(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000606550001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: January 12, 2017
• Document Release Date: April 12, 2011
• Sequence Number: 1
• Publication Date: September 18, 1986
• Content Type: MEMO

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DATE 912 2, ISC riLr
DOC NO C--
OIR 3
P & PD I
Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
18 September 1986
Japan-South Korea: Prime Minister Nakasone's Trip
Summary
Prime Minister Nakasone's visit to Seoul for the opening of the
Asian Games is a largely ceremonial event that spotlights his role in
handling the always difficult Japanese-South Korean relationship. Since
1983, the effort of personal diplomacy by Nakasone and President
Chun--established through an unprecedented exchange of visits and
one-on-one consultations over the last several years--has improved the
atmosphere between the two countries. Several contentious issues
remain, however, including trade, economic competition, and the
ever-present issue of Tokyo's potentially important dealings with
P'yongyang. Efforts by South Korean students and opposition parties to
exploit anti-Japanese sentiments, moreover, could mar the visit. In the
longer run, uncertainties surrounding the leadership transition in Seoul and
the tensions that succession politics could generate also increase the
possibility that South Korean leaders will manipulate these sentiments,
adding major strains to the relationship.
This memorandum was prepared by (Office of East Asian Analysis.
Information available as of 18 September 1986 was used in its preparation. Comments
and queries are welcome and may be directed to the Chief, Japan, Northeast Asia, OEA,
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Nakasone's Visit: Symbols Over Substance
Nakasone's 20-21 September trip to South Korea--viewed by many as an attempt
to make amends for the cancellation of a long-scheduled visit by the Japanese Crown
Prince and Princess this fall--provides the Prime Minister with another opportunity to
highlight his role in the management of the Japan-South Korea relationship.
Immediately after his election as Prime Minister in 1982, Nakasone pushed the
bureaucracy in Tokyo to break an almost two-year-long deadlock over a South Korean
request for a $10 billion aid package. The end of the impasse, which amounted to
Japanese agreement to provide $4 billion, set the stage for an unprecedented trip by
Nakasone as the first Japanese postwar leader to visit Seoul. During President Chun's
reciprocal visit in 1984--also a first--both Nakasone and the Emperor took the added
step of "expressing regret" for the years of Japan's colonial rule over Korea. Although
the South Koreans had demanded more explicit statements of Japanese contrition, the
remarks were viewed as a Japanese concession and a sign that Nakasone was willing to
go the extra mile in symbolically cementing a new relationship with South Korea. 25X1
Nakasone's visit to the Asian Games also has a purpose beyond the original one
of pacifying Seoul over the canceled royal trip. Recent comments by Japanese
Education Minister Fujio justifying Japan's colonization of Korea provoked a strong
reaction in Seoul, including threatened postponement of scheduled foreign ministerial
talks. Nakasone put the talks back on track by apologizing for the incident and firing
Fujio, but the flap, in our view, underscores both the potential volatility in the
relationship and Seoul's inclination to escalate its rhetoric and action if Tokyo missteps.
Indeed, South Korean students and opposition parties have protested Nakasone's plans
to attend the Asian Games, claiming he symbolizes the resurgence of Japanese
nationalism and Japan's desire for "mastery" over Koreans. Despite efforts by the South
Korean government to control opposition protests, violence could mar the visit.
Japan's relationship with South Korea is likely to face several tests in the next
few years. The fallout from South Korea's chronic trade deficit with Japan leads the list.
The issue has been a fixture for some time, but the trade gap may double this year,
reaching some $6 billion. The stronger yen relative to the Korean won, which is tied to
the dollar, has provided a major boost to South Korea's global exports and will probably
begin to trim the bilateral deficit beginning next year. Nonetheless, Seoul has already
announced measures to reduce the deficit with Japan. For example, South Korean
officials are encouraging companies to substitute domestic or US goods for Japanese
imports and may increase tariffs on some products that Koreans import primarily from
Japan.
We do not know if the recent appreciation of the yen will lower South Korea's
trade deficit with Japan sufficiently to head off other, more politically dramatic steps. In
the past, Seoul has raised the trade problem to the "political" level by accusing Tokyo of
anti-Korean discrimination in the Japanese market. A burgeoning of the deficit
presumably could provoke such behavior again. If fully implemented, the measures
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Seoul has taken also could bring the threat of retaliation from Japanese businessmen
and perhaps from the government (see chart). 25X1
Japan's ties to South Korea have limited Tokyo's dealings with P'yongyang to
private trade and other low-level exchanges. Although obviously interested in having
Japan play a more prominent diplomatic role, Nakasone has supported both US and
South Korean policies regarding the North during his tenure. In the past, however,
improvements in Japanese-South Korean relations have provided the opportunity for
Tokyo to take small steps toward the North. For example, Tokyo used the occasion of
the Chun visit in 1984 to announce the lifting of sanctions on private contacts with
Pyongyang that were imposed in the wake of the Rangoon bombing in 1983.
Notwithstanding Nakasone's record in moving in step with South Korea and the United
States on official dealings with P'yongyang, Nakasone and previous prime ministers have
watched for the potential for change and the possibility of a more activist approach to
P'yongyang:
? For many Japanese, including some in the Foreign Ministry, Tokyo's lack of
diplomatic contacts with the North represents a piece of unfinished postwar
business. Moreover, the fear that Tokyo could be left behind--as it was when
Washington began normalizing relations with Beijing in 1971--is another factor
motivating some to argue for a more assertive Japanese approach.
? A minority of ruling party members--particularly those in the Japan-North Korea
Friendship Association--also contend that Japan has a special responsibility to
help reconcile the two Koreas. The group has never been influential, although its
members have been used in the past as unofficial points of contact between
several Japanese leaders and P'yongyang. The opposition Socialist and
Communist Parties, meanwhile, press for full-fledged recognition of the North. F
At this point, Tokyo appears to have relatively few items of potential "new
business" pending with P'yongyang. But one area of possible movement is an unofficial
visit by North Korea's former Foreign Minister Ho Tam. The idea is in limbo because of
25X1
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Tokyo's standard insistence that North Korean visitors refrain from engaging in political
activities during trips to Japan--a demand the North Koreans have rejected so far in this
case.
Whether or not Tokyo allows Ho Tam to enter Japan without these usual
restrictions, several key factors will continue to shape the Japanese approach to the
North. Foremost among these will be North Korean behavior toward the South,
particularly in the sensitive period bracketed by the Asian Games this month and the
Olympics in 1988. Tokyo would find a tougher, more violent approach by the North a
compelling reason to shelve any new approaches to P'yongyang. South Korean stability
will also play a key role in Japanese policy deliberations. In our view, any turbulence in
South Korea's political succession process would dampen interest in new initiatives that
could further unsettle Seoul or send particularly troublesome signals to the North. As it
contemplates its options during this period, Tokyo is also likely to weigh not only its
reading of these critical factors, but US views as well. Finally, on the economic side,
North Korea's continuing inability to repay its $240 million debt to Japanese companies
could well temper Tokyo's enthusiasm for a more active approach toward the North. F_
Outlook: The Role of the Nakasone-Chun Relationship
Both Nakasone and Chun have considered their ability to better manage
Japanese-South Korean relations a personal success. Whether their successors will
invest as heavily in the bilateral relationship--Nakasone is expected to step down by
October 1987 and Chun in 1988--remains to be seen. In our view, friction could
increase after the two leave office. We do not expect Nakasone's departure to lead to a
change in Tokyo's policies toward the South. But we would not expect the next prime
minister to display Nakasone's flair for personal diplomacy or necessarily to give as high
a priority to promoting goodwill in Seoul, evident in the Prime Minister's effort to stay in
personal touch with Chun.
In South Korea, the transition also could encourage both opposition and
government leaders to manipulate anti-Japanese sentiments, a technique often used in
the past. President Chun's early policies, for example, such as his demands for a $10
billion aid package--which Japan "owed" Korea--and his dismantling of the old boy
network between the two countries, strained the relationship.
In the longer run, as the process of generational change in Japan and South
Korea has its effects on popular attitudes, both sides may be able to distance
themselves from the emotionalism that marks the current relationship and better
recognize shared interests. Tokyo and Seoul's shared security interests in stability in
Korea will continue to make the North-South military balance a common concern in the
1990s. Moreover, South Korea's attractiveness as a site for direct investment may also
increase the ties that bind as the two economies become more closely intertwined.
Nonetheless, we do not expect that even under these circumstances trade frictions will
abate.
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South Korean Projected to increase
Trade Deficit by $3 billion in 1986
Signed S & T agreement last
December but neither side is
obligated to take specific
action; substantive talks
continue at working level
Fingerprinting Korean Went to inkless system last
Residents in Japan year; Tokyo is now considering
change from every five years
to once in a lifetime system
Tokyo acceded to Seoul's
request and ordered
revisions in a high school
text that downplayed the
treatment of Koreans under
Japanese rule
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SUBJECT: Japan-South Korea: Prime Minister Nakasone's Trip
Distribution:
Original - Japan Branch, OEA
1 - Donald Gregg, Assistant to the Vice President
1 - Thomas Hubbard, Director, Office of Japanese
Affairs/State (4206)
1 - Charles Kartman, Deputy Director, Office of
Affairs/State (4206)
1 - William Brooks, INR/EAP/Japan
1 - Cora Foley, INR (8666)
1 - Norm Levin, State/SP (7330)
1 - David Blakemore, Director, Office of Korean
Affairs (5315)
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- Steve Danzansky, Staff Member NSC
1 - Bryon L. Jackson, Office of the Intelligence
Liaison/Dept. of Commerce
1 - Maureen Smith, Japan Desk/Dept. of Commerce
1 - Doug Mulholland, Office of the Special Assistant
to the Secretary for National Security/Dept.
1-
of Treasury
D/DCI/DDCI Executive Staff (7D60)
DDO/EA
NIO/EA (7E62)
NIO/Economics
C/EAC:] (5E18)
OGI/IIC/PI
OEA/NEA/Korea Branch
OEA/NEA/STI Branch
OEA/NEA Division
OEA/SEA Division
D/OEA (4F18)
C/Production/OEA
FBIS Analysis Group
DDI
Senior Review Panel
PDB Staff (7F30)
CPAS/IMC/CG (7G07)
CPAS/ILS (7F50)
C/PES (7E47)
NIC/AG (7E47)
DDO/EA Division
DDO/EAi^ (5C45)
LDA/EAD/AB (1 H 18)
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DDI/OEA/NEA/Japans I16 September 1986
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