Japan-Korea Trade Relations Term Paper Example | Topics and Well Written Essays - 2000 words

Japan-Korea Trade Relations - Term Paper Example The contraction of the trade relations between Korea and Japan initiated between the years 1929 and 1933 which was the period of the Great Depression. However this contraction in the trade was temporary. The trade expanded again after the year 1933. The expansion was fast and the exports to and imports from Japan were 80% of the total exports and imports. The trade relations between Japan and Korea were severed after the World War II. As compared to the exports before the World War II, Korea’s exports were negligible. The exports in the year 1953 were merely 1% of the total Grand National Product (GNP); however the imports were 10%. This difference in exports and imports affected the Korean economy in a negative way and it created a very sophisticated system of exchange rates (Hong, 1979). Due to the Korean War, trade with Japan stimulated; however the extent of imports was far larger than that of exports. The scenario changed again the trade between Korea and Japan came down to a very insignificant rate of GNP by the end of 1950s. In the 1960s, trade between Korea and Japan began to grow again and by the mid of the decade the trade relations between both these countries were established. Both the imports from and exports to Japan rose by a significant degree and they accounted for a high proportion of the total imports and exports of Korea. From the perspective of Japan, exports to Korea were 2.8% of the total exports in the year 1962 (Haggard 1990). In the early 1960s, the President of Korea had initiated designing economic reforms that encouraged trade relations with Japan. Such reforms included unification of the exchange rates and the controls on exchange were... Any impact on these economies would affect the rest of the economies in the region; therefore it is highly important that both the economies remain stable. In the recent past, it has been observed that without any cooperation, these economies would not be able to handle the economic crisis in the Asia. The Asian economic crisis caused both these countries to promote a closer economic relationship. This time, it was determined that mere private sector cooperation would not suffice, but the economies will have to cooperate at governmental level. Thus, it can be inferred that the trade relations between Japan and Korea are just as important for the region as they are important for these two economies. According to Yamazawa, a framework is being designed that would help Japan and Korea to implement upon their plan for a closer economic relationship. The framework would also include a Free Trade Agreement (FTA) which would facilitate the trade among these two countries even more. The trade relations between Korea and Japan have not been quite smooth since their very inception. There have been certain factors that keep the trade between these countries from developing. According to historical facts, Japan and Korea have made a number of attempts to improve the trade. However, the imbalance in the trade between these countries kept increasing over the years till the trade deficit reached a very high point. The trades relations have been unfavorable since then, however both the countries have been trying to get improve the trade relations once again and discussions between the officials of both the countries are underway.