U.S. proposes ‘standstill agreement’ on trade row

Washington is urging Seoul and Tokyo to consider a “standstill agreement” in their escalating diplomatic row as the three countries’ top diplomats gather in Bangkok ahead of a regional security conference this week.

The United States urged Korea and Japan to sign such an agreement to buy time for the countries to negotiate their intertwined diplomatic and economic conflicts, a senior U.S. official told reporters Tuesday, according to Reuters.

It is the first intervention by the United States in an escalating spat that started with Japan’s restricting exports to Korea of three materials needed to manufacture chips and displays in apparent retaliation for Supreme Court rulings on compensation to Koreans forced to work for Japanese companies during World War II.

U.S. Secretary of State Mike Pompeo is expected to meet with Korean Foreign Minister Kang Kyung-wha and Japanese Foreign Minister Taro Kono in Thailand on the sidelines of the Asean Regional Forum (ARF) and other ministerial meetings related to the Association of Southeast Asian Nations (Asean) scheduled from Thursday through Saturday.

The Korean Ministry of Foreign Affairs on Wednesday confirmed that Kang and Kono will hold bilateral talks Thursday morning. The date for a trilateral meeting has not yet been confirmed but could take place Friday. Pompeo will likely meet separately with Kang and Kono first to hear their views, including on a standstill agreement, ahead of a trilateral meeting.

Japan has telegraphed that it may remove Korea from a so-called white list of countries given preferential treatment in export procedures in a cabinet meeting as early as Friday, a move that will sharply worsen already frayed bilateral relations. Tokyo has cited “trust” issues and national security concerns as official reasons for the trade restrictions on Seoul.

Korea has indicated that it will review all options if Japan maintains or deepens its trade restrictions, including possibly scrapping the General Security of Military Information Agreement (Gsomia). The Gsomia, a bilateral intelligence-sharing pact signed with Tokyo in 2016, is usually automatically renewed every year and is essential for trilateral security cooperation among Washington and its East Asian allies. Aug. 24 is the deadline for either country to raise an objection to a renewal.

Pompeo mediating some sort of standstill in Bangkok could put a brake on any further actions for the time being, giving time for Seoul and Tokyo to attempt to resolve the spat diplomatically.

When asked if he will be mediating tensions between Seoul and Tokyo, Pompeo replied Tuesday on the plane en route to Thailand that he will meet with Kang and Kono separately, “and then I’ll meet with the two of them together, and we will encourage them to find a path forward.”

Pompeo continued, “They’re both great partners of ours; they’re both working closely with us on our efforts to denuclearize North Korea.”

He added, “So if we can help them find a good place for each of their two countries, we certainly find that important to the United States, indeed, as well as to each of those two countries.

“We’re working with the Japanese, South Koreans on all kinds of different economic matters,” said Pompeo. “Our Indo-Pacific strategy is well on its way to bearing fruit for not only them but for the United States, and we have watched these coalitions build out.” He was referring to the Donald Trump administration’s strategy toward the Asia-Pacific, which is seen as a policy to contain China.

Washington was initially reluctant to intervene in the diplomatic row between Seoul and Tokyo, refraining from taking sides to avoid alienating either one of its allies.

David Stilwell, the U.S. assistant secretary of state for East Asian and Pacific affairs, despite indicating that Washington will not mediate in the diplomatic row during a visit to Tokyo, said in Seoul on July 17 after meeting with Korean officials that the United States “will do what it can to support their efforts to resolve” the situation.

U.S. President Donald Trump told reporters on July 19 that President Moon Jae-in had asked him to “get involved” amid the ongoing trade tensions between Korea and Japan.

“It’s like a full-time job getting involved between Japan and South Korea,” said Trump, but added, “If they need me, I’m there.”

John Bolton, the White House national security adviser, visited Japan and Korea last week. Diplomatic sources indicate that U.S. officials made a request for such a “standstill” during Bolton’s delegation’s trip to Tokyo and Seoul last week.

A “standstill agreement” is common in the world of finance, particularly in mergers and acquisitions, and is rarely used in diplomacy.

A source familiar with the situation told the JoongAng Ilbo Wednesday, “Even after Bolton’s trip, the atmosphere in Japan to drop [Korea] from the white list did not change,” adding that for Japanese Prime Minister Shinzo Abe, “the political impact would be too big to accept a standstill agreement without gaining anything.”

It would also be difficult for Seoul to accept a standstill agreement without Tokyo pledging to not remove Korea from the white list, which, if approved by the Japanese cabinet Friday, would take effect later this month.

The Blue House in a statement after a National Security Council meeting on Wednesday said that it “reconfirmed the need for all kinds of diplomatic efforts for the withdrawal of the Japanese government’s unfair export regulations,” and warned against “aggravating” the situation.

“While we are in a difficult and urgent situation with Japan, we share the understanding that there needs to be consultations between diplomats,” Kang told reporters as she arrived Wednesday at the airport in Bangkok. “We will strongly state our position and convey that our two countries’ relations must not collapse.”

Yoshihide Suga, the Japanese chief cabinet secretary, said Wednesday, he has seen the reports of a standstill agreement, but said “it is not true” that there had been a request to delay the dropping of Korea from its white list.

BY SARAH KIM [kim.sarah@joongang.co.kr]