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Park Chan-kyong

A fraying global economic order could push South Korea and Japan towards deeper trade integration, with business leaders and analysts saying the two neighbours stand to benefit from such a partnership despite lingering historical wounds.
The two countries could draw closer as the era of relatively open global trade gives way to tit-for-tat tariffs and supply-chain disruptions due to conflicts in the Middle East and Ukraine.
SK Group chairman and Korea Chamber of Commerce and Industry chairman Chey Tae-won has in recent weeks proposed building a shared economic community between South Korea and Japan.
In an interview with Japan’s Asahi newspaper published this week, Chey said connecting the two countries more closely could create an economic bloc valued at US$6 trillion annually, ranking fourth globally after the United States, the European Union and China.
Lee Won-deog, a professor at the Institute of Japanese Studies at Kookmin University, called Chey’s proposal “bold” and said: “Korea-Japan economic integration is the spirit of the time as the global trade order fragments, superpower rivalry grows and regional blocs strengthen.”
Japan and South Korea could learn from France and Germany, whose post-war reconciliation began with cooperation in industries such as energy and steel and helped lay the foundations for the EU, he added.
With South Korea’s gross domestic product per capita and exports having reached levels comparable to Japan, Seoul could engage Tokyo on an equal footing, according to Lee.

South Korean companies are competitive in batteries, shipbuilding and advanced manufacturing while their Japanese counterparts are strong in chemicals, energy technologies, machinery and finance, he added.
The intensifying US-China rivalry is making it more difficult for South Korea and Japan to rely solely on global markets. Their economies also face major structural challenges including rapidly ageing populations and low birth rates.
“They should step up their economic integration and expand this merger into other countries,” Lee said.
South Korea and Japan have held discussions in recent months to boost their supply chain cooperation.
In March, they signed a partnership covering supply-chain disruptions, critical minerals and other areas.
Last week, the two sides met again in Tokyo to discuss ensuring stable supplies of liquefied natural gas, crude oil and petroleum products during times of crisis. They also discussed cutting carbon emissions to meet EU requirements for imports entering the bloc.
Lee said closer energy cooperation could benefit South Korea and Japan as they were among the world’s major oil and gas importers and could gain better terms through joint procurement.

At the corporate level, some companies from the two countries are seeking to cooperate and boost their competitiveness.
To meet surging demand for AI-related memory chips and reduce manufacturing costs, SK Hynix – an affiliate of Chey’s group – is considering partnering with Japanese NAND flash producer Kioxia to build a memory-chip facility in Japan.
On artificial intelligence, Chey has identified NTT and Tokyo Electron in Japan as potential partners for South Korean companies, with both sides collaborating on AI data sharing, developing global standards and increasing cross-border investments in start-ups.
‘Political sandwich’
Pak Seong-bin, a Japanese affairs expert at Ajou University, said South Korea and Japan faced similar trade risks as manufacturing powerhouses heavily dependent on international supply chains.
They are caught in a “dual geopolitical sandwich”, with dual pressures from the US-China rivalry adversely affecting global supply chains and security tensions in Northeast Asia, according to Pak.
The energy sector held potential for strong bilateral trade cooperation, whereby Japan could procure crude oil for South Korea to refine and export it back to its neighbour, Pak said.
With the emergence of more international trade standards, South Korea and Japan could work together and have greater say in the process, according to Pak. He cited the EU-led hydrogen certification rules as an area where the two East Asian economies could coordinate their positions in areas ranging from extraction, supply and transport to consumption.
Another possibility was combining Korean technology with Japanese planning and finance to undertake large, high-risk infrastructure projects in third countries, Pak said.

However, Cho Jin-goo, a professor at the Japan Research Centre at the Institute for Far Eastern Studies at Kyungnam University, said prospects for a South Korea-Japan economic community were low for now given their historical baggage.
The two countries remain divided over issues arising from Japan’s 1910-45 brutal colonial rule over the Korean peninsula, including compensation for victims of wartime forced labour, as well as the territorial dispute over the Liancourt Rocks, known as Dokdo in South Korea and Takeshima in Japan.
Nonetheless, a strong economic partnership between South Korea and Japan could not only benefit them at the bilateral level but also influence China to join hands with them to deepen global trade networks, Cho said.
“Cooperation in trade and technology [in East Asia] will hopefully set a good example for the rest of the world as the global trade order fragments.”


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South Korea

Can a US$6 trillion South Korea-Japan economic bloc succeed?

A robot seen at the Smart Factory & Automation World 2026 exhibition in the Gangnam district of Seoul in March. Photo: NurPhoto/Getty Images

Japanese Prime Minister Sanae Takaichi holds talks with South Korean President Lee Jae Myung in Andong, South Korea, in May. Photo: Kyodo

A tanker ship moored at a liquefied natural gas terminal in Sodegaura, Chiba, Japan. Photo: AFP 

Islands called Dokdo in Korean and Takeshima in Japanese, as seen from a Korean Air flight in 2011. Photo: AP

Containers being loaded on ships at a port in Tokyo. Photo: EPA-EFE

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A South Korean tycoon’s proposal could create the world’s fourth-biggest economic bloc, if both countries put history behind them


A South Korean tycoon’s proposal could create the world’s fourth-biggest economic bloc, if both countries put history behind them.


Can a US$6 trillion South Korea-Japan economic bloc succeed?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}A South Korean tycoon’s proposal could create the world’s fourth-biggest economic bloc, if both countries put history behind them

A South Korean tycoon’s proposal could create the world’s fourth-biggest economic bloc, if both countries put history behind them