What Happened

With the Japan-South Korea relationship deteriorating amid a small trade war, Seoul has moved to downgrade its intelligence relationship with its fellow U.S. ally. On Aug. 22, South Korea announced that it will terminate its bilateral intelligence-sharing pact with Japan, known as the General Security of Military Information Agreement, citing Japan's early August removal of South Korea from a national security export "white list." The pact will expire on Nov. 24. 

Why It Matters

The Japanese-South Korean intelligence-sharing deal formed part of the broader U.S. strategy to foster greater independent collaboration between the East Asian allies who undergird its regional strategy in countering China's rise. Their pact was meant to streamline, routinize and institutionalize intelligence-sharing, and its termination marks a particularly stinging setback for U.S. efforts, given Washington's high-profile moves to prevent the South Korean pullout. 

In and of itself, though, the agreement's end will not cut off intelligence-sharing between Japan and South Korea. The pact had been in force only since 2016, and leaks had suggested that South Korea had already narrowed the scope of information shared after progressive President Moon Jae In took office in 2017. In terms of mechanisms for sharing on a case-by-case basis, the two countries are still part of a similar trilateral pact with the United States on North Korea-related intelligence, and Washington has wider individual bilateral agreements with each. 

Politically, the cancellation will boost Moon's fortunes at home. He has adopted a hard-line stance toward Japan and its wartime legacy — a stance that fueled their current trade spat. Moon's administration had already been tepid on the unpopular intelligence agreement signed by his predecessor, and their growing disagreements have justified ending it. Given South Korea's long-standing trade deficit with Japan, nixing the pact serves as a way for Seoul to emphasize its resistance to Japanese pressure even as it lacks effective tools to hit back economically.

Background

Japan and South Korea are embroiled in a mounting trade war that began in early July when Japan enhanced scrutiny of key chemical exports to South Korea, followed by the removal in early August of South Korea from a list that had exempted exports from stricter controls. Mediation efforts by both the United States and China appear to have failed. The South Korea-Japan intelligence-sharing agreement that went into place in November 2016 under conservative President Park Geun Hye had been delayed after an initial attempt to forge a deal in 2012 failed. South Korea's advantage in human intelligence on North Korea was a boon for Japan, while South Korea benefited from Japan's satellite monitoring and submarine tracking abilities.