92 % of its tariff items, a development
that Japan welcomes. However, the bound tariff rates for the vast majority of items
remain extraordinarily high, at levels of 30-40 %.
6. Canada
Economic Analysis?
Typical analyses find that tariffs tend to benefit domestic producers and government at
the expense of consumers, and that the net welfare effects of a tariff on the importing
country are negative due to domestic firms not producing more efficiently since there is a
lack of external competition.Therefore, domestic consumers are affected since the price is
higher due to high costs caused due to inefficient productionor if firms aren't able to
source cheaper material externally thus reducing the affordability of the products.
Opposition to all tariff aims to reduce tariffs and to avoid countries discriminating
between differing countries when applying tariffs. The diagrams at right show the costs
and benefits of imposing a tariff on a good in the domestic economy.
Imposing an import tariff has the following effects, shown in the first diagram in a
hypothetical domestic market for televisions:
● Price rises from world price Pw to higher tariff price Pt.
● Quantity demanded by domestic consumers falls from C1 to C2, a movement
along the demand curve due to higher price.
● Domestic suppliers are willing to supply Q2 rather than Q1, a movement along
the supply curve due to the higher price, so the quantity imported falls from
C1-Q1 to C2-Q2.
● Consumer surplus (the area under the demand curve but above price) shrinks
by areas A+B+C+D, as domestic consumers face higher prices and consume
lower quantities.
● Producer surplus (the area above the supply curve but below price) increases
by area A, as domestic producers shielded from international competition can
sell more of their product at a higher price.

8. ● Government tax revenue is the import quantity (C2-Q2) times the tariff price
(Pw - Pt), shown as area C.
● Areas B and D are deadweight losses, surplus formerly captured by consumers
that now is lost to all parties.
The overall change in welfare = Change in Consumer Surplus + Change in Producer
Surplus + Change in Government Revenue = (-A-B-C-D) + A + C = -B-D. The final state
after imposition of the tariff is indicated in the second diagram, with overall welfare
reduced by the areas labeled "societal losses", which correspond to areas B and D in the
first diagram. The losses to domestic consumers are greater than the combined benefits to
domestic producers and government.

9. Tariffs and Modern Trade
The role tariffs play in international trade has declined in modern times. One of the
primary reasons for the decline is the introduction of international organizations designed
to improve free trade, such as the World Trade Organization (WTO). Such organizations
make it more difficult for a country to levy tariffs and taxes on imported goods, and can
reduce the likelihood of retaliatory taxes. Because of this, countries have shifted to
non-tariff barriers, such as quotas and export restraints.
Organizations like the WTO attempt to reduce production and consumption distortions
created by tariffs. These distortions are the result of domestic producers making goods
due to inflated prices, and consumers purchasing fewer goods because prices have
increased.
Since the 1930s, many developed countries have reduced tariffs and trade barriers, which
has improved global integration and brought about globalization. Multilateral agreements
between governments increase the likelihood of tariff reduction, while enforcement of
binding agreements reduces uncertainty.

10. What Is a Trade War?
A trade war happens when one country retaliates against another by raising import tariffs
or placing other restrictions on the other country's imports.
Trade wars can commence if one country perceives that a competitor nation has unfair
trading practices. Domestic trade unions or industry lobbyists can pressure politicians to
make imported goods less attractive to consumers, pushing international policy toward a
trade war. Also, trade wars are often a result of a misunderstanding of the widespread
benefits of free trade.
Trade wars are usually considered a side effect of protectionism. Protectionism refers to
government actions and policies that restrict international trade. A country will generally
undertake protectionist actions to shield domestic businesses and jobs from foreign
competition.
Advantages and Disadvantages of a Trade War
Pros
Protects domestic companies from unfair
competition
Increases demand for domestic goods
Promotes local job growth
Improves trade deficits
Punishes nation with unethical trade
policies
Cons
Increases costs and induces inflation
Causes marketplace shortages, reduces
choice
Discourages trade
Slows economic growth
Hurts diplomatic relations, cultural
exchange

11. Trade war between Korea and Japan
Japan's victory in the first war China-Japan (1894-1895) and Russo-Japan (1904-1905), is
a momentum that makes Japan as a new imperialist power in East Asia and increasingly
pushes Japan to expand into various countries in. Japan's expansion into South Korea is
one of them. At the time of Japan's expansion into South Korea, there were many injuries
to the people of South Korea today. It is like Jugun Ianfu or what is called in English in
comfort women. This is worsen by the lack of initiative from the Japanese government to
recognize the involvement of the Japanese military in the comfort women system and
take responsibility for victims of comfort women in South Korea. Japan actually
acknowledged the involvement of the Japanese military in the comfort women system in
1993 in a statement called the Kono Statement, however, due to the lack of follow-up
from the statement, as well as the subsequent Japanese government which was
inconsistent in defending the statement, South Korean people's demands for the Japanese
government related to the issue of comfort women continues to roll. The problem is not
yet resolved for comfort women, South Korea again demanded Japan to pay
compensation to the people of South Korea who were treated as forced laborers during
the 1910-1935 war era. The forced laborers did not receive wages or a decent place to
live in the war era. Workers are exploited by Japan to build Japanese instruments of war.
Many forced workers also even died while working. This dark history led governments to
demand that Japan pay compensation to former forced laborers who were South Korean
people.
As KJ Holsti said that the state is a social institution in which there are two areas within
it, so that international policy produced by the two countries comes from two factors
namely internal and external. In this case, the internal factor that pushed South Korea's
policy to demand compensation for forced labor carried out by Japan was public opinion.
This can be seen from the previous cases, namely the jugun ianfu case since January 1992
every Wednesday in front of the Japanese embassy in South Korea the people of South
Korea expressed their disappointment and demands against the Japanese government.
Victims of "comfort women" in South Korea held a weekly demonstration. This
demonstration then reached its peak in 2011, where demonstrators built a statue
symbolizing comfort women right across the Japanese embassy in South Korea, which
then attracted a strong reaction from the Japanese government. However, with such
public encouragement, the South Korean government cannot do anything about it.After
many of these public demands, the South Korean government has so far demanded Japan
to pay compensation and apologies. But so far the Japanese have never officially
apologized to victims during the South Korean war . In this case of forced labor, this

12. demand has been going on since 1997 in Japan. However, the suit was dismissed by a
Japanese court in that year because it was deemed that the 1965 diplomatic normalization
agreement was regrettable. In 2012 the South Korean Constitutional Court sent the file
back to court and said that Japan's decision was against the South Korean constitution and
international legal norms. South Korea's relations with Japan were again heated up that
year. Seeing the increasing antipathy of the South Korean people towards Japan, South
Korean President Park Geun-hye, who was officially inaugurated in early 2013, stressed
from the beginning of his administration, that Japan must be able to resolve historical
conflicts in order to rebuild bilateral relations that forward-looking with South Korea
(Glosserman & Synder, 2015). In July 2013 a South Korean court ordered Mitsubishi
Heavy Industries to compensate five South Koreans who were forced to work in
company factories during the Japanese colonial period in Korea, which ended in World
War II.
Busan High Court ordered the company are to pay $ 71,800 to each of the five Koreans.
That was the second decision of a Japanese company in July 2013 . Earlier , the Seoul
High Court ordered Nippon Steel and Sumitomo Metal Corporation to pay $ 89,800 to
each of the four South Korean plaintiffs to compensate them for forced labor. Nippon
Steel and Mitsubishi each said they were planning to appeal. The Busan court said in its
ruling that Mitsubishi forced South Korean plaintiffs to work hard in poor conditions in
Hiroshima but failed to pay wages, and did not provide shelter or proper food after
dropping an atomic bomb there in 1945. The five plaintiffs have now died and their
families they represent them in court. The two decisions are the first to benefit South
Korea in a 16-year legal battle carried out in Japan and South Korea, and they can file
similar lawsuits from other victims or their families. At least 1.2 million Koreans were
forced to work for the Japanese war effort. Around 300 Japanese companies still in
operation are believed to have used forced labor during the colonial period from
1910-1945 (Glosserman & Synder, 2015).
South Korean demands on new companies gained results in October 2018. The Seoul
Supreme Court ruled that a Japanese company must compensate four South Koreans for
forced labor during World War II. The Supreme Court in Seoul ordered Nippon Steel &
Sumitomo Metal Corp to pay 100 million won to each of the four plaintiffs. Lee
Choon-shik, the only surviving plaintiff, got the decision after waiting more than 5 years
for the trial.
At the hearing the South Korean court rejected Nippon Steel & Sumitomo Metal's
attitude that the issue of compensation for forced labor had been resolved by the 1965
agreement. The court also rejected the company's argument that it was a different entity

13. from steelmakers who forced South Koreans to work during the war. The South Korean
Supreme Court stated that the steel company was formed from the merger of several
companies after the war. President Moon Jae-in , who once represented South Korean
forced labor as a lawyer in the 2000s, said after taking office last year that the 1965
agreement could not prevent individuals from exercising their right to receive
compensation. In the past, both governments have stated that the issue of forced labor
compensation has been resolved by the agreement. However President Moon Jae-in also
questioned the validity of the 2015 agreement with Japan which was negotiated by the
conservative government of South Korea before to compensate South Korean women
who were forced into sexual slavery by the Japanese wartime military. Many South
Koreans believe that Seoul received too little in the agreement and called for the
dissolution of a foundation known as the Asian Women 's Fund (AWF) in Seoul that was
established to support victims with 1 billion yen ($ 9 million) ) provided by Japan.
From the response of President Moon Jae-in above it is very clear that the policy issued
to sue Japan to pay compensation to South Korean forced workers was also motivated by
public opinion which often called for compensation for crimes committed by Japan.
Although there are indeed other factors that encourage this, but from the explanation
above it is very clear that public opinion is also one of the factors that determine in
making a foreign policy. This was the beginning of Japan's restrictions on exports to
South Korea. Relations between the two countries have also worsened that the two
countries are boycotting trade products and removing the white list of export partners.
The relations between the two countries are indeed closely related to history in the past.
This also affects existing public opinion.
The Japan–South Korea trade dispute is an ongoing economic conflict, the world's third-
and tenth- (eleventh- in 2019) largest national economies, respectively. It has also been
referred to as the Japan–South Korea economic war.
Japan and South Korea are some of the world's largest economies, ranking 3rd and 11th,
respectively, in terms of GDP. South Korea, the largest memory chip producer in the
world, and Japan, the largest supplier of crucial materials in chip production, have so far
served as the cradle for technological products such as smartphones and personal
computers.
South Korea is home to Samsung Electronics and SK Hynix, companies that together
produce two-thirds of the world's memory chips.

14. In Japan, 3 companies (JSR Corporation, Showa Denko, and Shin-Etsu Chemica as well
as Kanto Denka Kogyo) produce 90% of the world's Fluorinated polyimide and
Photoresist,
South Korea imports :
● 94% of Fluorinated polyimide,
● 92% of Photoresists, and
● 44% of Hydrogen Fluoride from Japan.
According to data from Korea International Trade Association.On the other hand, Japan
had export dependency on South Korea for these three materials at 22.5%, 11.6%, and
85.9%, respectively.
The two countries established diplomatic relations in December 1965, following the
signing of the normalization treaty in June of the same year when Japan recognized South
Korea as the only legitimate government of the whole Korean Peninsula. As the relations
continued to develop over the next few decades, both countries became two of the
strongest allies of the United States in Asia, to counter the influence of China, Russia,
and North Korea.However, their relations have been negatively impacted by many
ongoing disputes.
In July 2019, the Japanese government imposed export restrictions on various goods to
South KoreaLow international trade costs have significantly contributed to making the
semiconductor industry’s supply chain globally expansive. In the past three decades,
global and regional trade policies have generally encouraged tariff and non-tariff related
trade costs related to the semiconductor supply chain to remain low and predictable. For
example, the 1996 World Trade Organization (WTO) Information Technology Agreement
(ITA) effectively zeroed out tariffs for 97 percent of world trade in information
technology products, including most semiconductors.
The trade war between Japan and South Korea is now entering a new phase. South Korea
is currently counteracting by boycotting goods originating from Japan, such as FMCG
(fast-moving consumer goods) companies, fast retaling and automotive. Japan itself has
now downgraded the status of South Korea which was originally included in group A or
White List Countries or Preferred Trade Partner List Countries into group B, namely
countries and regions participating in international export control regimes and satisfying
certain conditions (Excluding those in group A) . As we know, this trade war was
preceded by restrictions on exports by Japan to South Korea. In July, Japan imposed
tighter controls on the export of three raw materials in chips and smart phone screens to
South Korea.

15. The materials are photoresists used in the semiconductor industry, hydrogen fluoride as a
material for making chips and fluorinated polymides that are used as materials for
making smartphone screens. These goods are very important for the industry in South
Korea, especially in the smartphone industry, thus making South Korea furious about the
Japanese action. The issue that will be raised is how history can shape decision-making in
relations between Japan and South Korea, leading to a trade war like today. Relations
between Japan and South Korea are very close to what happened in the past. Even today,
South Korea still voiced its past suffering caused by Japan and raised tension between the
two countries. South Korea plans to file complaints over tightening Japanese export
controls to the World Trade Organization (WTO). South Korea accuses Tokyo of having
"political motivation" and "discrimination" in the two countries' growing conflict and
rooted in wartime history.
Japan claimed it was setting such restrictions because it believed South Korea was
leaking sensitive information to North Korea, although they did not provide details. After
South Korea vehemently denied the accusations, Japan slapped down another trade
restriction: removing South Korea from its “white list,” an index of trusted trade partners.
This would lead to even more delays in exports of items like auto parts and household
electronics to South Korea.
Needless to say, South Koreans are furious at Japan. And they’re displaying their anger
by boycotting Japanese beer and clothing brands (Uniqlo is very popular in the country),
as well as travel to the country.
The South Korean government is looking into removing Japan’s preferred trade partner
status and potentially creating a new low-tier category just to isolate the country from
future benefits, a downturn in a relationship that is already tainted by a painful history of
Japanese colonialism.
“We will never again lose to Japan.”
“As we have already warned, if Japan intentionally strikes at our economy, Japan itself
will also have to bear significant damage,” he continued.
The Korea-Japan trade war could harm the already-slowing global economy, but its
effects could run much deeper

16. The most obvious concern is the threat a trade war poses to the global tech supply chain
by delaying exports to Korea, says senior director of the Korea Economic Institute Troy
Stangarone.
That’s especially because South Korean companies: Samsung and SK Hynix provide 60
percent of the world’s DRAM memory chips, which are used in many electronics we use
every day. A shortage could affect everything from Apple iPhones to Dell laptops and
potentially slow down an already cooling global economy.
But being even more concerned about how the trade war is helping to normalize the use
of national security to justify trade policy. The trade war is also impacting the strategic
relationship
South Korea, and Japan need to address the more dire threats in the region: North Korea
and China.
In the past two weeks, North Korea carried out four missile tests, demonstrating that it
has the technology to hit Seoul if it wants to. China also needs to be monitored, to ensure
that it “plays by the rules in international affairs.”
South Korea and Japan could potentially bond over these national security threats in the
near future to put an end to their trade dispute, Goodman told me. It’s going to take more
than a few meetings, however, to smooth over decades-long historic grievances.

17. As can be seen above South Korean public opinion it is very clear that South Korean
public demands for Japan to solve their historical problems are still very high and even
tend to increase from 2018 to 2019. This is as explained by Rosenau that human
behavior, both in the form of both the individual and a complex system of society are
cumulative results from past experiences and part of the impact of stimuli that are present
in the present. Characteristics and behavior in a social system is a result of their cultural
traditions and their changing environment. The new situation, institutions, expertise, do
not necessarily replace the previous patterns that have been formed. Norma culture and
history passed down from generation to generation. This is what is called the historical
precedent used by the South Korean government in shaping its foreign policy towards
Japan. Officials or the South Korean government not only make foreign policy just to
benefit the country, but history also has a large role in making a country's foreign
policy.Public opinion on history also tends to increase when viewed from the percentage
above, namely on the issue of comfort women or wartime labor in 2016 75.7% then in
2017 75.8%, in 2018 78.1% and in 2019 84, 5% From the percentage above it can be
seen that the characteristics of the people in South Korea who are highly dependent on
their history are increasing every year. Therefore, one of the remedies that can be used by
Japan is to improve Japan's image of its history to South Korea, or make demands from
the people of South Korea such as apologizing formally or compensating victims.

18. North Korea’s Nuclear Threat: A Common Enemy?
North Korea presents opportunities and challenges for Japan-South Korea relations.
During the Cold War period, North Korea’s conventional military threat provided a clear
objective for the two countries to form an unofficial alliance through their bilateral
alliance with the United States. Even though there is no official defense treaty between
the two countries, their national defense strategy is closely related under the U.S.
contingency plan in case of major military conflicts on the Korean Peninsula. Japan will
provide important bases and logistical support for the U.S. war effort on the peninsula as
it did during the Korean War. North Korea’s weapons of mass destruction (WMD)
programs, including nuclear and missile development, provide even greater impetus for
the two countries to work together under their alliance with the United States. Unlike its
conventional military capability, North Korea’s WMD pose a direct threat to the national
security of Japan and South Korea
The North Korea nuclear issue has caused Japan and South Korea to cooperate closely in
coordinating their North Korea policy. The two countries have engaged, along with the
United States, in a series of consultations through Trilateral Coordination and Oversight
Group (TCOG) meetings. Specifically aimed to coordinate effective policy among the
three countries toward North Korea, the forum has provided a unique opportunity for
Tokyo and Seoul to consult on one of their most important foreign policy issues on a
regular basis. During his visit to Japan, Roh said cooperation between the Asian
neighbors and with the United States was vital—not least to resolve the problem of North
Korea’s nuclear ambitions. “South Korea, Japan and the United States are now
maintaining close and positive cooperative ties for the sake of the peace of the Korean
Peninsula and East Asia, and this cooperation will continue unchanged.
In particular, Japan and South Korea appear to share common security interests, the
United States in dealing with North Korea’s nuclear issue. While the United States tends
to focus on North Korea’s nuclear capability as a direct threat to its national security,
South Korea and Japan feel other major threats coming out of North Korea’s
conventional weapons and missiles that target their capitals. In addition to addressing
North Korea’s nuclear development, Tokyo and Seoul share a common interest in
preventing any kind of military conflict on the Korean Peninsula as another important
priority in their North Korea policy. This makes the two countries more cautious about
hard-line policies which, they worry, might provoke Pyongyang into a confrontational
mode. In a TCOG meeting after North Korea’s surprising admission of its secret nuclear
program in October 2002, the two countries reportedly asked the United States to not
terminate the supply of fuel oil to Pyongyang in fear of escalating nuclear confrontation

19. between the United States and North Korea.8 South Korea hopes Japan will share a
common interest in persuading the United States of the benefits of negotiation as opposed
to military confrontation. North Korea’s nuclear issue gave momentum for new
Japan-South Korea collaboration in dealing with their common national security threat.
South Korea has recently become more pragmatic and less suspicious of Japan’s
approach to North Korea. After witnessing the huge economic cost of German
unification, Seoul hopes Japan would provide much needed economic aid to and
investment in North Korea, relieving South Korea’s burden in the event of Korean
unification. Meanwhile, as Washington tended to emphasize tougher punishment on
Pyongyang’s nuclear defiance, the South Korean government welcomed Koizumi’s visit
to Pyongyang in September 2002 and Japan’s normalization effort with North Korea.
Seoul expected that such a move by Japan would help in reducing tension between
Pyongyang and Washington. This signaled an important change in South Korea’s view of
Japan’s role in Korea’s nuclear and unification issues.
How closely Tokyo and Seoul can agree on North Korea policy may have an important
impact on overall bilateral relations. Cooperation between Tokyo and Seoul in inducing
peaceful negotiations between Washington and Pyongyang would significantly improve
their bilateral relations. In addition, Japan might make important economic contributions
to North Korea’s reconstruction before and after unification. Meanwhile, Japan’s effort to
revitalize its military with regard to the North Korean threat would cause new suspicion
among South Koreans. Japan’s support for military action or blockade against North
Korea may create a strong nationalist backlash against Japan in South Korea.
Conclusion
In a foreign policy making there are always factors that are considered by policy makers.
In the case of a trade war between South Korea and Japan, the factors that influenced it
were history and public opinion. This is a consideration of the policy makers in making
foreign policy towards Japan. The historical factor that the era of World War II until now
is considered unresolved by the South Korean side of the relations between the two
countries is often heating up. Until the issue of demand for compensation of South
Korean forced workers currently still has a relationship with past history. According to
Holsti, one of the internal factors that makes South Korea most frequently used against

20. Japan is the issue of war era compensation and official recognition or apology from
Japan. Public opinion of Japan's past crimes against South Korea also tends to rise every
year. Although there are external factors that tend to worsen relations between the two
countries, but internal factors still dominate.
Although the history issue still runs deep, there is more hope for improving ties as the
two countries’ leaders are making genuine efforts to move beyond the past. With progress
in democracy as well as economic development, South Korea has gained self-confidence
and has become less obsessive about its past, and is taking a more pragmatic approach to
the history issue, which is appreciated by Japan. President Roh’s decision to forgo the
history issue during his visit to Tokyo in June 2003 should be credited as another
important step to build a stronger relationship with Japan. It will be helpful if Japan
responds with a more sensitive approach to South Korean sentiment. In particular, Japan
should make a conscious effort not to ally South Korea and China against itself due to
unscrupulous remarks occasionally made by its officials regarding the history issue. Both
Japan and South Korea have a clear common interest in working together for economic
prosperity. The FTA may prove to be a promising convergence for the two neighbors to
enhance their relationship and to solidify bilateral initiatives between Japan and South
Korea without involving the United States, which is often a dominating figure in their
foreign relations.
Indeed, North Korea creates an interesting dynamic for bilateral relations between Japan
and South Korea as well as their relations with the United States. Despite their publicly
claimed common approach to North Korea, Washington’s “punish bad behavior”
approach created tension with Seoul’s emphasis on negotiated settlement. Tokyo seems to
be caught in the middle, reflecting its strategic concern of North Korean retaliation on
one hand, and public anger over the abduction issue coupled with the importance of the
alliance with the United States on the other. If the United States insists on tougher North
Korea policy against South Korea’s wish for negotiation, Japan may have to make a
difficult choice between its commitment to the U.S.-Japan alliance and the prospect of
gaining political trust from South Korea by addressing its concerns. Yet,
military-to-military relations between Japan and South Korea will remain the weakest
link of the trilateral alliance in the anticipated future. South Korea still has strong
misgivings about Japan’s effort to normalize its defense posture and is not ready to accept
Japan’s more active role in military and international affairs. Indeed, South Korea’s
growing ties with China—backed by rapidly expanding trade. If the restructuring effort
focuses on containing China’s power by enhancing Japan’s military capability, it might
drive South Korea to take a more neutral stance, distancing itself from the alliance with

21. the United States and Japan. In sum, despite the two countries’ efforts to improve
bilateral ties, Japan-South Korea relations will remain vulnerable to challenges from
geopolitics in the region and will continue to be largely influenced by U.S. alliance
strategy.
Korea and Japan have experienced the bitter relations for a good part of the twentieth
century. However, as relations steadily improved in recent years the seemingly
impossible prospect of the two embracing in a mutual closer economic relationship may
soon be at hand. In approaching the new relationship , both have a clean slate of no other
arrangements. Hence, since the 21st century being, JApan and Korea may develop a new
forward-looking type of regionalism that can reinforce East Asian prosperity and
contribute to global economic welfare.
References
https://en.wikipedia.org/wiki/Wikipedia
https://www.thebalance.com/trade-wars-definition-how-it-affects-you-4159973#:~:text=A%20tra
de%20war%20is%20when,domestic%20industry%20and%20create%20jobs.
https://thediplomat.com/tag/japan-south-korea-trade-war/