Since the normalization of diplomatic relations in 1965, trade volume between South Korea and Japan has increased 352-fold over the past 60 years. As the trade structure between the two countries has shifted from a vertical division of labor to a horizontal cooperation model, the need for collaboration in the materials, components, and equipment (commonly referred to as "Sobu-jang") sector has become increasingly prominent.
The Korea International Trade Association (KITA) Institute for International Trade and Commerce announced these findings in its report, "The 60th Anniversary of Korea-Japan Diplomatic Normalization: The Current Status and Development Strategies for Korea-Japan Corporate Cooperation," released on June 19. According to the report, the trade volume between the two countries, which stood at $200 million in 1965, surged to $77.2 billion in 2024, marking a 352-fold increase.
Since the 2000s, the two countries have established themselves as intermediate goods trading partners, particularly in the information technology (IT) and heavy chemical industries. Previously, South Korea primarily imported textiles and chemical machinery from Japan and exported finished products, reflecting a vertical division of labor. However, as the proportion of intermediate goods transactions in key industries such as semiconductors, petroleum products, and steel increased significantly, the trade structure shifted toward mutually complementary cooperation.
The Korea-Japan intra-industry trade index rose from 0.25 in 1988 to 0.42 in 2024. This index approaches 1 as intra-industry trade becomes more active, indicating that the integration and interdependence of trade between the two countries have increased.
The report particularly emphasized that the two countries should seek new growth opportunities by cooperating on supply chains for materials, components, and equipment in advanced industries. According to a survey conducted by KITA, 47.4% of Korean companies and 59.2% of Japanese companies identified "support for supply chain cooperation in materials, components, and equipment" as the top policy priority that the Korean and Japanese governments should pursue.
This survey was conducted among 234 KITA member companies with export records to Japan and 49 Japanese companies operating in Korea as of May 2025.
The institute identified four promising sectors for bilateral cooperation: mobility, next-generation semiconductors, bio, and critical minerals and energy. In particular, it stressed the need to form joint consortia for technologies that combine transportation data and payment systems in the mobility sector.
In the next-generation semiconductor sector, the report recommended strengthening connections among design, manufacturing, and design solution partners, as well as establishing a Korea-Japan joint research and development (R&D) platform to facilitate this collaboration.
Kim Nayul, a researcher at KITA, stated, "For the two countries to grow together as partners in future industries, it is important to ease regulations, strengthen corporate investment incentives, and simultaneously expand cooperation channels in various ways, including technology and human resource exchanges."
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