SK Chairman Proposes $300 Billion Korea-Japan Energy Market Integration

Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry, delivers opening remarks at the 15th Korea-Japan Chamber of Commerce and Industry Presidents’ Meeting at the Westin Sendai Hotel in Sendai, Japan, on Aug. 31, 2026. (The Korea Chamber of Commerce and Industry) SK Group Chairman Chey Tae-won has formally proposed establishing a comprehensive economic community between South Korea and Japan, arguing that South Korea faces growing limitations in navigating rapidly shifting geopolitical and economic challenges alone. His proposal calls for the two countries to pursue market integration and institutional cooperation comparable to that of the European Union (EU) in response to intensifying U.S.-China rivalry and an emerging geopolitical order marked by renewed competition among major powers. In a lecture on EBS’s Great Lessons aired on Oct. 14, Chey said South Korea had been able to achieve economic growth independently under the World Trade Organization (WTO)-led trading system, but that its ability to safeguard its security and economic interests alone had reached its limits amid growing international confrontation. Identifying Japan as the most suitable partner for protecting shared national interests, he advocated a comprehensive economic partnership extending well beyond conventional bilateral cooperation. Chey proposed energy as the first area for practical integration. South Korea and Japan spend approximately $300 billion annually on combined fossil fuel imports. He estimated that pooling their purchasing power and storage facilities could immediately reduce procurement and transportation costs by approximately 5% to 10%. Beyond fossil fuels, Chey identified nuclear power generation, renewable energy infrastructure and next-generation hydrogen value chains as essential areas for joint development. His argument is that ending inefficient competition over energy procurement and establishing a common market would serve both countries’ national interests as they navigate the capital-intensive energy transition. He also called on the two countries to move away from zero-sum competition in artificial intelligence (AI) and semiconductors and pursue a more efficient division of industrial roles. South Korea’s strengths in finished-product manufacturing and Japan’s expertise in high-purity materials and advanced equipment could create a mutually complementary industrial partnership. Chey particularly emphasized the importance of pooling resources to improve efficiency in the AI industry, where investment requirements are substantial. According to Chey’s proposal, an economic community between the two countries would have a combined gross domestic product (GDP) exceeding $6 trillion. This would make it an economic bloc comparable in scale to the world’s fourth-largest economy, after the United States, the EU and China. Such integration could provide companies with greater growth opportunities in a larger common market while strengthening the two countries’ ability to shape international economic rules rather than merely follow them. The proposal has also attracted considerable attention in Japan. In an extensive report on Oct. 16, the Nikkei highlighted the Korea-Japan economic community initiative, noting that the two countries face similar structural challenges, including population decline and sluggish economic growth, which increase the urgency of cooperation. Japan’s business community has also shown signs of a more receptive attitude toward closer economic ties, including through the Korea-Japan Business Conference held in May. However, significant obstacles remain before institutional integration can become a reality. A Japanese government official has expressed caution, citing public sentiment and uncertainty over the tangible benefits for Japan. Competition between the countries’ major industries and unresolved historical disputes also present challenges. According to a survey by the Korea Chamber of Commerce and Industry, approximately 70% of respondents in South Korea and 60% in Japan supported the proposed economic community. Chey said his proposal was inspired by independence activist Ahn Jung-geun’s Theory of East Asian Peace, urging both countries to rethink their approach to building a future for the next generation despite unresolved historical issues. The pace at which the proposed economic community takes shape is expected to depend largely on how quickly the two governments align their trade frameworks and establish effective private-sector consultation mechanisms.