Diplomatic Representative of Japan Warns Trade Suffers Due to Border Disputes
The ongoing Thailand-Cambodia border dispute has taken a significant toll on Japanese businesses and regional trade, particularly affecting Japanese firms operating in both countries and regional supply chains. According to Japanese Ambassador Otaka Masato, about 10 Japanese companies have faced direct impacts from the conflict, which undermines the essential connectivity in ASEAN that Japanese investments rely upon.
The border clashes have led to the closure of key trade checkpoints since late June 2025, forcing exporters—including Japanese-affiliated businesses—to reroute shipments from road to maritime transport, causing severe delays. This logistical disruption also hinders broader regional trade, affecting exports to Cambodia and neighboring CLMV markets (Cambodia, Laos, Myanmar, and Vietnam).
For instance, Thai brands in Cambodia have had to suspend marketing activities and delay market launches due to these instabilities. The disruption has ripple effects, notably on automotive manufacturing where parts production has been affected, hindering efficient company operations. Many Japanese automotive manufacturers rely on parts produced by the affected companies, and a production stop due to the border clash could create a ripple effect across the entire manufacturing sector.
Mr. Masato, who has visited the conflict zone, emphasizes that people are suffering and believes everyone deserves peace and the opportunity to live normally again. He interprets the situation as one with a humanitarian toll, and Japan is ready to support a ceasefire, de-escalate tensions, and help ease the suffering of those affected.
Japanese businesses are directly impacted through operational disruptions and delays in supply chains. This disruption not only affects Japanese companies but also undermines economic stability in the region. Mr. Masato, who addressed the situation along the Thailand-Cambodia border at a briefing, expressed concern that the tensions have disrupted Japanese business operations in both countries. Some Japanese companies had plans to expand operations in both countries, but these have been put on hold due to the conflict.
Overall, the conflict has escalated into the most severe border confrontation in over a decade, involving military actions and significant civilian displacement, which further complicates economic activities and regional stability crucial for business operations. Japan has publicly urged both countries for peace and maximum restraint to resolve the conflict swiftly to restore trade flows and economic stability in the region.
"One of Asean's greatest strengths is connectivity," according to Mr. Masato. This disruption not only affects Japanese companies but also threatens economic integration that Japanese firms depend on in Thailand, Cambodia, and wider ASEAN. The current conflict is obstructing the connectivity, making it more difficult for companies to operate efficiently. Displaced people in the area expressed a desire to return home, indicating a desire for a return to normal life.
In summary, the border dispute between Thailand and Cambodia is disrupting Japanese businesses and regional trade. Many Japanese businesses have invested in the region, particularly in Thailand and Cambodia, for the purpose of connectivity. The ambassador's call for a swift resolution to the border dispute underscores the urgency of resolving the conflict to restore economic stability and peace in the region.
- The border dispute between Thailand and Cambodia has directly impacted Japanese businesses operating in both countries, causing operational disruptions and delays in supply chains.
- This logistical disruption is not only affecting Japanese companies but also undermining economic stability in the entire region, particularly the ASEAN, where connectivity is crucial for business operations.
- The ongoing conflict has escalated into the most severe border confrontation in over a decade, involving military actions and significant civilian displacement, which further complicates economic activities and regional stability.
- The border clashes have led to the closure of key trade checkpoints, affecting regional trade, exports to Cambodia, and neighboring CLMV markets, as well as forcing businesses to reroute shipments and causing severe delays, especially those in the automotive manufacturing industry.
