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Japan-South Korea rift

South Korea stays in Japan intel pact, focusing on homefront

COVID-19 and housing price surge leave Moon no time for bilateral dispute

South Korean President Moon Jae-in is focused more on domestic issues, but may have little leeway to compromise with Japan.    © Reuters

SEOUL -- The deadline for South Korea to notify Japan of its withdrawal from an intelligence-sharing agreement passed Monday with no action from Seoul -- but only because more urgent problems have arisen, not because bilateral relations have improved.

Last summer, Seoul threatened to withdraw from the U.S.-backed General Security of Military Information Agreement, or GSOMIA, as tensions with Tokyo escalated. Japan had just moved to restrict exports of semiconductor materials to South Korea, citing security risks.

But with the coronavirus flaring up this month after a long stretch in which the outbreak was contained, South Korean President Moon Jae-in has turned his focus to domestic matters.

Besides the virus, Moon's progressive government faces simmering discontent over economic inequality -- a problem he had vowed to fight. The average price of condominiums in Seoul has surged 50% during the three years of Moon's presidency to more than 1 billion won ($838,000). Moon's approval rating clocked in at 47% in a Gallup Korea poll last week, a drastic decline from 71% in the first week of May.

Moon's policy priorities are said to be reflected in the order of his briefings by top officials. The agencies handling the coronavirus response and economic policy give their reports first, followed by the Office of National Security, which is responsible for security and foreign affairs.

The administration reshuffled its lineup of foreign policy officials last month, and their role has pivoted away from big, ambitious changes toward simply managing the situation, reportedly so that Moon can focus on domestic issues.

Speaking Aug. 15 on the anniversary of South Korea's liberation from Japanese colonial rule, Moon avoided language that could anger Tokyo. Instead, he emphasized the increased independence that resulted from shifting to domestic production of semiconductor supplies. He largely refrained from criticizing Japan over longstanding grievances such as wartime forced labor, while stressing that the door for talks "remains wide open."

Seoul's top foreign policy concerns are its relationship with North Korea and the frictions between the U.S. and China.

The Moon administration's goal of North-South reconciliation was brought to a halt after Pyongyang destroyed a joint liaison office in Kaesong in June. Pyongyang has refused to engage in official dialogue, leaving Seoul with no choice but to continue providing support via private citizens for North Korea's fight against the coronavirus.

South Korea, which relies on the U.S. for security and China for trade, is caught in a diplomatic tug of war between the two powers, trying to balance both without offending either.

Trump has invited Moon to the next Group of Seven summit, and Washington has given consent for Seoul to develop solid-fuel rockets.

China is working to mend the rift created by South Korea's decision in 2016 to host the U.S. Terminal High Altitude Area Defense system, or THAAD, on its soil. Yang Jiechi, Beijing's top foreign affairs official, visited the country Friday and Saturday and discussed a possible trip by Chinese President Xi Jinping.

All these domestic and foreign concerns leave the Blue House with less room to confront Japan. The biggest point of bilateral contention involves forced labor, an issue on which some in Seoul see no need to rush. The planned seizure and liquidation of assets from Japan's Nippon Steel in one such case are expected to take time, with some observers not expecting payments to plaintiffs to be completed this year.

But this does not mean South Korea's attitude toward Japan has softened.

"The Moon administration's Japan strategy has not changed," said Jin Chang-soo, senior research fellow at the Sejong Institute think tank.

"The South Korean government has actually lost its leeway for compromise" on the forced labor issue, said Yang Keeho, a professor at Sungkonghoe University in Seoul. "If the assets are liquidated and the Japanese government retaliates, Seoul will probably scrap GSOMIA."

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