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Geopolitics of trade frictions between #Japan and #SouthKorea

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On 4 July, the Japanese government announced tighter controls on the export of semiconductor materials to South Korea and threatened to exclude South Korea from the 'white list' of trusted trade partners. The move could hit South Korea's economy hard, as South Korea's economy relies heavily on the manufacturing industry, write Chen Gong and Yu (Tony) Pan.

Ever since the Korean economy took off, the manufacturing industry represented by Samsung, LG, SK, and other enterprises have made up an important part of South Korea's economy. South Korea's semiconductor exports totaled KRW 45.0294 trillion (about RMB 263.2 billion) in the first five months of this year. On the other hand, Japan will also suffer in an eventual trade dispute, but its losses are negligible compared with South Korea's. Crucially, South Korea's manufacturing sector is heavily dependent on Japanese semiconductor materials.

In addition, Japan controls more than 70% of the global supply for the three semiconductor materials under control. If the sanctions are prolonged, more than half of South Korean companies will become unsustainable. South Korea's economy could be gravely affected, while Japan could regain its global dominance in semiconductor manufacturing.

The recent trade dispute between Japan and South Korea can be seen as Japan's unilateral strike against South Korea, and the subsequent tough attitude displayed by the Japanese side shows that Japan's recent measures are not merely based on economic reasons, but also functions to express its dissatisfaction in Japan–South Korea relations through economic means. In fact, Japan and South Korea have long been plagued by historical issues.

This is not the first time the Japanese government expressed its dissatisfaction with the South Korean government through economic means. In fact, it came as early as 2015, when the issue of comfort women and Dokdo Island caused high tensions to flare up between Japan and South Korea. As a result of these tensions, the Abe administration suspended a 14-year currency exchange program between the two countries.

Differing from the past, the two governments have restrained their previous responses due to the common geostrategic needs and the guidance of the United States as the leader of the alliance., but that compromising attitude is yet to be seen in the recent trade dispute. The reason for this change is that, in addition to existing conflicts in bilateral relations, Japan is increasingly dissatisfied with the current geopolitical development of north-east Asia.

Firstly, Japan and South Korea have increasingly divergent interests over the North Korean nuclear issue. For the Abe administration, the North Korean nuclear issue is an important opportunity to normalize Japan's defense and re-establish Japan as a great power in Northeast Asia. However, since Japan cannot directly participate in any possible combat operations against North Korea and it is unlikely to become the target of North Korea’s proactive attacks, Japan can be objectively viewed as not being directly related to the North Korean issue. Compared with the North Korean nuclear issue, the Japan-North Korea relations are more affected by the hostage issue.

In this case, Japan can only get in by tying its policies tightly with U.S. policies. Therefore, Japan was once America's biggest supporter of the "extreme pressure" policy. Yet preventing war is clearly more important to the South Korean government than forcing North Korea to abandon its nuclear program, which explains its ambivalence about America's "extreme pressure" policy. Moreover, when it comes to how to respond to China's rise, the South Korean government shows a very different attitude towards Japan's close proximity to the United States, even considering the impact of THAAD issue and the recovery of China-Japanese relations since 2019. Without the influence of historical factors, the rise of China mean more opportunities than challenges for South Korea.

Secondly, with the recovery of U.S.-North Korea relations, China-North Korea relations, and even the Russia-North Korea relations in 2018, Japan has been increasingly marginalized on the North Korean nuclear issue. Japan is still trying to keep pace with the U.S. policy after a change in U.S. policy towards North Korea in 2018, but so far it has had little success. In the frequent diplomatic activities of North Korean leader Kim Jong-un in 2018, the leaders of Japan and North Korea became the only leaders among the Six-Party Talks that did not meet each other. Although Shinzo Abe has repeatedly said he would meet with Kim "without any preconditions", the latter has apparently shown little interest in such a meeting.

The reason is that North Korea understands that resolving the "hostage issue" between Japan and North Korea does not help much in obtaining economic assistance from the Japanese side without thoroughly resolving the relations between North Korea and the U.S. On the contrary, Japan's attitude towards North Korea will no doubt change as long as the U.S.-North Korea relations are resolved.

In addition to the negative response from North Korea, the Trump administration's attempts to address the issue directly through leadership-level diplomacy have made the Abe administration feel increasingly marginalized in the North Korean issue. For example, Trump announced to suspend the joint military drills with South Korea after the first summit with Kim Jung-un without informing Tokyo in advance, which eventually had a significant impact on the Japanese political circles.

Thirdly, Japan is increasingly dissatisfied with the fact that the United States cannot continue to play an active leadership role in the region. As the leader of the Northeast Asian alliance system, the United States once acted as a "mediator" between Japan and South Korea, avoiding the escalation of the conflict between the two sides. The Trump administration is notably less enthusiastic on the issue than the Obama administration. This is partly because America lacks a clear vision of its own position in the Asia Pacific Alliance. Although the United States has emphasized the importance of the Asia Pacific Alliance system in several government documents and even proposed the idea of integrating bilateral alliances, there were only a few policies have been adopted.

On the contrary, Trump has recently mentioned that the United States intends to withdraw from the "US-Japan Security Alliance", which made the Japanese government and society very worried about such an eventuality. Some Japanese scholars even said that Trump's statement on the U.S.-Japan Security Alliance was comparable to the "Black Ship" incident before the Meiji Restoration. Japan is increasingly worried about the future geopolitical pattern of Northeast Asia. Given that, the recent trade friction between Japan and South Korea could be deemed as the manifestation of this concern.

Final analysis conclusion

The trade friction between Japan and South Korea is not simply an economic issue. It is essentially a way for Japan to express its dissatisfaction on a broader level through economic means. It also reflects the huge influence of historical issues still lurking behind the shadows in relations between Japan and South Korea, as well as the trend of Japanese foreign policy. Even if the trade dispute is resolved, Japan's discontent will likely manifest itself in other ways, and could possibly change the geopolitical pattern in Northeast Asia.

Founder of Anbound Think Tank in 1993, Chen Gong is now ANBOUND chief researcher. Chen Gong is one of China’s renowned experts in information analysis. Most of Chen Gong’s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.

Yu (Tony) Pan serves as the associate research fellow and the research assistant of Chen Gong, founder, chairman, and the chief researcher of ANBOUND. He obtained his master’s degree at George Washington University, the Elliott School of International Affairs; and his bachelor’s degree in University of International Business and Economics in Beijing. Pan has published pieces in various platforms domestically and internationally. He currently focuses on Asian Security, geopolitics in Indo-Pacific region and the US-Sino Relations.

EU

Will the Kremlin go beyond election interference? 

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Once the Kremlin is persuaded that Joe Biden will become the US’s next president, it may go for the jugular. Already today, not election manipulation, but triggering civil conflicts in the United States could be the main aim of Moscow’s mingling in American domestic affairs, write Pavlo Klimkin and Andreas Umland.

Over the past 15 years, the Kremlin has played with politicians and diplomats of, above all, Russia’s neighbors, but also with those of the West, a hare and hedgehog game, as known from a German fairy tale. In the Low Saxon fable’s well-known race, the hedgehog only runs a few steps, but at the end of the furrow he has placed his wife who looks very much like him. When the hare, certain of victory, storms in, the hedgehog's wife rises and calls out to him “I'm already here!” The hare cannot understand the defeat, conducts 73 further runs, and, in the 74th race, dies of exhaustion.

Ever since Russia’s anti-Western turn of 2005, governmental and non-governmental analysts across the globe have been busy discussing and predicting Moscow’s next offensive action. Yet, in most cases, when the world’s smart “hares” – politicians, experts, researchers, journalists et al. – arrived with more or less adequate reactions, the Russian “hedgehogs” had already long achieved their aims. Such was the case with Russia’s invasion of Georgia’s South Ossetia and Abkhazia in 2008, “little green men” on Ukraine’s Crimea in 2014, hackers inside Germany’s Bundestag in 2015, bombers over Syria since 2015, cyber-warriors in the US elections of 2016, or “chemical” assassins at England’s Salisbury in 2018.

Across the world, one can find hundreds of sensitive observers able to provide sharp comments on this or that vicious Russian action. For all the experience accumulated, such insights have, however, usually been provided only thereafter. So far, the Kremlin’s wheeler-dealers continue to surprise Western and non-Western policy makers and their think-tanks with novel forays, asymmetric attacks, unorthodox methods and shocking brutality. More often than not, Russian imaginativeness and ruthlessness become sufficiently appreciated only after a new “active measure,” hybrid operation or non-conformist intervention has been successfully completed.

Currently, many US observers – whether in national politics, public administration or social science – may be again preparing to fight the last war. Russian election interference and other influence operations are on everybody’s mind, across America. Yet, as Ukraine has bitterly learnt in 2014, the Kremlin only plays soft ball as long as it believes it has some chance to win. It remains relatively moderate as long as a possible loss will – from Moscow’s point of view – only be moderately unpleasant. Such was the case, during Russia’s interference into the 2016 presidential elections in the US.

The Ukrainian experience during the last six years suggests a far grimmer scenario. At some point during the Euromaidan Revolution, in either January or February 2014, Putin understood that he may be losing his grip on Ukraine. Moscow’s man in Kyiv, then still President of Ukraine Viktor Yanukovych (though very much assisted by Paul Manafort), may be kicked out by the Ukrainian people. As a result, Russia’s President drastically changed track already before the event.

The Kremlin’s medal awarded to the anonymous Russian soldiers who took part in the annexation of Crimea lists the date of 20 February 2014, as the start of the operation to occupy a part of Ukraine. On that day, pro-Russian Ukrainian President Yanukovych was still in power, and present in Kyiv. His flight from Ukraine’s capital one day later, and ousting, by the Ukrainian parliament, on 22 February 2014, had not yet been clearly predictable, on 20 February 2014. But the Kremlin had already switched from merely political warfare against Ukraine to preparing a real war – something then largely unimaginable for most observers. Something similar may be the case, in Moscow’s approach to the US today too.

To be sure, Russian troops will hardly land on American shores. Yet, that may not be necessary. The possibility of violent civil conflict in the United States is today, in any way, being discussed by serious analysts, against the background of enormous political polarization and emotional spikes within American society. As in Putin’s favorite sports of Judo – in which he holds a Black Belt! – a brief moment of disbalance of the enemy can be used productively, and may be sufficient to cause his fall. The United States may not, by itself, become ripe for civil conflict. Yet, an opportunity to push it a bit further is unlikely to be simply missed by industrious hybrid warfare specialists in Moscow. And the game that the Russian “hedgehogs” will be playing may be a different one than in the past, and not yet be fully comprehensible to the US’s “hares.”

Hillary Clinton was in 2016 a presidential candidate very much undesired, by Moscow, as America’s new president. Yet today, a democratic president is, after Russia’s 2016 hacking of the Democratic Party’s servers and vicious campaign against Clinton, a truly threatening prospect for the Kremlin. Moreover, Joe Biden was, under President Obama, responsible for the US’s policy towards Ukraine, knows as well as likes the country well, and is thus especially undesirable for Moscow.

Last but not least, Moscow may have had more contacts with Trump and his entourage than the American public is currently aware of. The Kremlin would, in such a case, even more dislike a Biden presidency, and a possible disclosure of its additional earlier interventions, in the US. The stakes are thus higher, for the Kremlin, in 2020 than in 2016. If Trump has no plausible chance to be elected for a second term, mere election interference may not be the issue any more. Moscow may already now implement more sinister plans than trying to help Trump. If Putin thinks that he cannot prevent Biden, the Kremlin will not miss a chance to get altogether rid of the US, as a relevant international actor.

Pavlo Klimkin was, among others, the Ukrainian Ambassador to Germany in 2012-2014 as well as minister of foreign affairs of Ukraine in 2014-2019. Andreas Umland is a researcher at the Ukrainian Institute for the Future in Kyiv and Swedish Institute of International Affairs in Stockholm.

All opinions expressed in the above article are those of the authors alone, and do not reflect any opinions on the part of EU Reporter.

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Defence

USEUCOM demonstrates readiness to support NATO in Exercise Austere Challenge

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US European Command (USEUCOM) leaders, strategists, planners and operators joined forces with their NATO counterparts in exercise Austere Challenge 2021 (AC21) to practice a co-ordinated response to a fictional major crisis this week. While the exercise was conducted virtually to protect the health of the participants and our communities from COVID-19 more than 4,000 military and civilian personnel participated.

The exercise brought together USEUCOM and its components who joined Joint Forces Command-Brunssum and Naval Striking and Support Forces NATO for the weeklong, computer-based, biannual command post exercise, which culminated today (23 October).

"We are looking forward to drawing on the lessons learned we have from this exercise as we prepare for future activities together," said German Gen. Jörg Vollmer, commander of Allied Joint Force Command Brunssum. AC21 is part of an exercise series planned and executed since the 1990s and focused upon training combatant command co-ordination, command and control and the integration of capabilities and functions across USEUCOM’s headquarters, its component commands, US interagency and NATO.

The exercise was linked globally to other US combatant command exercises, including US Strategic Command and US Space Command’s Exercise Global Lightning 2021 and US Transportation Command’s Turbo Challenge 2021. “Exercises like AC21 prepare the USEUCOM staff to respond to crises in a timely and well-coordinated manner with our NATO Allies, which ultimately supports regional stability and security,” said US Army Maj. Gen. John C. Boyd, USEUCOM’s director of training and exercises.

While the ongoing pandemic forced a variety of USEUCOM exercises to be modified or canceled this year, training and partnership-building has carried on. “We remain postured and ready to support NATO against any enemy or threat – be it a military crisis or an invisible virus,” Boyd added. “Together on innumerable instances, the US and NATO have demonstrated a strong, unbreakable working relationship to counter any threat to the alliance. AC21 is yet another example of the strength and solidarity of the NATO alliance and USEUCOM’s contributions to Europe’s collective defense.”

About USEUCOM

US European Command (USEUCOM) is responsible for US military operations across Europe, portions of Asia and the Middle East, the Arctic and Atlantic Ocean. USEUCOM is comprised of approximately 72,000 military and civilian personnel and works closely with NATO Allies and partners. The command is one of two US forward-deployed geographic combatant commands headquartered in Stuttgart, Germany. For more information about USEUCOM, click here.

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Brexit

President Sassoli to EU leaders: Help get the budget negotiations moving again

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President Sassoli with French President Macron and German Chancellor Merkel at the 15 October summit © KENZO TRIBOUILLARD / POOL / AFP 

In a speech at the EU summit on 15 October, Parliament President David Sassoli insisted it is now up to EU leaders to unlock the stalled negotiations on the 2021-2027 budget.

President Sassoli urged the EU heads of government to update the negotiating mandate they have given to the German Council presidency to make agreement on the EU long-term budget possible.

He noted that Parliament’s negotiators have asked for an additional €39 billion for key EU programmes that benefit Europeans and promote a sustainable recovery. “This is a paltry sum when set against an overall package worth €1.8 trillion, but one which would make an enormous difference to the citizens who will benefit from our common policies,” President Sassoli said, referring to the total amount of the seven-year budget and the Covid-19 recovery plan.

Sassoli noted that if Parliament’s compromise proposal is accepted by the Council, the budget spending ceiling will have to be raised by only €9 billion and this will bring the ceiling of those programmes to exactly the same level of spending as in the 2014-2020 period in real terms.

He said that the interest payments for the debt that the EU plans to issue to finance the recovery must be counted on top of the programme ceilings so as not to further squeeze the financing of these policies. The recovery plan “is an extraordinary commitment, and therefore the cost of the interest should be treated as an extraordinary expense as well. It should not come down to a choice between these costs and the [budget] programmes”.

The President also stressed the need for a binding timetable for the introduction of new types of budget revenue over the coming years and for flexible provisions in the budget to finance unforeseen future events.

Sassoli defended Parliament’s demand for ambitious emission reduction targets. “We must reduce greenhouse gas emissions by 60% by 2030. We need a target, which acts as a bright beacon on the path to climate neutrality. Protecting the environment means new jobs, more research, more social protection, more opportunities.”

“We should use the economic stimuli provided by public institutions to radically change our growth models while guaranteeing a fair transition that works for us and for future generations. No one should be left behind,” he added.

Commenting on the ongoing negotiations on future EU-UK relations, Sassoli expressed concern about the lack of clarity from the UK side. “I hope that our UK friends use the very narrow window of opportunity that remains to work constructively towards overcoming our differences,” he said, adding that the UK should honour its commitments and remove the controversial provisions in its internal market act.

Sassoli also called for a de-escalation of tensions with Turkey. “The Turkish rhetoric is growing increasingly aggressive and the country's intervention in the Nagorno-Karabakh conflict is certainly not helping matters. Now is the time for the EU to fully support German mediation efforts, to stand united and speak with one voice,” he said.

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