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Treating South Korea as the 'new Japan'

SOUTH Korea's economic successes label it as one of Asia's ''new Japans.'' Though the Republic of Korea (ROK) is not yet truly a ''new Japan,'' it has reason to hope that such a goal is attainable if nothing changes the rules of the game. There's the rub, however, for South Korea's successes constitute a double-edged sword. While its principal economic partners - the United States and Japan - are proud of the prosperity they helped create in Korea and welcome the reassuring strategic advantages that the ROK's new industrial prowess gives it vis-a-vis North Korea, they are also justifiably concerned with the mounting competition posed by South Korea. To be blunt, despite its assets for regional peace and prosperity, does either Washington or Tokyo want to see South Korea emerge as a ''new Japan''? Probably not.

Tokyo is increasingly explicit about its concern over South Korean competition. Japanese businessmen have grown accustomed to being beaten at their own game by enterprising South Korean industrialists, but they do not like it. Because of longstanding bilateral frictions and Japan's delicate strategic stake in Korean security, Tokyo cannot be too candid about its hopes to prevent South Korea from becoming another ''Japan.'' But Japan is not enthusiastic about providing technology and money that might foster an economic clone in its backyard.

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Seoul reacts cautiously to Japan's reluctance to see South Korea's successes proliferate at Japanese expense. Many South Koreans resent Japanese desire to constrain Asian competition, but Seoul is inhibited by its national interests from taking retaliatory actions. South Korea is too dependent on access to the Japanese markets to jeopardize relations gratuitously. Seoul seems confident that Tokyo will not allow its pique to propel Japan toward protectionist policies because of the adverse precedent such policies might set for Japan's European and American competitors. Also, keeping South Korea in ''its place'' could tempt Pyongyang to take advantage of such a setback to Seoul. Consequently , Seoul is not overly exercised about Japanese attitudes and does not want to show its concern, lest South Korean resentment might exacerbate an already hostile relationship, or the US might learn a lesson from Japan-ROK frictions.

South Korea can be reasonably confident that Tokyo will not take spiteful retaliatory actions that would cause damage to Japan's interest. But Seoul appears increasingly concerned that the US will use a broad brush in responding to the Japanese economic challenge, tarring South Korea in the process. Similarly, South Korea is wary of being prematurely labeled a ''new Japan,'' for fear that reactive protectionism directed at Japan would be transformed into preemptive protectionism focused on Seoul, aimed at nipping a new and potentially serious challenge in the bud. Numerous South Korean press articles have addressed this possibility in recent months, emphasizing the unfairness of equating South Korea's still limited successes with Japan's tremendous successes. They accurately note that South Korea's per capita GNP remains substantially lower than that of Taiwan, Singapore, or Hong Kong and far below that of Japan. Moreover, they regularly cite evidence that South Korea is a more cooperative ally for the US than Japan.

There is no doubt that South Korean concern is justified. And it would be premature to view South Korea today as the equivalent of Japan. Although Americans should sympathize with Korean concerns, we should also heed Japan's perceptions of the nascent South Korean challenge. Neither Japan nor the US should consider blocking the Korean challenge, thereby crippling an important ally in many other ways, but we must be aware that the South Koreans may indeed be creating another ''Japan'' right under our noses. If such new competition could be assimilated readily, there would be no reason to worry. But if Japanese-Korean competition drives both to seek larger exports to the US, exacerbating American problems, the US has reason to be concerned about South Korean emulation of Japan's successes.

Instead of taking preemptive measures to hamper South Korean competition, the US ought to use its considerable strategic leverage over the ROK to exact the economic concessions from South Korea that - in retrospect - we often wish we had extracted from Japan while it was in its postwar formative stages. Current and long-term US interests in Korea would be better served by integrating our economies, assuring the US access we are denied in Japan, and guaranteeing it a profitable stake in South Korean successes.

Clearly, there is something to be learned from the challenges posed by both of our Northeast Asian allies. If we want to forestall another ''Japan'' in Korea, let's preempt it skillfully while we still have the leverage. In this sense, Americans should discount South Korean protestations that any US action in this regard would be premature. Let's not repeat past mistakes with Japan in Korea and, thereby, multiply our problems. Moreover by trying to foster an improved and more malleable version of a ''new Japan,'' let's see if we can teach the old Japan a lesson about the nature of reciprocal free trade.Edward A. Olsen is associate professor of National Security Affairs, Naval Postgraduate School, Monterey, Calif.

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