Identity politics in Korea-Japan trade dispute and its implications for the international trading system

This paper aims to analyse a trade dispute between Republic of Korea and Japan that started in summer of 2019. The dispute between two neighbours and allies may have wider international implications: currently, this dispute is being considered by the WTO and decision on it could impact how similar disputes are treated in future. This research seeks to identify deeper mechanisms in development of the trade conflict and are rooted in events happened almost a century ago. The paper approaches the dispute from Korea’s perspective. Careful examination of layers of the conflict and a chain of events that preceded and followed it reveals a complex interplay of interests between various social and political groups in Korea. A catalysing role of identity politics in dispute development and subsequent internationalisation is discussed. It is argued that complex interplay of interests in Korean politics had created a venue for subnational players to exert influence on their own government and the regional balance and on how the dispute with Japan is treated. The paper contributes to studies of international actions (political and economic) based on identity that makes societies prefer repudiation of former injustices over immediate economic benefits and how such actions impact international trade. Research confirms that the hyper-interconnected nature of the world creates ways for identity movements to expand into the area of international trade policy. The paper also draws attention to the fact that such disputes undermine existing principles of the international trading system which currently does not have adequate tools for their resolution. Reduction of risks associated with similar disputes is in the interests of the international community and should base on blended solutions that incorporate institutional, political, and judicial elements.