[Great Transition of Korea: Korea-Japan Future Cooperation] From Competition to Connection, the Next 60 Years of Korea and Japan

60 Years of Korea-Japan Relations:
Toward a Future-Oriented Partnership

Sangsik Jang, President of the Korea International Trade Association Institute for International Trade and Commerce

This year marks the meaningful 60th anniversary of the normalization of diplomatic relations between Korea and Japan. The decision made in 1965 was a bold move toward the future, transcending past grievances. Sixty years later, the two countries have become economic partners who have led East Asia’s industrialization together, alternating between periods of conflict and reconciliation. Now, they stand at another turning point.

Over the past half-century, Korea-Japan trade has evolved from a vertical division of labor to a structure of horizontal cooperation. The trade volume between the two countries, which stood at only $200 million in 1965, expanded 352-fold to $77.2 billion in 2024. Intra-industry trade has become active, especially in high value-added sectors such as semiconductors, steel, chemicals, and IT. Notably, the proportion of intermediate goods in Korea’s exports to Japan surged from 32% in 1988 to 78% in 2024, highlighting the clear mutual dependence in supply chains. Korea needs Japan’s precision machinery and materials, while Japan needs Korea’s memory semiconductors, showing that the two countries already share an industrial ecosystem.

The willingness to cooperate at the corporate level is evident. According to a survey by the Korea International Trade Association, 94.5% of Korean companies and 95.9% of Japanese companies are positive about expanding cooperation, citing “long-term trust-based transactions” and “access to each other’s markets” as the main reasons. Promising areas for cooperation include next-generation semiconductors, bio, mobility, critical minerals, and energy. For example, establishing R&D platforms to strengthen system semiconductor design capabilities, creating an ecosystem linking manufacturing and design for SMEs, mutual recognition of clinical data for new drug development (MRA), and standardizing transportation data and payment systems could all lead to real industrial synergies.

Cooperation in minerals and energy also forms the foundation of a partnership to respond to geopolitical risks. Both countries rely on energy imports for over 90% of their needs, and critical minerals such as lithium and cobalt are heavily concentrated in specific countries. By combining Japan’s expertise in overseas resource development with Korea’s energy utilization technology and expanding joint entry models into third countries, resource security can be strengthened. In fact, companies like POSCO and Marubeni, Korea Gas Corporation and JERA, and Lotte Chemical and Sumitomo Corporation are already pursuing joint projects in places such as Chile and Indonesia, and this is broadening the geographical scope of cooperation.

The rapidly changing international situation is another reason why cooperation between the two countries is necessary. Korea and Japan are caught in the whirlwind of supply chain restructuring amid US-China strategic competition and the spread of protectionism. The Trump administration, which began its second term this year, is undermining the free trade order by weaponizing tariffs. In this reality, it is difficult to expand solidarity based solely on the values of democracy. Korea and Japan, facing similar challenges in industrial structure, geopolitical environment, and labor markets, must transform themselves into a strategic survival alliance capable of overcoming crises together.

Korea and Japan also face similar social structural challenges, such as low birth rates, aging populations, regional decline, and digital transformation. These shared issues should lead to multi-layered cooperation that goes beyond the economy to encompass policy, local communities, and population strategies. In particular, people-to-people exchanges and joint projects centered on the younger generation are key pathways to ensuring the sustainability of mid- to long-term cooperation. The recent rise in mutual favorability among the 2030 generation and the expansion of tourism and cultural exchanges can become the foundation for building future trust, going beyond short-term trends. Narrowing the perception gap between generations and enabling tangible cooperation in daily life are the most realistic starting points for opening the next era.

If the past 60 years were about “managing” Korea-Japan relations, the next 60 years must be about “designing” them. To address complex challenges in technology, security, energy, and value chains, an integrated strategy that goes beyond piecemeal cooperation is needed. Now is the time to move from “connection” (yeon) to “integration” (gyeol). If Korea and Japan can design their future beyond crises, they will be able to stand side by side even amidst the turbulence of the global order.

Sangsik Jang, President of the Korea International Trade Association Institute for International Trade and Commerce