A Korea-Japan economic community?

The notion of a South Korea—Japan Economic Community may sound utopian — an idea fit only for idealists.

- LEE BYUNG-JONG

Given the deep scars of Japan's colonial rule over the Korean Peninsula and unresolved territorial disputes, most observers would dismiss the concept as naive or politically impossible. Yet one of Korea’s most influential business leaders, SK Group Chair Chey Tae-won, has long argued that deeper integration between the two economies is not only desirable, but necessary to survive the growing wave of global protectionism. At first glance, Chey’s proposal may seem overly ambitious. But economically, his argument carries weight.

If South Korea and Japan were to integrate their economies in some form, their combined gross domestic product would reach roughly $7 trillion — placing the bloc behind only the United States, the European Union and China. Together they would account for about 5 per cent of global output. Such economic scale would give them significant bargaining leverage in negotiations with the US, China and other major powers. In an era marked by tariff threats and unilateral trade measures, acting in tandem may offer better protection than going it alone. “This is the age of trade protectionism,’ Chey remarked in a recent interview. “Given our shared geopolitical situation, Japan is the only country that can share the effects of cooperation.”