Japan's diplomat issues warning: Trade suffers due to border disputes
The ongoing border dispute between Thailand and Cambodia, which escalated in July 2025, has caused significant disruptions to businesses, particularly those from Japan, and regional trade. Otaka Masato, Japan's ambassador to Thailand, addressed the situation at a briefing, expressing concern over the impact on Japanese operations in both countries.
Japanese businesses have invested heavily in the ASEAN region, particularly in Thailand and Cambodia, due to the region's connectivity. However, the border clashes have put expansion plans on hold for some companies. According to Mr. Masato, around 10 Japanese companies have already experienced direct impacts due to the conflict.
The disruption to border checkpoint operations and trade flow has affected regional supply chains linking Thailand and Cambodia. The fighting and martial law declarations near border districts have caused instability, undermining investor confidence and potentially delaying cross-border logistics crucial for Japanese companies relying on these trade corridors.
The humanitarian toll of the conflict is undeniable, a fact emphasized by Mr. Masato, who has visited the conflict zone. Displaced people in the area have expressed a desire for a return to normal life, rather than food or supplies.
Mr. Masato believes that everyone deserves peace and the opportunity to live normally again. Japan stands ready to support a ceasefire, to help de-escalate tensions, and to ease the suffering of those affected.
The border dispute is not just affecting Japanese companies but also undermining economic stability in the region. As one of ASEAN's greatest strengths is connectivity, this disruption makes it more difficult for companies to operate efficiently. The repercussions of the border dispute extend throughout Thailand's supply chain, with even a small car part having a major impact on companies.
Sustained bilateral dialogue with third-party facilitation or arbitration is seen as essential to definitively demarcate the border and prevent future clashes. ASEAN and international actors have pushed for peaceful conflict resolution mechanisms, emphasizing multilateral diplomatic engagement to de-escalate tensions and restore trade and regional security.
Confidence-building measures like reopening trade checkpoints, joint border patrols, and cultural exchanges could help reduce nationalist tensions and foster cooperation. Addressing the entrenched nationalist sentiments and political rivalries in both countries through inclusive political dialogue would be necessary to prevent flare-ups from political or familial provocations.
In summary, while a ceasefire is currently holding, the border dispute between Thailand and Cambodia continues to pose risks to stability, regional trade, and businesses such as those from Japan reliant on Southeast Asian supply chains. Lasting peace and economic normalization will likely require sustained dialogue, third-party mediation, and political compromises overcoming deep mistrust and nationalist politics.
- The escalating border dispute between Thailand and Cambodia, particularly the impact on Japanese businesses and regional trade, warrants concern from the financial sector as well, given the potential long-term economic ramifications.
- The automotive industry is one of several affected sectors, as disruptions to Southeast Asian supply chains could impact the production and distribution of car parts, causing delays and increasing costs for companies.
- The ongoing border conflict not only affects political relations but also contributes to the destabilization of news headlines, as it may exacerbate war and conflicts in the broader Asia-Pacific region.
- To ensure sustainable peace and economic growth, it is crucial for Thai and Cambodian leaders to engage in constructive dialogue, involving not just their governments but also international organizations and key industries such as finance, transportation, and business.
