South Korea to Withdraw From Japan Intel Pact to U.S. Chagrin

Isabel Reynolds and Jihye Lee

(Bloomberg) -- South Korea said it would withdraw from an intelligence-sharing agreement with Japan, extending their feud over trade measures and historical grievances into security cooperation and raising alarm in the U.S., their shared ally.

South Korea notified Japan of plans to withdraw from the three-year-old framework for exchanging classified military information, Deputy National Security Director Kim You-geun said Thursday in Seoul. The move came despite the urging of U.S. officials including President Donald Trump for the two allies to work together amid shared security challenges from China and North Korea.

Kim cited Japan’s recent decision to remove South Korea from a list of trusted export countries, saying it “brought about a significant change to the environment of defense cooperation.” He said “South Korea judged that maintaining an agreement meant for the exchange of sensitive military information is not fitting for our national interests.”

The decision shows the growing stakes for the unprecedented feud between Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in, escalating from diplomatic sniping to trade measures that could threaten global supply chains. While the impact of withdrawing from the intelligence pact wasn’t clear, it underscored the hurdles that Washington faces in getting the countries to work together on regional security initiatives.

“The Department of Defense expresses our strong concern and disappointment that the Moon administration has withheld its renewal” of the intelligence sharing accord, Lieutenant Colonel Dave Eastburn, a Pentagon spokesman, said in a statement. “We strongly believe that the integrity of our mutual defense and security ties must persist despite frictions in other areas.”

U.S. Secretary of State Michael Pompeo said during a visit to Ottawa that “we’re urging each of the two countries to continue to engage, to continue to have dialogue” so they “can begin to put that relationship back in exactly the right place.”

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Japan’s Foreign Minister Taro Kono said in a statement that South Korea’s action “shows complete misunderstanding of the security environment in this region and it is extremely regrettable.” He said “relations between Japan and South Korea are in an extremely difficult state, with the South Korean side taking a series of extremely negative and irrational actions.” He told reporters that he summoned the South Korean ambassador and lodged a formal protest.

Euan Graham, executive director of La Trobe Asia at La Trobe University in Melbourne, said the rift “drives a wedge in the U.S. alliance system to the benefit of North Korea and China.”

“If Japan and Korea are pulling apart, it is not all the U.S.’s fault, but it says something about the weakness of U.S. leadership,” Graham said in a message.

Kim Hyun-wook, a professor at Korea National Diplomatic Academy who specializes in U.S.-South Korean relations, said the leaders of both countries had domestic incentives to take a firm stand in a dispute rooted in Japan’s 1910-45 occupation of the Korean Peninsula.

“South Korea is showing that it will not back down on this,” Kim said. “However, this will impact how the U.S. identifies South Korea as a strategic partner in defense. South Korea will gradually be seen as breaking away from the Indo-Pacific defense alliance.”

South Korea held out the prospect that it could reconsider the decision if Japan withdrew its export decision. The pact will expire Nov. 23 if not renewed. The yen, which is viewed as a safe haven currency, strengthened 0.4% to 106.25 per dollar after the announcement, before settling back.

Relations between the two countries have sunk to their lowest point in decades since the South Korean Supreme Court ruled a Japanese company was liable to pay compensation to Korean former conscripted workers and their families. Japan says all such claims were settled under a 1965 treaty, while the South Korean courts said that agreement did not cover emotional pain and suffering.

Since then, Japan has announced tighter checks on exports to South Korea, citing national security concerns -- while Seoul has moved in return to strip Japan from a list of trusted export destinations. South Korea had framed its rethinking of the pact as retaliation for Japan’s tighter export controls.

Breakthrough Deal

The General Security of Military Information Agreement, or GSOMIA, between Japan and South Korea was signed in November 2016, after Seoul canceled a previous attempt at the last minute in 2012. The agreement allows, but doesn’t require, the exchange of intelligence.

South Korea’s defense minister, Jeong Kyeong-doo, told the National Assembly’s defense committee Aug. 5 that there had been 26 instances of intelligence-sharing with Japan since the agreement was signed. He nevertheless played down its practical importance, telling the committee the pact was more about relationships than utility.

Japan has similar agreements on military information with other countries, including the U.S. and Australia. Japan, South Korea and the U.S. also have a trilateral information-sharing pact, but it’s more limited in scope.

“South Korea made the decision under the circumstances created by trust issues between South Korea and Japan, and this has nothing to do with the alliance with U.S.,” South Korea’s Foreign Minister Kang Kyung-wha told reporters after the announcement. “South Korea and U.S. will continue to strengthen and develop alliance between two countries.”

Military ties between Japan and South Korea have in the past withstood political disagreements. This time seems different --- a dispute arose last year when Japan accused a South Korean naval vessel of using a target-lock radar on one of its patrol aircraft. South Korea denied the accusation.

“This signals that mutual access to sensitive information on North Korea’s nuclear and missile developments is not a priority for the current South Korean government,” said Yuki Tatsumi, co-director of the East Asia Program at the Stimson Center in Washington. Moon’s administration was “allowing the ‘history’ issue to poison the aspects of the bilateral relationship that have actually been functioning,” she said.

(Updates with new U.S. comments starting in fifth paragraph.)

--With assistance from Glen Carey and Nick Wadhams.

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net;Jihye Lee in Seoul at jlee2352@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Larry Liebert

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