A three way partnership created in 2019 by two main Japanese and South Korean corporations was hailed as a mannequin of cooperation amid tense diplomatic relations.
Executives from South Korea’s Naver and Japan’s SoftBank Group mentioned they’d collectively personal the operator of Line, a messaging app developed by South Korea and popularized in Japan. They gave the challenge a code title that emphasised cooperation: Gaia.
5 years later, Japan and South Korea have made important progress in easing long-standing historic tensions. However a rift has emerged over the possession of the Naver-SoftBank firm, and diplomats and worldwide relations consultants concern it may once more put a pressure on ties between the international locations.
Japan and South Korea, each key US allies in Asia, have a fragile historical past. Japan colonized Korea from 1910 till its give up in World Battle II in 1945, and Japan and South Korea have typically feuded over territorial and geopolitical variations.
“As we now have seen many instances previously, relations between Japan and Korea change, and smaller factors of rigidity, whether or not wartime or fashionable, can escalate rapidly and have an effect on protection and diplomacy extra broadly,” he mentioned. Maiko Takeuchi, regional supervisor. Director of CCSI, a New York group that advises governments on worldwide safety points.
The stakes are excessive given considerations about North Korea’s nuclear proliferation and elevated instability within the area, Takeuchi mentioned. “There’s a sturdy view on the a part of america and elsewhere that preserving good relations between Japan and Korea is extra vital than ever,” he mentioned.
The messaging platform on the heart of the dispute, Line, was launched in Japan in 2011 by Naver, the operator of South Korea’s most important search engine. After the Tohoku earthquake and tsunami that yr, when cellphone traces had been knocked out in Japan, Line allowed customers to speak over an Web connection.
Since then, Line, identified for its on-screen stickers that includes expressive rabbits and bears, has grow to be Japan’s hottest messaging app, racking up lots of of tens of millions of customers and increasing to Thailand, Taiwan and Indonesia.
In 2019, SoftBank founder Masayoshi Son and Naver co-founder Hae-Jin Lee agreed to create a 50-50 three way partnership that will not directly function Line. Reviews referred to the deal because the “Son-Lee alliance,” when relations between Japan and South Korea had been at an all-time low.
The earlier yr, South Korea’s Supreme Court docket had ordered a number of Japanese corporations to compensate South Koreans pressured to work of their factories throughout World Battle II. Japan reacted to the 2019 court docket order by imposing export restrictions on chemical substances important to South Korea’s semiconductor business.
The international locations’ high leaders didn’t converse and there was speak of breaking intelligence sharing agreements. This was a giant drawback for america, which had been making an attempt to get Japan and South Korea to work collectively to counter challenges from China and North Korea.
However relations between South Korea and Japan improved vastly. In March 2023, President Yoon Suk Yeol of South Korea introduced a plan to compensate former pressured laborers utilizing cash from a government-led fund. Later that month, Yoon met in particular person with Japan’s Prime Minister Fumio Kishida (the primary such assembly in 12 years) and Japan lifted its restrictions on exports of semiconductor supplies.
However on the finish of final yr, cracks started to open within the Naver-Softbank firm.
Line’s operator, an organization known as LY Company, mentioned in November {that a} third occasion had gained unauthorized entry to its programs via Naver’s cloud storage system. In flip, Japan’s Ministry of Communications issued an ambiguous assertion that was broadly interpreted as a directive to Naver to promote its stake of their three way partnership.
In South Korea, the measure induced a stir. Some analysts and politicians interpreted it as an try by Japan to make use of political stress to undermine Naver, certainly one of South Korea’s largest corporations. Naver’s union mentioned it opposed any sale, and the corporate’s chief govt, Choi Soo-Yeon, mentioned he discovered the Japanese authorities’s directive “very uncommon.”
An editorial final month within the Korea Financial Day by day equated the transfer with state interference. “For the Japanese authorities to now demand Naver’s departure, after all of the arduous work and funding, appears at odds with the ideas of a civilized nation,” the article states.
In South Korea, opposition events have criticized Yoon for taking what they see as overly conciliatory positions towards Japan, citing Naver as the most recent sufferer of these insurance policies. Cho Kuk, a key ally of the previous South Korean president, known as Yoon’s method to Japan “humiliating,” accusing the president of failing to assist a profitable home firm.
At a briefing in Might, Yoon’s coverage chief of workers, Sung Tae-yoon, mentioned that so long as the Line operator was ready to attract up passable plans to strengthen safety, the Japanese authorities shouldn’t press forward with “adversarial measures.” “which might power the sale of a stake in Naver. The South Korean authorities “will proceed to make sure that Korean corporations are usually not subjected to any discriminatory measures or unfair therapy overseas,” he mentioned.
SoftBank and Naver are discussing doable revisions to the Line operator’s possession construction, in response to the businesses.
Naver executives have largely remained silent on the problem. A Naver spokeswoman mentioned the corporate was open to all potentialities. A spokesperson for Japan’s Communications Ministry mentioned it was as much as Line’s operator to resolve the best way to enhance its safety administration.
Leaders on each the Japanese and South Korean sides seem decided to stop the dispute over Line from escalating. Kishida and Yoon agreed in late Might that the dispute shouldn’t hamper diplomatic relations.
Previously, even seemingly minor incidents have confirmed able to escalating into protracted diplomatic conflicts. In 2018, when a South Korean warship was accused of pointing its hearth management radar at a Japanese aircraft flying over the Sea of Japan, the international locations responded by stopping defense-related exchanges. That stalemate eased solely this month.
How Japan in the end handles the Line possession challenge could have an effect on the broader trajectory of Japan-Korea relations, mentioned Yul Sohn, president of the East Asia Institute, a assume tank in Seoul.
“From the Korean facet, most of the people believes that the Yoon authorities has proven its intentions and the cup remains to be half empty and ready for Japan to reply,” he mentioned.
If Japan exhibits it’s keen to reciprocate, even via a gesture reminiscent of a concession associated to the Line dispute, Yoon may use that to maneuver larger cooperation, Sohn mentioned.
“We’re in a part of restoration of relations, however each events are very conscious of what has occurred previously,” he mentioned. “Even with a stronger basis constructed, there are nonetheless cracks to concentrate on.”
Juan Yoon contributed reporting from Seoul.
