Korea-Japan ties need an economic security partnership

Cho Yang-hyun

The author is a professor at the Korea National Diplomatic Academy and head of the Japan Relations Division of Reset Korea.

The U.S. and Chinese leaders met at the White House on Sept. 24 and extended their trade truce by two months, until Jan. 10, without addressing structural disputes over rare earths and Taiwan. The Iran war, which began in late February, has continued for more than seven months without resolving instability in the Strait of Hormuz. Amid ceasefires without lasting settlements, Korea and Japan face growing uncertainty over energy, critical minerals and advanced technology.

Their fifth economic security dialogue, held in Tokyo on Sept. 1, shows that communication channels exist. What is needed now is not another agenda item but political leadership to unite scattered cooperation into a coherent strategy.

Korea-Japan relations have repeatedly been redefined through leadership decisions when the international order changed. Normalization in 1965, encouraged by Washington during the Cold War, subordinated historical grievances to anti-communism and industrialization, settling claims through economic cooperation. The 1998 declaration by President Kim Dae-jung and Japanese Prime Minister Keizo Obuchi combined historical reconciliation with future cooperation amid globalization, financial crisis and North Korean threats.

Today offers neither clear ideological blocs nor optimism about multilateralism. Deglobalization and fragmented supply chains coexist with deeply intertwined economic dependencies. Trade, technology and supply chains have become security concerns. Both countries bear the costs of American pressure and China's use of resources as leverage.

Chinese raw materials become Japanese processed materials and ultimately Korean finished products. Disruption in one country therefore affects the other. The traditional formula of relying on alliances for security while pursuing economic advantage separately is increasingly inadequate.

A third strategic decision is necessary. Cold War cooperation combined military and economic strength within a bloc. Post-Cold War cooperation emphasized market opening. Cooperation amid U.S.-China competition must instead integrate supply chains and advanced technologies. Sharing technology and choosing supply networks now carry security implications.

Energy, critical minerals and advanced technology should therefore form one strategic framework. This does not mean sidestepping historical disputes. Reconciliation must continue on a separate track, while economic security cooperation can gradually improve conditions for resolving them.

Three practical steps are needed. These measures require sustained political oversight, not simply periodic exchanges among officials working within separate bureaucratic structures.

First, upgrade the economic security dialogue. Launched following a 2023 summit agreement, it stalled for nearly two years after its third meeting before resuming under a 2025 summit agreement. Even at the fifth meeting, delegations were led by Korea's presidential secretary for economic security and a Japanese Cabinet Secretariat official from the National Security Secretariat.

Meetings should become semiannual, supported by continuous consultations and higher-level representation. The dialogue should coordinate the industrial and trade policy talks agreed upon in March, energy swaps and the supply chain partnership.

Second, prepare for the Jan. 10 expiration of the U.S.-China trade truce. Korea and Japan should test emergency consultation procedures under their supply chain partnership while pursuing joint stockpiles of critical minerals and diversified procurement over the longer term. Suspended Chinese controls on rare-earth exports to third countries could return when the truce expires.

Linking the bilateral critical minerals dialogue, first convened in February 2025, to the broader economic security dialogue would facilitate concrete discussions on stockpiling, joint production and purchases in third countries.

Third, cooperation over Alaskan liquefied natural gas could provide a crucial test. Washington is pressing both countries to participate, but the project could cost tens of billions of dollars and lacks legally binding long-term purchase agreements. The risks are substantial for either country acting alone.

By pooling purchase volumes and jointly negotiating prices, tariffs, delivery schedules and profit-and-loss sharing, Seoul and Tokyo could strengthen their bargaining position. Supplies bypassing Hormuz could enhance energy security while easing American trade pressure, potentially benefiting all three countries.

However, binding purchase contracts and a package easing U.S. steel tariffs must precede investment. Equity participation should be considered gradually afterward.

The 1965 treaty linked security with industrialization. The 1998 declaration linked reconciliation with future cooperation. A third decision should establish an economic security partnership. Those who act first when the international order changes help write its new rules.