Since the end of World War II, historical legacy has caused a series of disputes between Japan and South Korea. Scholars attribute these repeated disputes to Japan’s failure to settle the compensation problem, American foreign policy toward Japan in the early period of the Cold War, the unequal distribution of national capabilities between Japan and South Korea during the Cold War, and the particularities of nationalism in both countries. The literature emphasizes the peculiarities in the Japan-South Korea disputes. However, this does not mean that we are not able to explain the Japan-South Korea disputes in a systematic manner. For example, Kagotani, Kimura, and Weber (2014) argue that South Korean leaders are more likely to initiate a political dispute with Japan in order to divert public attention from economic turmoil to Japan-South Korea disputes. What else drives South Korean leaders to start a political dispute with Japan?
In this article, we focus on South Korean leaders’ motives and policy alternatives to explain how a trade dispute evolves into a political dispute between Japan and South Korea. We assume that a South Korean president is a policy-oriented actor and prefers to take a soft line toward Japan to manage Japan-South Korea relationships. The president also needs political support from the legislature in order to implement public policy. As the presidential approval rate declines, a candidate for the next president tends to behave as a hard-liner to attract public attention, and the legislature follows the candidate, not the president. To implement good public policy, the president is required to maintain his/her popularity and take a hard line.
Given such political constraints, we examine the president’s choice. When the president faces a large trade deficit, he prefers to start a trade negotiation with Japan, not to initiate a political dispute to divert public attention. Only if the negotiation fails, the president initiates a political dispute by addressing historical legacy because issue-linkage can induce mutual concessions, and because even a concession in the political dispute, not the trade dispute, can help the president maintain his/her popularity in order to move back to a soft-line in the subsequent periods. Thus, the president often engages in this diversionary tactic and a trade dispute often evolves into a political dispute.
We test whether a trade deficit is more likely to induce more South Korean hostile actions toward Japan. The statistical analysis using the event data confirms that trade imbalance favoring Japan often causes a political dispute regarding historical legacy. The case studies of Presidents Rho Tae-woo and Kim Young-sam reveal political decisions behind the escalation of Japan-South Korean disputes.