Can a US$6 trillion South Korea-Japan economic bloc succeed?

A fraying global economic order could push South Korea and Japan towards deeper trade integration, with business leaders and analysts saying the two neighbours stand to benefit from such a partnership despite lingering historical wounds.

The two countries could draw closer as the era of relatively open global trade gives way to tit-for-tat tariffs and supply-chain disruptions due to conflicts in the Middle East and Ukraine.

SK Group chairman and Korea Chamber of Commerce and Industry chairman Chey Tae-won has in recent weeks proposed building a shared economic community between South Korea and Japan.

In an interview with Japan’s Asahi newspaper published this week, Chey said connecting the two countries more closely could create an economic bloc valued at US$6 trillion annually, ranking fourth globally after the United States, the European Union and China.

Lee Won-deog, a professor at the Institute of Japanese Studies at Kookmin University, called Chey’s proposal “bold” and said: “Korea-Japan economic integration is the spirit of the time as the global trade order fragments, superpower rivalry grows and regional blocs strengthen.”

Japan and South Korea could learn from France and Germany, whose post-war reconciliation began with cooperation in industries such as energy and steel and helped lay the foundations for the European Union, he added.