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A trade dispute between Japan and South Korea has a history. The immediate news here is that Japan imposed restrictions on exporting materials that South Koreans need for tech manufacturing. But behind this news is lingering South Korean anger over Japan's occupation of their country in the last century. NPR's Michael Sullivan reports from Seoul.
MICHAEL SULLIVAN, BYLINE: The uncomfortable history between the two countries is hard to ignore, like this vigil outside the Japanese Embassy every Wednesday, demanding justice for the so-called comfort women forcibly used as sex slaves during the occupation and the Second World War.
UNIDENTIFIED PROTESTER: (Foreign language spoken).
SULLIVAN: "The Japanese government should admit to war crimes," the speaker demands as the audience cheers. "It should make an official apology and legal reparations," she adds.
Japan has set up a fund for the dwindling number of women who survive, and it believes it settled the issue of compensation for forced labor decades ago in the agreement that normalized relations between the two sides. But in October, South Korea's Supreme Court ordered a Japanese firm to pay additional compensation to victims of forced labor. It was a tipping point.
NAM KI-JEONG: (Through interpreter) Where does the South Korean-Japan relationship currently stand? I think we're at about a nine, on the verge of reaching a 10, which means a total breakdown.
SULLIVAN: Nam Ki-jeong is a professor at the Institute for Japanese Studies at Seoul National University. He thinks the two countries still have time to walk things back, starting with the issue of export restrictions. Others aren't so sure.
SHEILA SMITH: It comes now at a time when Seoul and Tokyo are really in a very difficult effort to exacerbate tensions, to refuse negotiations, to ignore each other.
SULLIVAN: Before, when there was a problem, they'd fix it, says Sheila Smith, a senior fellow for Japan studies at the Council on Foreign Relations.
SMITH: Today it seems to be a cascading series of problems, ranging from, you know, court cases on POW compensation, reinterpretation of the bilateral treaty, to their military taking umbrage with each other for behavior in the East China Sea and now to this more economically specific competition between the two over how to manage trade.
SULLIVAN: And trade is where nationalism seems to be increasingly trumping pragmatism, with Japan slapping export restrictions on materials South Korean companies like Samsung use in smartphone displays and memory chips.
Earlier this month, Japan's Prime Minister Shinzo Abe even hinted South Korea might be slacking off enforcing sanctions against North Korea, a charge South Korea's President Moon Jae-in vehemently denies. He says his government is trying to do its utmost to seek a diplomatic solution to this dispute.
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PRESIDENT MOON JAE-IN: (Through interpreter) I hope that the Japanese government will respond accordingly and, in the least, avoid choosing a path that leads to a dead end.
SULLIVAN: A dead end that could have profound security implications in the long run - particularly for the military alliance between the U.S., Japan and South Korea - if Japan and South Korea no longer believe their security interests converge.
The Council on Foreign Relations' Sheila Smith.
SMITH: And if this bilateral relationship deteriorates any faster, I don't think we're going to be able to stop the animosity from spreading to influence the ability of our two alliances to effectively meet challenges that may be coming along from the - North Korea or from China.
SULLIVAN: She hopes the U.S. can help play the role of facilitator and convince both countries it's in their interest to remain allies, if not friends. Michael Sullivan, NPR News, Seoul. Transcript provided by NPR, Copyright NPR.