Examining the Importance of Strengthening Cooperation between Korea and Japan under the Economic Security Paradigm

Abstract

Purpose: The purpose of this paper is to look back on Korea-Japan economic relations in the wake of the recent improvement in Korea-Japan relations, and to consider the importance and necessity of strengthening cooperation between Korea and Japan in a trade environment where economic security and protectionism are spreading. Research design, data, and methodology: This paper first reviews recent studies similar to the scope of this study, and then examines changes in the world economic order and global trade environment due to the spread of the economic security paradigm. Based on this, we analyze the challenges facing Korea and Japan, and then consider why strengthening cooperation between Korea and Japan is important and necessary under the current trade environment where protectionism is rampant. The analysis method uses various international organizations and Korea-Japan trade statistics to analyze the structure and characteristics of Korea-Japan exports and imports, the effects of the Korea-Japan FTA within RCEP, and the ripple effects of the expansion of Korea-Japan cooperation. Results: This paper analyzes the relationship between the economic and industrial structures between Korea and Japan and suggests that building a strong cooperative relationship at the present time, as it has in the past, will bring about mutual benefits. In particular, it emphasizes the need for active response through multilateral cooperation on the international stage, such as RCEP and IPEF, and not limited to cooperation between the two countries. Specifically, the Korean and Japanese economies have a fundamental condition in which they cannot help but prioritize the U.S.-led economic bloc when choosing between the U.S.-led economic bloc and the Chinese-led economic bloc. However, as mentioned above, the Korean and Japanese economies are faced with a dilemma in that they have a connection and closeness with the Chinese economy that cannot be easily escaped. If bleeding occurs due to intensified competition between Korean and Japanese companies, there is a high possibility that only China will benefit as it will be able to purchase at low prices. On the contrary, if cooperation between Korean and Japanese companies is strengthened and transactions are carried out with Chinese companies, the Chinese economy is still highly dependent on the Korean and Japanese economies, so negotiations can be advantageously guided in the direction demanded by both Korea and Japan. Implications: Our government must recognize that Korea and Japan can continue to generate economic benefits by strengthening cooperation between the two countries, even under the economic security paradigm, considering the similarities in economic and industrial structures, the closeness of the economic development process, and the shared concepts of capitalism and free markets. It should not be overlooked that if trade friction or disputes occur between specific countries among the three countries, this could have a negative impact, so to speak, on large losses, not only to the relevant country but also to the other country. Therefore, strengthening cooperation between Korea and Japan is an essential option in the current situation.