In an unexpected, last-minute turnaround, Seoul pulled back from the brink when it announced late on Friday that it would not suspend a military intelligence-sharing pact with Japan that had been set to expire on Saturday, and which Seoul had insisted it would not renew.

The bombshell announcement was made by the Blue House in a Friday evening press conference by Kim You-geun, the deputy director of the National Security Office at the Blue House, the South Korean presidential residence.

The General Sharing or Military Intelligence Agreement, or GSOMIA, had been set to expire after midnight. In an escalation of a historical-diplomatic-trade dispute with Tokyo, Seoul announced in August it would not renew the GSOMIA, the only formal pact linking the Japanese and South Korean militaries.

As such, it is highly symbolic of the cooperation which Washington seeks to forge to counter China, North Korea and Russia in the region.

Kim did say, however, that while Seoul would suspend the termination of the agreement, it reserved the right to nix GSOMIA at any time. Thus far, the agreement has been renewed on an annual basis.

In a further surprise at the same press conference, Kim revealed that South Korea was suspending its complaint against Japan at the World Trade Organization.

Meanwhile, Tokyo’s Trade Minister Toshimitsu Motegi said it would not be immediately placing South Korea back on a trade “white list,” though it would be entering discussions with South Korean on the matter.

The Moon administration has repeatedly said a Japanese concession on the trade front was the pre-condition for the renewal of the GSOMIA.

“Japan provided the reason for terminating GSOMIA. It’s contradictory [for Japan] to declare that [South Korea] can’t be trusted in regard to security and then to call for sharing military information,” Moon said at a town hall meeting on Wednesday. “If Japan doesn’t want GSOMIA to end, it needs to sit down with South Korea and work to resolve [this issue] along with its export controls.”

Only hours before the Blue House press conference, media had predicted that the GSOMIA was a dead duck.

“Defying US pressure, South Korea to end intelligence pact with Japan,” Reuters reported. “Seoul Remains Adamant against Renewing GSOMIA with Tokyo” stated the Korea Broadcasting System in an afternoon headline. A column posted in the Korean Times just hours before the announcement was headlined “Time to move beyond GSOMIA,” and confidently predicted: “Let us not get hung up on this relatively insignificant expiration of GSOMIA.”

Earlier on Friday, South Korean Defense Minister Jeong Kyeong-doo had cut short a trip to Saudi Arabia to return home ahead of schedule. Unconfirmed reports stated that both the South Korean defense and foreign ministries had argued against a termination of the GSOMIA.

A  humiliation for Moon

Koreans talk about a national, historical syndrome of sadaejui – being shoved around by the bigger powers that surround their country. And at first sight, the reversal of the stance on not only the GSOMIA, but also the WTO process, looks like a blow to the Moon administration.

In a country where anti-Japanese feeling – relating to Tokyo’s colonial rule of the peninsula and a widespread belief that Tokyo has not apologized sincerely or often enough – Moon’s tough stance against Abe had won broad public support.

Moon unilaterally ceased to abide by a bilateral, 2015 agreement on “comfort women” reached by his predecessor, Park Geun-hye, with Japanese Prime Minister Shinzo Abe. Subsequently, South Korea’s Supreme Court ruled that Japan had to compensate wartime forced laborers – despite a bilateral treaty and related compensation package worth hundreds of millions of dollars that had laid the issue to rest between the two capitals in 1965.

An angry Japan, asserting that South Korea was untrustworthy, responded by placing export restrictions on three chemicals that are key to South Korea’s semiconductor industry, then removed Seoul from a “white list’ of preferred export destinations.

Seoul complained to the WTO, citizens demonstrated and consumers launched boycotts of Japanese products. Then, in what now looks like an ill-judged move, Seoul announced it would not renew GSOMIA.

A newly pragmatic stance?

GSOMIA only entered force in 2016 after significant behind-the-scenes jostling from the United States, which constantly seeks to bring the two ever-squabbling Northeast Asia democracies together. Seoul’s announcement of the GSOMIA’s non-renewal drew unusually blunt and undiplomatic language from an exasperated Washington.

Secretary of State Mike Pompeo, Secretary of Defence Mark Esper and US Ambassador to Korea Harry Harris, as well as Congressional figures and an army of retired officials and pundits, all weighed in on the issue with public statements.

What has been said behind closed doors may be imagined, indicating that Seoul may have caved in under American pressure.

Still, some defense experts were upbeat about Friday’s last-minute reprieve for the GSOMIA, which they suggested signaled a new pragmatism in the Moon administration.

“I would not call it a humiliation, it was never in Korea’s interest to withdraw from GSOMIA,” Daniel Pinkston, a security and international relations expert at Troy University, told Asia Times. “It never made any sense, so the people in the Blue House who were behind it must have come to their senses.”

That analysis may be buttressed by a recent development. Moon reached out to Abe, and the two met for an 11-minute chat on the sidelines of the ASEAN summit in Bangkok on November 5. Although it is not clear what was discussed during those 11 minutes, the groundwork for Friday’s decision may have been laid.

Meanwhile, despite the about-face on GSOMIA, Seoul faces further woes in its alliance with the US. Amid reports that Washington is seeking a five-fold increase for the cost of stationing US troops on the peninsula, the US delegation to cost-sharing talks walked out of negotiations in Seoul this week.

Still, Seoul may take some consolation on the latter front. The US is also reportedly demanding Japan pay a four-fold increase.