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Korean firms see no major breakthrough in Japan ties

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South Korean businesses see no major breakthroughs in Japan ties. YONHAP NEWS AGENCY

Korean firms see no major breakthrough in Japan ties

Most South Korean companies trading with Japan were pessimistic over the possibility of the two neighbouring countries improving their chilled ties anytime soon, despite the urgent need to do so, an industrywide survey found on November 29.

According to the survey conducted by the Korea Chamber of Commerce and Industry (KCCI), 92.6 per cent of 202 domestic companies agreed that bilateral economic cooperation was absolutely necessary to facilitate trade between the two nations.

But the majority of the firms said they were sceptical about any breakthrough in ties, long strained over wartime history and trade disputes.

Of the companies that responded, 80.7 per cent said bilateral relations will not improve and 6.4 per cent said they are likely to worsen. Only 12.9 per cent said there is a possibility the ties could improve.

Amid a prolonged diplomatic feud between the two countries, companies said there was a need for economic cooperation between the two countries so that both sides could benefit from enhanced trade and investment.

The major impediment that 42.1 per cent of the companies pointed to were issues stemming from Tokyo’s 1910-1945 colonial rule of the Korean Peninsula.

Other issues cited were the Covid-19 pandemic, trade regulations, mutual competition as rivals and the deterioration of national consciousness between the two countries.

Of those surveyed, 52 per cent said the two countries must prioritise trade recovery and revitalisation, such as efforts to maintain a free trade agreement between the two nations, and stressed the need to expand the agreement not just between South Korea and Japan, but also among South Korea, China and Japan.

In terms of the difficulties they faced in trade with Japan, 24.5 per cent cited operational difficulties due to Covid-19. Another 20.4 per cent pointed to export decreases, 14.3 per cent to distribution cost increases and 12.2 per cent to delayed logistics.

Firms also urged the government to play a more active role in bilateral ties through diplomacy normalisation (25.5 per cent), logistics support (25.5 per cent), coming up with an agenda for cooperation (12.3 per cent) and revitalisation of private interchange (11 per cent).

KCCI international trade division vice-president Kang Seog-gu said: “Companies from Korea and Japan, which suffer from a double whammy of Covid-19 and diplomatic conflict, are also facing challenges to respond to the reorganisation of the global supply chain in the future.

“The private sector needs to restore the foundation for Korea-Japan cooperation and make efforts to communicate with each other.”

THE KOREA HERALD/ASIA NEWS NETWORK

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