A three way partnership arrange in 2019 by two prime Japanese and South Korean firms was hailed as a beacon of cooperation amid strained diplomatic relations.
Executives from South Korea’s Naver and Japan’s SoftBank Group mentioned they’d collectively personal the operator of Line, a South Korean-developed messaging app popularized in Japan. They gave the challenge a code identify that emphasised cooperation: Gaia.
5 years later, Japan and South Korea have made important strides in easing longstanding historic tensions. However a rift has emerged over the possession of the Naver-SoftBank enterprise, and diplomats and worldwide relations consultants concern it might once more put stress on ties between the nations.
Japan and South Korea, each key United States allies in Asia, have a delicate historical past. Japan colonized Korea from 1910 till Japan’s give up in World Struggle II in 1945, and Japan and South Korea have typically scuffled over territory and geopolitical variations.
“As we’ve seen many occasions up to now, relations between Japan and Korea shift, and smaller factors of rigidity — whether or not they be wartime or fashionable — can shortly escalate to impression protection and diplomacy extra broadly,” mentioned Maiko Takeuchi, regional managing director at CCSI, a gaggle in New York that advises governments on worldwide safety points.
The stakes are elevated given issues about North Korean nuclear proliferation and heightened instability within the area, Ms. Takeuchi mentioned. “There’s a robust view from the U.S. and elsewhere that preserving Japan and Korea’s good relations is extra necessary than ever,” she mentioned.
The messaging platform on the middle of the dispute, Line, was launched in Japan in 2011 by Naver, the operator of South Korea’s main search engine. After the Tohoku earthquake and tsunami that yr, when telephone traces in Japan had been disrupted, Line enabled customers to speak through an web connection.
Since then, Line, identified for its in-screen stickers that includes expressive rabbits and bears, has develop into Japan’s hottest messaging app — amassing tons of of hundreds of thousands of customers and increasing into Thailand, Taiwan and Indonesia.
In 2019, the SoftBank founder Masayoshi Son and Hae-Jin Lee, a co-founder of Naver, 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 Japanese-South Korean relations had been at a historic low.
The earlier yr, South Korea’s Supreme Courtroom had ordered a number of Japanese firms to compensate South Koreans pressured to work of their factories throughout World Struggle II. Japan reacted to the judicial order in 2019 by imposing export restrictions on chemical substances important to South Korea’s semiconductor business.
The nations’ prime leaders weren’t talking, and there was discuss of severing intelligence-sharing agreements. This was a giant downside for the US, 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 then improved drastically. 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, Mr. Yoon met one on one with Japan’s prime minister, Fumio Kishida — the primary such assembly in 12 years — and Japan lifted its restrictions on semiconductor materials exports.
However late final yr, cracks began opening within the Naver-Softbank enterprise.
Line’s operator, an organization referred to as LY Company, mentioned in November {that a} third occasion had gained unauthorized entry to its techniques through Naver’s cloud storage system. In flip, Japan’s communications ministry issued an ambiguous assertion that was extensively interpreted as a directive to Naver to promote down its stake in its three way partnership.
In South Korea, the transfer brought on a stir. Some analysts and politicians interpreted it as an try by Japan to make use of political strain to undermine Naver, one in all South Korea’s largest firms. Naver’s union mentioned it opposed any sale, and the corporate’s chief government, Choi Soo-Yeon, mentioned she discovered the Japanese authorities’s directive “extremely uncommon.”
An editorial final month within the Korea Financial Day by day equated the transfer to state interference. “For the Japanese authorities to now demand Naver’s exit, after all of the onerous work and funding, appears at odds with the ideas of a civilized nation,” the article said.
In South Korea, opposition events have criticized Mr. Yoon for taking what they view as overly conciliatory positions towards Japan, and cite Naver as the most recent sufferer of these insurance policies. Cho Kuk, a key ally of South Korea’s former president, has referred to as Mr. Yoon’s method to Japan “humiliating,” accusing the president of failing to assist a profitable home agency.
In a briefing in Could, Mr. Yoon’s coverage chief of workers, Sung Tae-yoon, mentioned that so long as Line’s operator was capable of lay out passable plans to strengthen safety, the Japanese authorities mustn’t transfer ahead with “antagonistic measures” that will drive a Naver stake sale. South Korea’s authorities will “proceed to make sure that Korean firms aren’t subjected to any discriminatory measures or unfair remedy abroad,” he mentioned.
SoftBank and Naver are discussing doable revisions to the possession construction of Line’s operator, in response to the businesses.
Naver executives have largely remained quiet on the subject. A spokeswoman for Naver mentioned the corporate was open to all prospects. A spokesman for Japan’s communications ministry mentioned it was as much as Line’s operator to resolve learn how to enhance its safety governance.
Leaders on each the Japanese and South Korean sides seem decided to forestall the quarrel over Line from escalating. Mr. Kishida and Mr. Yoon agreed in late Could that the dispute mustn’t get in the way in which of diplomatic relations.
Up to now, even seemingly minor incidents have confirmed able to turning into extended diplomatic conflicts. In 2018, when a South Korean naval ship was accused of aiming its fire-control radar at a Japanese plane flying over the Sea of Japan, the nations responded by halting defense-related exchanges. That impasse eased solely this month.
How Japan finally handles the problem of Line’s possession might have an effect on the broader trajectory of Japanese-Korean relations, mentioned Yul Sohn, president of the East Asia Institute, a suppose tank in Seoul.
“From the Korean aspect, most people believes that the Yoon authorities has proven its intentions and the cup continues to be half empty and ready for Japan to reply,” he mentioned.
If Japan reveals it’s keen to reciprocate, even by way of a gesture like a concession associated to the dispute over Line, Mr. Yoon might use that to maneuver additional cooperation, Mr. Sohn mentioned.
“We’re in a part of recovering relations, however each events are extremely conscious of what has occurred up to now,” he mentioned. “Even with a stronger basis constructed, there are nonetheless cracks that should be reckoned with.”
John Yoon contributed reporting from Seoul.
