© YONHAP News

Japan’s new Emperor Naruhito succeeded his father Akihito and ascended the throne on May 1, opening a new imperial era known as Reiwa. Since the Meiji era which began in the 19^th century, Japan has practiced the tradition of using a particular name to describe a certain period of history. On May 1, Japan officially embraced the new era of Reiwa, meaning “beautiful harmony,” with Naruhito becoming the 126^th Emperor of Japan. 

Today, we’ll discuss the opening of the Reiwa era in Japan and its potential effect on Korea-Japan relations with Professor Kim Gwang-seok at Hanyang University Graduate School of International Studies. 

Local businesses in Japan are scrambling to capitalize on the use of the new era name. For example, stationery makers including Nihon Horei are busy producing new rubber stamps that correct the old era name “Heisei” and indicate the new name “Reiwa” at the same time. On a similar note, calendar manufacturers are enjoying a special boom. The local tourism industry is also benefiting from a ten-day holiday period, timed with the new emperor’s accession to the throne. 

Various industries in Japan have high expectations to take advantage of the transition from an old era to a new one. 

With Akihito becoming the first living Japanese monarch to abdicate in 202 years, expectations are running high for the new era. A ten-day holiday period began on April 27, and most department stores and shopping malls across the country held special events to celebrate Akihito’s abdication on April 30 and Naruhito’s enthronement the following day. Manufacturers, in the meantime, have churned out products with the new era name. A variety of commemorative events will be held until November, including an open car parade for the new emperor and his wife in October as well as banquets and dinner parties. 

Japanese Prime Minister Shinzo Abe is determined to guide the country in the right direction in the new era. 

The previous Heisei era was riddled with hardships such as record natural disasters, the collapse of the bubble economy and a long recession that was described by some as “two lost decades.” Departing from the old, turbulent era, Japan has now entered a new age, where Abe pledges to restore Japan’s prestige as a strong nation. The prime minister has told reporters that he wants Japan to proudly bloom like plum blossoms, which bloom beautifully after a harsh winter. As seen in Abe’s remarks, the domestic political community is eager to usher in a new era with high anticipation. 

There will be various political and diplomatic events to mark the new emperor’s accession, including an invitation to foreign guests for special events in October. Also, the Group of 20 summit is scheduled to take place in Osaka in June. Abe plans to use those events as an opportunity to propel the nation. 

In fact, Japan was the second-largest economy in the world during the early years of the Heisei era. In 1989, the benchmark Nikkei stock index soared 29 percent on average. Unfortunately, local manufacturers that mostly depended on exports lost their competitiveness due to the aftermath of the strengthening of the local currency. In addition, the bursting of the real estate and housing bubbles in the nation led to the so-called “lost 20 years,” which are also described as the “Heisei recession.” 

By leaving the difficult times behind, Abe vows to build a strong Japan in the new era. For starters, he is seeking to touch on the trade dispute with South Korea over import bans of Japanese seafood and turn the situation around.

Abe claims there is controversy even within the World Trade Organization or WTO over its recent ruling in favor of South Korea’s ban on Japanese seafood. He says he will raise the need for overhauling the WTO at the G20 summit in Osaka in June. 

Abe’s political inclinations, on the whole, clash with South Korea’s, and the Korean government and media have taken issue with that. On the flip side, Abe has been able to secure stronger support from the Japanese public. Against this backdrop, South Korea-Japan relations are feared to deteriorate further. 

Last month, the WTO said in its final ruling that South Korea’s import ban on Japanese seafood does not constitute unfair trade restrictions, effectively bringing an end to the four-year-long dispute between Seoul and Tokyo. The ban was imposed on Japanese fishery imports from areas affected by the Fukushima nuclear disaster in 2011. 

Even though Japan should respect the WTO’s final ruling, Tokyo still has not acknowledged its defeat. Abe plans to discuss WTO reforms at the G20 summit in June, arguing that there is a problem in the way the trade organization settles disputes. The ongoing conflict between Korea and Japan raises concerns over its negative effects on the Korean economy. 

Small-and mid-sized Korean firms exporting consumer goods to Japan might take a direct hit from the negative development. Hite Jinro, Korea’s biggest soju maker, saw its liquor sales in Japan drop sharply early this year. Soju is distilled Korean liquor. 

According to Japanese weekly magazine Shukan Bunshun, Tokyo is considering slapping higher tariffs on imported Korean goods, especially soju and dried seaweed, in retaliation for Korea’s ruling that called for Japanese firms to compensate Korean victims of Japan’s forced wartime labor. 

A number of Korean firms are importing various kinds of components and equipment from Japan. Along with Korean exporters of dried seaweed, importers may see their trade conditions worsen. I’m afraid to say it, but the soured relations between Korea and Japan may affect the Korean economy negatively. 

Conflict between Korea and Japan has led to discord in diplomacy and security, and is now spreading to the economic area. 

Last year, Japan was South Korea’s third-largest trading partner, after China and the U.S. Three-hundred and ninety Japanese firms are doing business in South Korea to produce 82-thousand jobs. Strained relations between the two nations are a big risk factor for Korean businesses that rely heavily on Japan for imports of parts, materials and equipment. Needless to say, it’s urgent to improve bilateral ties. 

Both countries cannot leave their icy relations unsettled forever. They need to maintain their economic relations at least in a complementary way. The combination of Japan’s capital and technology and Korea’s competitiveness in manufacturing and marketing will generate a great synergy effect. Their partnership will enable both sides to strengthen their positions on the international stage. With these positive aspects in mind, the two countries should make efforts to separate the economy from politics so they can prevent political conflict from escalating into economic problems.   

South Korea and Japan have overcome various difficulties and advanced their ties since they normalized diplomatic relations in 1965. 

Now, the Korean government hopes that the opening of the Reiwa era in Japan will help restore bilateral ties. If Korea is more committed to mending relations with Japan, and if Japan upholds the spirit of Reiwa or “beautiful harmony,” the two neighboring countries will hopefully be able to end their diplomatic friction, promote friendship and build a future-oriented relationship.