Transcripts For CSPAN2 Japan-South Korea Trade Discussion - Panel 1 20240714

State speaks in washington dc. His on japan self is 90 minutes. [inaudible] good afternoon welcome to the station construction should be stopping soon so hopefully its not too disruptive. We are discussing the japan south korean trade dispute. Its obviously a very difficult issue. Its critically important to the United States as allies. There are all democracies and his friends. It includes ramifications moving forward. I forward because the current dispute is due in part that events taking place from years decades or centuries rather than dwelling on those we want to identify entity three countries including to move forward. None dispute as part of a research of a few years and anytime insult to those individuals working at that each time i think all of us now see the time is very different. In the past the economic and security realm indeed they were moderating and that eventually led to a resolution or at least sort of added to the spotlight but now is broken the laws into both security rounds and it seems to have that the path continues in that direction. Often, the journalism in both countries have often thought that support one ally over the other and is not happening. Officials have always had really had stern messages and will see how they come down on that issue today. We really have an Stellar Group of camel animals. What many of you will think is a surprise guest. Mark never will be giving opening remarks. Mark never with his appearance and is on our website yet. A member of the Foreign Service of. Secretary japan. I first met mark when he was in tokyo and neither one of us would want to admit to it any of numbers is not to say that he cant keep a job that his expertise on so many areas have been recognized. He has served multiple positions in tokyo acting director for Indian Affairs he was a deputy chief of mission. He is twice worked in north korea and to the spent fuel team and then the advance team for the secretary of state all right. Is been a recipient of a number of awards distinguished Service Award that is the highest of manic water. Graduate of university of tokyo, the intensive Japanese Program mark when i was at the National War College in the day of athletics not that im still bitter but if that wasnt enough to be envious excuse me korean japanese we are very honored to have now providing opening remarks. Mark please. [applause] thanks very much bruce that is a very warm introduction. It reminds me and i sure wish that my parents were here to hear that. Thank you. It really is an honor to be here the final nature of my being able to be here today. Truly great to be here so many people who are admitted to building stronger ties with our three countries. Thank you all for your interest in subject thank you all particular time. They are here to discuss and come up with some good ideas on how the relationship but osama all of us moving forward. Japanese and south korea trade disputes moving forward. Got a lot of economic and security challenges. I like to spend just briefly on my time what we consider to be the key drivers for the past six decades of japanese and south korea. Friendships with japan and north korea. The bottom line for us is thanks to these strong relationships are three countries have been come together throughout the specific region or it is been a wonderful benefit to all three countries. Our relationships have allowed us to have taken on the most pressing challenges whether it was challenge of the soviet union and cold war, the threats by north Korea Nuclear programs or the challenges by other nations of the region. Economic order and impose their will. Today her Close Relationships with japan while regionally security alliances are vastly different senses. They stand the full range of human endeavor. Cooperation on regional issues. We believe, that in spite of these that we are wellpositioned for the future we can do this together. There are challenges faced upon us and our interests. Weller security, still remain a cornerstone relationships of these two countries and rt of course to regional security. No way to limit the state of our relationship. These three countries share bonds and values whether its our Community Commitment to human rights, religion whether its hard rule of law, free and open markets, high standards for the free commerce and trade, establishments of an inclusive architecture rebuilt global investments. When it comes to our trade investment relationship, our economy are intertwined and it is uncommon in the world. The United States largest Trading Investment partners and we seek always and even further to have strong ties with these countries. In japan we hope to expand our relationship even further, free trade, in north korea we will continue our efforts that are original free trade agreement. Beyond these investment agreements, we have similar vision for growth prosperity in the pacific region. The market oriented guided by a commitment to the good of our countries. In japan, we have cooperated now for over a year in President Trump strategy. We have shared efforts of our common vision and free and open these efforts with japan include developing energy markets, necessary infrastructure and promoting specific and free and open internet. Similarly with south korea, moon lane has its own specific strategy. And they overlap with our own country. In our strategies we believe this will enable us global health, energy, outerspace expiration, or Natural Resource management. And beyond security investments, we are working both with different a number of regional and global challenges. We were together to combat piracy, and extremism. We Work Together to solve the weapons of mass destruction. We were together to help human rights, to contribute to promote development around the world and significantly, it is no longer just bilateral. Our cooperation now is increasingly trilateral. With the threat in the north Korean Nuclear missiles. With impairments or whether its promoting Developmental Systems of the world. So this brings us to the subject between japan and korea. As an ally, those countries, more than ever, we ensure that there are strong and Close Relationships tweening among the three countries. This is particularly necessary at this time and the challenges by north korea and china. Joint patrol by russia direct allies two or three countries an attempt to take advantage of south korea relations. We must not let these challenges to build a further wedge between us. When that bilateral ties worsen their are areas to improve these relationships. Without political decisions that have damaged bilateral trust and by the same token we believe it is prudent to prevent tensions from contaminating economic and south korea ties. The most confident words from National Leaders the similar response from the nations. We hope and we believe the japan and with United States will continue on this issue instead of the dialup between our two allies. We are all strong when the United States japan and the republic of korea or together in friendship. Much remains to work on that we are confident we will get through this difficult period achieving our shared values and objectives. In the prosperity of our three countries. Thank you very much. [applause] [inaudible conversation] is often been said that analysts need no introduction in the six we have today are really know that to be the case and if you dont know who these people are you really havent been on the issue very long. We have great accomplishments and their credentials for a really long time. Scott is a senior fellow for the senior studies and program on policy. Authors of numerous books, the crossroads, coauthor in south korea dizzy class. One of his oldest books and when i still work on negotiating behavior negotiating on the edge north korea. Prior to cfr mr. Siefert was at the Asia Foundation and are the csis. Our next analyst is a senior fellow and codirector the Station Program and director of the simpson center. Before that she worked out strategic and International Studies and also special assistant to Political Affairs in washington. Numerous publications in the most recent between deterrence and disarmament. In northeast asia. She is the recipient of the incident report and deliver of national japan. Riley walters in Asia Technology economy. He specializes in northeast asian macroeconomic issues as well as foreign investment. Virtual technologies and cybersecurity. He lived in japan and tokyo while attending sophia university. He holds masters in economics from George Mason University and is fluent in japan. Will thank you bruce, its always been in such an order but sometimes i wonder if it note he knows better than to get into issues of south korea and japan issues. As on to say that i endorse and agree with what mark had to say in the way i would characterize it is is by our japanese and allies. I feel like i am a bit of a disadvantage today because i am supposed to describe the south korean view on a panel that is focused on is on the economy. And i am more in the political and security dimensions. Of our us asia relations. I apologize if i cant stay completely in my lane. What i wanted to do is to the response and south koreas removal from japans white list. I think that the structure of my presentation is going to be kind of like watching a video of someone peeling an onion backwards. Whats at stake in south korea in relationships well south korea and japan are significant partners of each other. Over 1000 people are like to be south korea bought 70 percent of chemicals almost 900,000 people. South koreas boycotts objective consumer good sales and decline to japan last year seven and half million south korean visitors. We know that Samsung Electronics and just this is beyond the other issues that are affecting the blackmarket and the economic indicators. In asia from the us china in the state of economics technician. What was the south korean response. Will i would describe the response is one of warm and dictation. I think south korean, they not only consider criticism of export control but they perceive japan was making false accusations on the international credibility. They felt japan was trying to create and retaliate against south korea. South korean sputum japan announcement as a threat aimed at imposing soften the economy and interfering with the district ruling the victims labor were owed compensation. Now these three main policy responses, through which south korea has pursued that since that announcement. The first was campaign to spotlight japans on wto procedures. Including a presentation geneva. Their argument the japans weve seen South Koreans. Out job but japanese components of been revealed to upon north in a panel of experts reports and challenging the idea that has been the source of leaks of Technology North korea and japan has responded with its own response to south koreas efforts to discredit japans claims. The second i think line of response by south korea has been an effort to draw the us into the disputes. To turnaround japans spread of history dispute to the economic sphere. I dont know that effort has been terribly successful. Us is Still Standing aside from getting involved as a mediator. I would say the third line of response in south korea in some ways this is the most interesting and attention grabbing. Its really been the unleashing of korean nationalist outrage against japan through boycotts of japanese products. I think that this is taken two forms, one were negative in my view and the other more positive. The negative aspect is it includes the social Media Campaign from the blue house and and insist that south korea will never be defeated bys japan. The doubling down on the idea of an a piece economy. The two koreas together to counter against russia to secure economic security. In the korean media weve seen, but of a critical review of japans attributions to south koreas early economic developments. In the forum of an examination of japans involvements in building this soul subway and its involvement in helping south koreas fuel industry start. The good side, i think of south koreas efforts to harness National Spirit on this issue, arises from the channeling of some of that outrage into a focus on a renewed competitiveness. Innovation. In some ways, this could even be an opportunity to effectively address south korean economic stick stagnation. I know that south korean government has announced that it invests example he and dollars in r d in order to cut dependency on japanese imports. But on balance, i would say that these responses have been problem. I think that south korea is illequipped to win an international against japan on the economic merits alone and i am skeptical that the reports in the south korean media about a campaign to damage the success of the Tokyo Olympics would be successful. I worry when i see the politicization of the relationship with japan and south korean domestic politics. Here is where i have to dig a little bit deeper and go a little bit beyond the my lane. I think we also have taken into account i actually think that president moon started a good track in his relations with japan by underscoring a two track policy. Focus on separating future from the past. And the question is how did things go wrong. I would say that the administration kind of putting itself in a box on policy toward japan in part because of the dismantling of non foundation which was part of the park there convert on agreement and in part delayed Supreme Courts decision. And growing distrust of men. Ironically, smith finds himself in the same kind of box that she found herself in when she started off. In her term. Putting the women issue in front of Everything Else in south korea japan relations. Now we are in a situation where actually the dispute with japan is helped moons public Approval Ratings when it comes to at the cost of fanning national responses. By encouraging the elevation of domestic politics over the bilateral relationship on the both sides. And heres where im a little bit critical of the Moon Administration for not taking the Political Leadership to protect the relationship from japan and political dust mastic spillover. Instead, i think the Moon Administration has hid behind the idea that is radically resetting and curtailing the role of the executive by not interfering with the judiciarys role. But the executive and the special responsibility to advance National Interest not only for domestic policy but also through smart policy. This includes upholding international agreements, including the japan south korean normalization treaty. While hearing to liberal democratic and separation of government powers. The Moon Administrations approach has yet to realize and optimal balance between domestic and Foreign Affairs. And what id like to see is a reinforcement of legitimacy of court ruling and an affirmation of the conclusion that there claim to compensation for forced labor by saying the south korean government start by honoring the ruling pain compensation domestically while at the same time trying to pursue a dialogue with japan on that issue. I think this is a better course of action than the unilateral further titfortat or continuing domestic politics over interNational Interest. It also assumes, that there would be a willing partner. With him to have a discussion. I want to conclude, with the kind of fundamental reason why i think that relations with japan is bad for the Moon Administration and is really related to the fact that south Korean Foreign policy has been most successful especially under progressive administrations focused on north korea with south korea has had positive relations with all of the four major powers. I think that the highlight of that in our recent experience is actually begin to chew administration in 1999. Who successfully built on positive relationships with the four major powers around korea in order to achieve a historic opening. With north korea. Of course one of the prerequisites, that undergirded that approach was that there was a successful meeting and an agreement within japanese Prime Minister and they signed the 1998 japan south Korea Friendship agreement. So aside from the question whether current leaders are able to live up to the high bar set by their predecessors, it raises the question of whether the policies towards north korea can succeed in the absence of a Good Relationship with japan. What i worry about is the downturn in japan korea and deny moons ability to mobilize a needed leverage for better relations with beja and tokyo. And south koreas problematic relationship with japan will increasingly become a drag on the us south korea lines as well. On the current path, moon will be constrained in south korea will be frustrated because south korea will have los control than it should on critical Security Issues that are directly consequential to south koreas National Interest. Thanks. Thanks very much scott. Good afternoon everybody thinks again for having back in this auditorium. Its always been on looking to go back and share animal with my good friends. I also would like to second wisconsin about the opening remarks are not marked out for and thank you very much for the forwardlooking words in this very difficult time. I would also like to give a disclaimer that my primary area is more of a political military realm and i am going a little bit out of my box here. I also think that riley will have a far better insight on our actual trade focused tact on this issue. I will try to is not japanese perspective per se but what it looks to me sitting in washington looking at this issue for a long time and which what was done is really an unfortunate turn and it is one point that i would like to stress. The turn of events have been happening because the many piling up of many factual misunderstandings. It kinda feeds off of each other and now i think two countries have gone into this mega negative spiral where its really hard for both of them to get out of. So just a couple of points about what i saw at the misunderstanding of how these recent turn of events worked. Initial reporting was talking about embargo. Regarding the japanese government decision of a trade recession. Its not embargo. We often read about what the white list is and what is not. And also what determines and see whiteness is not based on the actual lot, its given by the policy director. Ill come back to this. At the end but white lists in other words can be revised again. If the japanese government decides it is a good time to revise. And the issues on how to get there, thats a little more farther away from another discussion. This japanese government recent decision is based on japanese governments concern about the implementation of the export control regulation in south korea. This is separate. The direct impact actually hits Japanese Companies. Who try to do business with south korea. The list of the item is you probably heard this over and over again so i will repeat but three items. As opposed to initial reporting and in some of them said the actual Economic Impact said to over thousands and thousands of items in the list which is not true. Second. Is that limited the Economic Impact. Let me talk a little bit about my list. Whiteness is what you might call a preferential treatment on the economic export control license provision. For that or for a country to get on the list from japanese governments perspective, two concerns needs to be addressed. One is that they have a japanese government doesnt have a concern that what ever the Technology Material that goes out of Japanese Business to a country export to the country will not be re exported to a different country that could use this from a different purpose of the use when they first apply for the license. Or should those mistakes happen, japanese government has enough confidence in the other governments that they can rectify that. At minimum, japanese government needs to have a reliable body or florida that they feel confident that they can address those issues. Also currently, there are only 26 countries that the japanese government gives this white list status. Many of the japans really important Economic Partners are not included on this whiteness. None of the Argent Companies are part of it taiwan is not part of it. India which japan considers a very important Strategic Partner, indias none of that list. Just to highlight this is not a white list blanket professional export control treatment. Thirdly, here i will go back to this government japanese government needs to have the reliable emphasize reliable consultation for any kind of expert control related concerns with his partner countries. In fact those consultant tips for are important so that japan and this other country can Work Together to make sure that the global export control regime will remain robust. We often nowadays because of the tension between us and iran, we often hear about the coalition of willing over the moose. A friend of mine who is actual expert control act is very much more like a coalition of willing. That each country has its own responsibility to have the appropriate regulations and enforcement of those regulations to uphold export control regime with who the ultimate purpose is to prevent the proliferation of the sensitive technologies and materials into the falling into the wrong hands. Really, like mark said, about how japan us and south korea all share the values of international order, democracy and this fundamental values rate these two countries really need to be working together to stay on the positive force of whole global regime. So again, i would reiterate it is really unfortunate that the two countries which United States considered as a key ally in northeast asia and beyond to uphold some of those very critical values are kinda going bad against each other. I think that is the most unfortunate of all of this. You may ask about japan could have they done anything differently . Possibly. For example, the timing of the july announcement of then Public Comments about the revision of their trade restriction, was los than desirable timing. Some people talk about when you give them and are late on rent payment, and if your landlord, you dont just go ahead and shut down the power and effect. You will give a warning to your tenants. That if you dont do this, and three months time, this is going to happen and he wouldnt just do it overnight. I have no idea whether this kind of quiet warning has been provided from tokyo to south korea but if they have not been, then that could have been provided but then again japan south korea consultation have not been taking place for the last three years so in the absence of those consultation florida, tokyo kind of concluded that there is no or we try to give warning in these constitutional consultation florida but we couldnt. I cant pass any judgment on that. Those potential steps actually was made harder for it to happen because of the political atmosphere that was layout. Can we stay stuck here . It is really not desirable for two countries to stay display. So is there any way for question mark i would like to highlight and also very much concur mark dampers. About the partnership is really more about north korea. It is really about free and open interfaces take region. It is really about upholding those values. Those three countries to share. We have to kind of go back to the basics that the cracks of this actual disagreement over export control regulations is really that. Regardless of unfortunate polarization of the issues of going on, in both countries weekly, this is really about disagreement between the two governments export control authority about how each other imports regulations. So the only way forward it seems to me is that those consultations need to resume. In bilateral setting is too hard, maybe even needs to happen in a trilateral i think its at least someone that you countries do need to begin to talk. Aid to talk on how they can resume what actually was happening before three years ago so that japan and south korea can actually come up with a real path forward and at the end so that in the manner to further uphold and actually strengthen the global export control system. Only minute that. Thanks. Very much. Riley. Just one thing a lot of the panels have written on this topic is that you are in my house i get to shamelessly plug my own product so riley and i just had a paper come out about an hour ago. It was on the topic and hopefully it was in the lobby anyway, i know the other panelists have done so and they can plug their own products. Bruce i was going to shamelessly plug arbys. You can look up bruce rice profile page its on there as well. Im going to start at the 30000 level and kind of work my way back to the ground. The Global Supply chain i think in general, is going through a serious of changes right now particular in asia. Last year we saw japan finalize too many deals right, we saw them finalize the comprehensive and progressive Agreement Partnership for the gp db 11 what everyone followed. That was a deal between economies with the gdp of around 11 trillion. It also finalize an Economic Partnership agreement with the European Union again cumulatively 24 trillion with the gp. A supply chain shifts coming forward when it comes to trading goods. Meanwhile, of course the world has washed as the us continues to have us trade tensions like japan and taiwan last year and we can really continue to watch as the us escalates the trading tensions with china as well. A lot of changes are going on to the Global Supply chain. All of this of course, needs to be taken within context that the Global Supply trade in general, the flow of trade has been flowing, it has been flowing and flowing just as along with slow growth. For regional economies. Merchandise exports just in general are expected to dip below 3 percent of gdp. This year. Of course these are concerns of mostly particular around the training of commercial and agricultural products. There are growing concerns of course around the future of trade of emerging and foundational technologies, products that have dual use for commercial and military applications, and so thats where this recent rising tension between japan and south korea really becomes relevant i think. They were mentioning some of the history of this back in early july, july japan announced they were x licensing. These three chemicals to south korea, not ending it just revoking a special type of license. These chemicals are of course important for the development of certain computer chips, like semi conductors and felt valuable for research and development and so therefore the japanese government found they warranted oversight to export control system. These are again export control and are to a specific system not just general bits. The japanese government of course claim that these companies in the export of these products was being mismanaged. That these companies were somehow not real adequate inside of the way they filed for their license and therefore revoked their license bulk license shipping to more general. It takes more time. Given the longer time than it takes to acquire these licensi licensing, and the shorter amount of time it takes to actually meet the demand of these chemicals, japan more or los cut off these chemicals exports to korea. It is a problem. Of the three chemicals, bear with me here, all qualified services and Hydrogen Fluoride japan controls roughly 9492 and 70 percent of the Global Supply. South korea, imported these products from japan are roughly 85 and 83 and 42 percent so significant global share not just for japan but for the people who rely in japan for these chemicals. The 46 percent of koreas reliance on Hydrogen Fluoride also comes from china which means south korea of course may have to more of his reliance on the china which can have some implications for developing supply chains in the future and of course future implications when it comes to things when south korean china relationships get difficult. We also have that japan announced that it will remove south korea off of its preferred trading was or white list this is of course this allows japanese exporters a little bit more freedom to export these controlled exports to partner countries. The revision will go into effect at the end of this month august 28 and it could impact up to a thousand products. According to the federal federation industries, moving to the white list would cost south korea unto 27 billion in lost exports. This those should be taken within the context that exports are 44 percent south korea gdp. While south korea relies a lot on exports 27 billion is probably only about 5 percent. Its major exports are of semi conductors and integrated circuits and so there is a lot of implications there. As we have already seen samsung one of south koreas largest self chip producers have already seen significant losses. It will be difficult to get south korea to place back on the whiteness, it will have to go through a similar regulatory process which the cabinet japan would have to approve so its not legislative procedure, is more executive i guess you would call it. Beyond the immediate and future costs from the slower export control approval process, from this, there is growing trade uncertainty between the two countries and regionally of course. I worry about downstream negative effects particularly in the trade tension bleeds into the us economic interests. Not necessarily because of these export control revisions but we are seeing negative effects such as the boycotts of certain japanese products, japanese auto sales in japan down the negative effect that south korean terrorism to japan can have which of course most of those come from just an overall deterioration in japanese and south korean relations. But significant nonetheless. Tourists in south korea are generally the Second Largest Group to visit japan after those from china and made 600,000 South Koreans visited japan. Back to export controls, while these are still trading goods, therefore it is warranted a movement in the discussion at the wto would south korean and japan are both members to answer two weeks ago we saw both of these countries argue their case and the wto General Council meeting. South korea argues japan as violating article 11 of the wto which prohibits members from putting restrictions on exports, the claim is similar to how china restrictive where material exports to japan almost a decade decade ago. Meanwhile, japan is retaining that any changes to export control are allowed under wto article 21, which grants security exemptions from the wto because export control again do we use National Security concerns different from general trade goods. I dont believe we have yet see a formal dispute filed with the wto, even then, once we begin this process it could take years before the wto even produces a ruling on this which could be too late for a lot of these supply chains which rely more on shorter time frames. In specific, the us is going through its own process now to justify his way to export controls which include advanced technologies, those two can have significant economic implications specifically for multinational companies, from allies like japan and south korea and definitely upsetting Global Supply chains even further. I think that for example, new rules regulating for example, just the export of vehicles in those technologies good negatively impact the operations of Automobile Companies like tuna and not just in the United States but internationally. I like to plug the paper again we do a little bit deeper into this. We have a number of recommendations ucr already mentioned this a resumption of bilateral export control dialogue between south korea and japan. It should resume. This is definitely crucial but even beyond that if japans concerns about how security and south korean export controls if this is a National Security concern, then it could possibly be a concern shared by that of the United States and therefore, warrants us to be involved. On this level as well through our export control administration. Even beyond that i think a trilateral would be beneficial for everyone. In a working level because of the work mentioned regulatory change effect of the United States that they are thinking of and again is going to allow the us to discuss some of its forthcoming regulation changes on emerging technology and how it could Impact Companies from japan and south korea and beyond that just going back to the 30000foot level, i think its in everyones interest that we sort of resume a more stabilized economic relationship given all of the other uncertainty that we are creating. [laughter] and others are creating is a slowing trends in the world. Thank you. Thank you very much. Three very good presentations covering the issues aspects. We are going to open the floor to q a. Here is a question for me and some of its been covered but to push a little more is what role should the us be playing bashar a public role, a private role, a mixture of that . How involved should we be and we have covered some of that but something to keep in mind. Celestia open the floor, as usual please state your name and an organization if you have an affiliation. A short let me emphasize a short question and because this issue is very sensitive and it covers a number of different issues of great concern that the countries i do want to emphasize no speeches, please treat our panelists with respect and otherwise i will cut you off and just as a reminder i am a third degree black belt. When just final note is the schedule may shift a little bit and we may be a little delayed because for a keynote speech and ut may need to leave right at the land so we are going to try to keep it local schedule. We are looking for opening the floor to questions. Kevin. Thank you and Kevin Merritt fumbling with the state. One lesson i learned is sometimes we make the mistake of assuming our partners actually want to resolve the situation. So my question for the panelists is in this case without getting into details of that historical issues of the economic frictions now, do you think the mooney ministration really wants to resolve these issues question mark in historical issues question mark or is he using them for domestic legal reasons. Wow, [laughter] i think the Moon Administration wants to resolve the issues. Its just that they have a possible objective in terms of resolution that is outside the conventional wisdom of how we thought about these issues for a long period of time. There is also divisions within south korea on how they should be dealt with. The argument that i made is essentially was a National Interest based argument for why it is in south koreas interest to maintain the existing structure and affirm the normalization treaty while working to resolve outstanding differences rather than deconstructing the foundation for the relationship. As we have moved further down this road, initially i have to say that i was skeptical about the use that the aim of president moon was actually to dismantle or to reopen the negotiation on the normalization treaty itself, the further down the throne weve gone the more it seems that there may be influences in the house goes to president moon who may really hold today. And the question is whether thats really the right selection. I want to say one other thing, im sorry to take a little bit more time on this but the other thing i think we have to take into account for president moon is that he is at the vanguard of Political Movement that domestically has experienced success in achieving remarkable clinical transformation. Both with the transition from authoritarianism to democracy in the late 80s, and with the candlelight demonstration to some degree. And so im not necessarily surprised that some people in that supporting group, i also think that they can apply. They can apply some of that success to the International Sphere but i feel is because they dont understand the international spear. I think we have to take into account what that experience is in order to understand where they are coming from but this is not necessarily the right moment to completely revise the relationship, it is a moment to figure out if there are ways to resolve an issue related to forced labor claims that has now or had a verdict in the Supreme Court in a way that affirm to humanitarian principles while also remind you maintaining the foundation for the relationship. Hi Scott Thompson from samsung. Ut described Japanese Companys who are the ones who are suffering from the export restrictions with regard to their actual potential customers. How would you characterize Japanese Companies are therefore responding to those consequences to the ame government and more broadly. Thank you so in a short answer, i can only give you a very brief response but not specific to this recent issue. Japan Economic Federation has expressed for a while, the potential Economic Impact that Japanese Business might suffer with the Political Tension between the two countries, and then i can only suspect that their concern how has intensified since then. Again i will go back to a kind of technical side of the export control a little bit. Enter japanese system, the norm is individual licensing application. A comprehensive and application which the three chemicals that riley talked about and been included is rather comprehensive license application was rather a an exception. The second ballpark very rough description of it. Enter japanese system also, even for the export to the United States, depending on the trails items, Japanese Companies still have to go individual license export licenses. When you about individual licenses, this is based on the contract so its not like every shipment that it goes out from japan to south korea same company goes back to multiple. If the contract is usually a yearlong someone to get it, as long as that specific shipment is based off of that contract, the Japanese Company does not have to return for the reissue of those licenses. Its not for shipment, is per contract. Thats number two but also, the items that they need to go back for those more stringent side of the license applications, is more limited because it is limited and has to be categorized under japanese governments under categorizations under if they have dual use the japanese government have a serious concern about the potential to be romanized if not treated appropriately and without the application of the end user. I would just say that japanese Economic Data set already expressed that impact and i would think that given these chemicals it is true that that is dual use, he could be defense or nondefense but it is still it could be applied so it is premature to say with the longterm impact will be but given that this regulation change has already taken so we are all kind of talk and in speculation here that by lets say we might start seeing some impact but even under that given so many other countries that japan also considers an economic partner like india. They have a high impact trade going on. You dont hear about these massive economic damage to the other side. My rough guesstimate will be the impact could be fairly limited shortterm but it gets prolonged then im not quite sure riley would probably be in a better position to assess that. I think the media impact. Even to the certain degree of long term impact we understand the Global Supply of the cream three chemicals but without these other products i havent really had time to digest that. I think most people havent. Its hard to grade. One of the three chemicals i think there are concerns about the south korea alliance. Where is it you know get those products from china. Her south korea. Whether they actually can or not thats another question. Goes to show that this deterioration that japan is codified in the street tension is being taken advantage of by potential adversaries in the region. One of the issues that people have raised is if korea to compensate is shifting away from japanese supplier to a chinese or russian supplier, then that creates a lot of Strategic Issues that the us would be considered about. Someone pointed out that through the purity of the products, are 99point in then 12 nines percentage peer and they cant get that from chinese suppliers. There is the strategic concern. But theres also the technical requirement that other suppliers may not be able to compensate for the high quality japanese products. Thank you so much for all of your remarks especially appreciated the type of ideas for resolution. There are two challenges, you know, that we see that make this different from previous cases, and one is the metastasizing of the issue beyond initially politics and security, in the economic sphere and now possibly back to the security sphere. And the other is the u. S. , i think, role is kind of proceeding from it at best a standing start because we had a prolonged vacuum in the position that would normally be the senior official addressing these issues. And so i think those are factors that make it more difficult to come up with a nearterm solution. It is probably going to take time. And some new ideas in order to stop the slide from continuing. I think i will second both. Bilateral consultation towards resolving this issue is probably difficult for the reason that scott laid out so well, happening on a bilateral basis, so it probably will have to be in a trilateral, but this actually because of the nature of this is control, there is a lead agency in all governments, but then this is essentially going to come down to like multiintraagency process on all three countries. So thats again the issue of capacity. So its because its export control and theres a National Security concern base, at least one participant claims so. You know, the dod, the technology transfer, and then the people on the state and dod on the u. S. Side that looks at Industrial Security from their agencys lens will also have to be involved. The picture more or less similar on the japanese side and on the japanese side. And what makes it really difficult for u. S. To play a role is that u. S. Is going through its own export control reform, in the manner that it makes, you know, we often read about hightech cold war between u. S. Camp and chinese camp to the point where, you know, u. S. Government itself is really weighing in on its allies and partners to take whole new fundamentally different look at their own countries, like Multinational Corporation supply chain and also americans or Multinational Corporation supply chain, so u. S. System is in flux in bigtime, and you probably cant even predict how this is going to shake out, right, at the end, so for the u. S. To going through the flux in house and then try to try to have this consultation with two of its allies, with serious disagreement is probably going to be a difficult process. That doesnt say it cannot happen, but it really has to start from somewhere, and then i for it to start from somewhere, i think trilateral is probably the best forum. There are, you know, concerns that as were rushing down the road, to going off a cliff even further, there are sign posts that we may be breezing by, weve got, you know, the implementation of the list. Weve got the august 15th speech by president moon and see what signals he sends there. Late august when the military intelligence sharing agreement between japan and south korea needs its automatically renewed unless either side decides to pull out, and there have been some signs from one or both countries they may do that, so there are a number of deadlines or events that are coming up which could further exacerbate it, and that raises the issue whether the u. S. Needs to get involved, not only behind the scenes, but whether, you know, President Trump needs to sort of public implore both allies to sort of first do no more harm and then try to work to step back. So i think theres really a lot of cause for concern that it not only is not going to get better but could get even worse. Thank you. Im retired. Vladimir putins russia has been implicated in provoking conflict and dissent all over the world, fake news and social media and such, and there have been reports about other countries, north korea, china, iran, among others doing the same. Im wondering is there any evidence of some third outside party instigating or encouraging this dissent, possibly through Public Opinion or such . Not that i know would be the short answer, but they can bruce well, i would say i think this is really japan and south korea own this one, and its issues that go back quite a long time. I think north korea, china, and russia enjoy seeing two of our critical allies at loggerheads with each other, at a time when a lot is going on in asia, so i dont think its really any of the other actors influencing this, but i think they are enjoying the difficulties that our two allies are going through. I think thats a Perfect Question for the next panel. Lets save the really tough ones for the next panel. Thank you. My question to the panel is that if you have u. S. Intervention on this issue, do you think u. S. Have to intervene [inaudible]. Scott, you can i mean, the safer approach would be to focus on economics first. Its a question of whether that is going to be sufficient to, you know, really create the guidelines, you know, necessary to stabilize the relationship. And yet, i mean, for the u. S. To get involved in looking at the historical side of things, you know, also gets very complicated because there are a lot of political cross currents in japan and south korea that are a little bit unpredictable and would have to be managed for the u. S. To be able to get too deeply involved in that. I agree. It is frankly i think it would be more productive if u. S. Intervention private or open will stay focused on this particular issue. But like scott said, whether thats i would even go further and whether being able to do that is feasible or not is an open question, i think. Well, i think the economic and the security aspects now are sort of manifestations of the historical disputes. And the u. S. And weve seen recent comments by Trump Administration officials of sort of its up to the two countries to resolve those. You know, that said, during the previous iteration of this dispute, the Obama Administration was involved, behind the scenes, very private, but my understanding was, you know, very stern messages to both capitals that the other capital wasnt necessarily aware because wed hear from both sides sort of youre only picking on us. It is like no, no, the other side is getting equally stern messages. And i think the Obama Administration involvement was in part responsible for the agreement in 2015. So that is an area where we did get into the historic issue, but not certainly not as a judge or arbiter of which side was right or what issues needed or what actions needed to be taken, but it was a way of trying to move both countries toward a resolution or at least addressing the issue so that the history issue could then no longer be impeding on presentday issues. So that would be sort of an example of what an administration could do, even in the very difficult historical issues. Sir . Im working in the center. It is my pleasure to attend this seminar. So i just wonder, i could ask two questions, small questions. One question is to mr. Scott because you said please specify more on your statement that the administration should balance between current Domestic Affairs and Foreign Affairs. The second question is that do you think chinas rise, chinas military wise, northeast asia, will provide cooperation between two states, korea and japan, even further among three states, with the United States . Thank you so much. In my presentation, what i was trying to suggest is that in the Moon Administration, domestic politics has been allowed to kind of drive policy, without sufficient regards to Foreign Affairs and National Interests. And essentially what i was saying is i think there is a way to accommodate both political needs. And that way is to affirm the Supreme Court ruling and to take action now to provide compensation from the south korean government in order to, you know, respect the ruling, while also addressing this as an issue of concern in the south korea japan relationship. And talking to the government of japan about this issue. One of the problems is the government of japan hasnt really wanted to talk about the Supreme Court ruling under the terms that the south korean government might prefer. And so that is a real big challenge is basically both governments are very path dependent if their focus on how to talk about this issue in their focus on how to talk about this issue. Yet, ultimately the japan south korea relationship is theres a legal underpinning, but it is a political relationship, and the job of leaders is to solve political problems, and so we do have an issue that is old and new, thats generated by the korean Supreme Court ruling, and i think the only way for it to be really resolved is politically. So i personally was a big fan of a proposal that emerged earlier in the spring from the south korean private sector, to raise voluntarily a fund that could be used to compensate for forced labor, and that particular proposal also left open the possibility that japanese firms might want to join. But i feel that that proposal was not allowed to flourish because the governments got involved and i think it would have been better if the south korean private sector had just gone ahead and established the fund because the governments themselves were moving in a different direction, and so, you know, frankly, as we were talking earlier, one of the things one of the, you know, indicators of concern for me as i look at the way that the Moon Administration has been addressing this issue was the fact that they brought that private sector fund under control and made it into a government proposal, rather than allowing that voluntary effort from Civil Society and the private sector to go forward as a means by which to serve as a safety valve and release, in terms of addressing this particular political issue. On that issue, its sort of raised the idea, is it compensation or punishment . So if korean society, Korean Companies were to provide into a fund so that victims of forced labor could be paid, either the Companies May say why do we have to pay, or the victims or society may say well, we dont really want Korea Companies to pay. We want it to be from japan because they were the cause of it would be the view. And then the other thing would be the scope of the issue. So we have the current two court rulings, but then others have pointed out that there are pending or potential cases that could be up to 20 billion dollars. So i mean, then its not just the near term thing, but also what could be a very large number. If i could just come back in on this, i mean, i personally believe that it is a mistake and this is just my personal view. I think it is a mistake for the south korean government to try to use, you know, these particular issues in order to compel a response from the government of japan on issues of history. Because anything that is compelled is not by definition not going to be sincere. And so that actually means that, you know, the korean government has to wait until the government and people sentiment in japan change around this issue. But anything that is compelled i i this is going to be worthless i think is going to be worth less so use compulsion in a way of achieving the objective is never going to gain the historical issue. Your other question is a very good point. The current south Korean Administration takes a very very different approach and outlook, visavis north korea, how to respond to them, thats gone. So can china be the big enough incentive . It should be. But so far i would say it hasnt worked that way. Im hopeful that it would at some point, but that some point i hope would come sooner rather than later. You know if you ask a question, you are leaving yourself open to any of them asking you a question when you were here, but go ahead. The question is partly for you. I know you have to leave early. I can ask this question. This has been such a rational intelligent civil discussion, but we are dealing with a very hyper emotional issue when it comes to the domestic population in south korea and japan. I wonder if at least, and maybe in particular, scott, characterize the constituencies of president moon and Prime Minister abe on some of these issues, and it wasnt just this issue. I mean the radar lockon a few months ago was of course the center of attention and the rulings last year of course in october and november on compensation. In addition, though, heres the bright part of this question, japan just had an election. Abe is strong right now in japan. As far as i know, south korea doesnt face local elections until next spring. Isnt this a critical window when domestic politics on leaders trying to take statesman like action and try to put this behind them i will be brave and be the first one to do it. You are absolutely right. I think in terms of in a sense that from i only speak for japan, south korea for scott entirely. This will be a good time for Prime Minister abe to take some courageous steps, but i do feel that because after all hes been in the office since the 2015 agreement was reached, so the way that the Moon Administration handled that agreement really kind of i think discouraging him to take any more statesmanlike action when it comes to history issues with south korea. Thats my first response. And what has been happening is scott was talking about the, you know, his sense of Moon Administration try to work down this issue toward kind of fundamentally revising, opening this, you know, pandoras box, touching the 1965 normalization agreement. And i think that, you know, several years process since he came into the office really i think alienated, some in japan, even are the deepest sympathizer for south korea and an advocate for more civil dialogue, you know, empathetic response from japanese government. And case in point, recently, there is a book published by an ambassador to korea, and he was an ambassador to korea from japan at the very difficult time, and yet, he really was one of the people who really deeply understood that these issues are complicated, but it really needs to be resolved, but he is also a strong advocate that it takes two to tango. And hes been speaking and, you know, writing like the ambassador that i dont know. So even for someone who really deeply has that level of deep understanding of the complexity of the relationship, for him to come out that way, to me it was very alarming. That how those people are alienated even those people are very uncomfortable about how government in seoul is handling some of these issues. So i think the we often heard about, you know, korea fatigue within and outside of japanese government, and we always like to think that its limited to a certain number of, you know, Prime Minister abes base, which are very conservative, but my sense is that it is really spreading. It is wider than wed like to think, and if it really is wider than wed like to think, it is harder problem to tackle because i think japan often doesnt come out really cleanly on one side of the debate, but if they do, it is hard for them to move from that. In south korea, i kind of look at this on two levels. One is the emotional level, which really puts a premium on group action and gives an impression of a monolithic response, and the other is an underlying National Security debate type level, and if i think back over the course of the past 10 to 15 years, about the evolving nature of south korean debates over japan, c cha what is striking to me at this moment is that there is a strand of thought that is being expressed publicly about south koreas National Security need for a Good Relationship with japan, that you couldnt find 15 years ago because the emotion was so overwhelming. But what i worry about is that the emergence of this debate in south korea is coinciding with what she just described, the disappearance of a debate about the possibility of south korea as a Strategic Partner in japan. We will take a few more. Sir, we will take two right here. Thanks for all your answers. My question is just straight and simple. Does japan really want u. S. Intervention at this point . And what does japan really want at the end of all this happening . What does japan want in the end of all this . On this, meaning this Current Issue or more broadly, on the u. S. South korea i mean japan south korea relations, because my answers would be very different. Overall. Overall . Overall i think japanese government just really wants south korean government to uphold the what scott described, the basis of the normalization treaty, the stay intact, honoring all the government to government agreement the two countries have signed, do not walk it back, and especially, 2015 comfort women agreement, so that was why i think the dismantlement of that foundation was was really did send a strong message to tokyo that we cannot work with this government. But does japan not want south korea as a partner . No, japan wants south korea to be a partner. Then i think the two countries should be a partner. They have actually more regional and Global Concerns in common than they defer. But but i think that i will refer back to what i said in response to patricks question, that this past couple of Years Development really have put deep questions in the minds of japanese, not limiting to japanese government officials, about any agreement that tokyo reach at official level with seoul, can that be uphold, you know, longterm, or will that be under the transient agreement that with the new president they are going to be theyre going to be appended . And then i think the last line of defense, and that was true when japan, south korea relation went through similar diplomatic tension during the administration is that yes, there are all these disagreements. It is very hard to work with this government, but this fundamental box that we created together in 1965 was not touched. This government seems to be trying to touch that box, and that all bets are off when it comes to that, so i really dont know what kind of endgame japanese government or japan as a country sees in this at the end of this current tension, but i do think that i do think that, you know, even at the height of this tension, japan does japan does like to have a stable relationship with korea, and that is an interest not only in japans interests but also in koreas interests and also frankly american interest. Okay. We will take one more question, and then well defer all the others for the second panel. Right here in the center. Well, thank you. Koreans understand how sensitive and delicate the issue is, but a lot of koreans still think that the history issue to economic, retaliatory measure is a totally different story. I would like to ask you what you think about this, and one more question, japan raised suspicions that south korea may not abide by sanctions on to north korea. According to the report, japan mentioned something about inappropriate case, something about being smuggled into north korea. But japan has not show any specific clue, so can you specify on what made japan think this and what would be your response . Thank you. So first of all, this is why the timing of this decision, the japanese governments decision of regulatory revision was poor is that it often been interpreted specifically particularly in south korea media as retaliation. This is not a retaliation. This is simply the revision of how japanese government implements and enforces its own export control regulations. And at least this doesnt happen during this current administration, but then between years 2008 to 2010, there are several cases again, the illegal export of carbon fiber was made, again, from Japanese Company, but then it was it was it was an initial export was made to korea, and then it went to china, so again end user issue based on the export control regulations on japan, or other machineries like laptops are again illegally exported out of japan, so those are all investigated. I think those who are responsible were charged, but those were within japan. Those charges were made against Japanese Companies. I go back to what i said in the outset, that these regulations first and foremost impact Japanese Companies who try to export business to south korea because those companies who used to be able to use the comprehensive licensing license application can no longer do so, so they have to go back to the old ways, which is based on individual export contract. They have to go back to those licenses. But can they export . Yes. If license were granted, they can export. This is in no way a ban. Im not quite sure how that is considered as a retaliation, quite honestly. And i will not comment on the more recent cases because i think later on i think those still need to be substantiated some of them i think. Shes referring to the comments that were made by the japanese politicians on some of the talk shows about some of the unconfirmed cases of the not smuggling, but then illegal reexport or into a third country in this case could have been north korea. What i found confusing in a lot of the japanese statements is whether some of the politicians were really speaking for the government or not because as we point out in our paper, the japanese trade minister said we have never said that north korea is one of the nations receiving smuggled materials, but it does raise the question well if there are concerns, is it a factual concern that yes, they were able to trace Japanese Technology through a south Korean Company into north korea . And then if that can be proven, was it with south korean conscious effort or companies, or is it a hypothetical concern . If its a hypothetical concern, is it more concern with the Japanese Company shortcomings or the japanese export control shortcomings rather than any south korean action . So i found sort of conflicting confusing messages from tokyo as either whether there were assertions about transfer to north korea, or if it was, what was the evidentiary basis for it . And was it more on the japanese side or on the south korean side . I think thats one of the areas where bilateral discussions or trilateral discussions would hopefully, you know, investigate of, okay, lets put everything on the table. So i think this is why the working level official to official consultation on export control needs to be resumed because that would have been a natural venue for japanese side to air those in a private quieter setting, but then, you know, in the absence of that consulting body to be held for the last three years, you could say i dont know whose fault is that, you know, that absence. Right, and japan has said, you know, there were no meetings for three years, and then now korea has said well were ready for meetings and they say japan is not interested. One of the first step is get people into the room at kind of a low level i mean, not low hierarchy level but low visibility or pr level. Less political level. Okay, were going to bring this first panel to a close, and then were going to have a short break as we switch panelists and nametag. Please join me in thanking our panelists. [applause] the cspan cities tour is on the road, exploring the american story. Bozeman in many ways and galleton county is a lens in the way in which montana is changing. It is one of the fastest if not the fastest areas in terms of growth in the country. With help from our spectrum cable partners, we take you to bozeman, montana the most famous formation for dinosaurs is this formation, and that is where we go to find two of the most iconic dinosaurs are known from the formation and we have that here in montana. An incredibly beloved author in montana. Ivan i think gives voice to the working people in montana. Watch the cities tour of bozeman montana on saturday at 6 30 p. M. On cspan 2 on book tv and on cspan 3 on sunday working with our cable affiliates as we explore the american story. 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