South Korea to restore Japan's trade status to improve ties

South Korea and Japan have deep economic and cultural ties and are both key U.S. allies that together host about 80,000 U.S. troops. But their relations have often fluctuated mainly due to issues stemming from Japan's 1910-45 colonial rule of the Korean Peninsula.

At the center of the recent impasse was the 2018 South Korean court rulings that ordered two Japanese companies to compensate some of their former Korean employees for forced labor during Japanese rule. Japan refused to accept the rulings, saying all compensation issues had already been settled when the two countries normalized ties in 1965.

The history disputes spilled over to other issues, with the two countries downgrading each other’s trade status. Japan also tightened controls on exports to South Korea, while Seoul threatened to terminate a military intelligence-sharing pact with Tokyo.

After months of negotiations with Japan, Yoon’s government earlier this month announced it would use local funds to compensate the forced laborer victims involved in the 2018 lawsuits without requiring contributions from the Japanese companies.

Last week, Yoon traveled to Tokyo for a summit with Japanese Prime Minister Fumio Kishida, during which they agreed to resume regular visits and launch high-level economic security talks.

Ahead of the summit, the South Korean government said Japan had agreed to lift export restrictions on materials needed for key South Korean export items like semiconductors and smartphones, and that South Korea would also withdraw its complaint to the World Trade Organization once the curbs are removed. They said the two countries would continue talks on restoring each other’s trade status as well.

The conservative Yoon's push has triggered protests from some of the forced labor victims and liberal opposition politicians, who have demanded direct compensation from the Japanese companies and a direct apology from Tokyo over the forced labor. A public survey suggested about 60% of Koreans opposed Yoon's measures to resolve the forced labor issue.

In his Cabinet Council remarks, Yoon said he will order his trade minister to begin taking legal steps necessary to restore Japan on a “whitelist” of nations receiving preferential fast-track trade status.

He said both South Korea and Japan must remove obstacles that hinder the improvement of bilateral ties. “If South Korea preemptively eliminates obstacles, Japan will surely reciprocate,” he said.

Yoon said his government will also strive to help heal the pains of the forced labor victims and their relatives. But he said there are still those in South Korea who attempt to increase their political gains by “shouting exclusive nationalism and anti-Japan (slogans).”

The main liberal opposition Democratic Party responded that Yoon's condemnation of his critics cannot justify his Japan diplomacy that it said hurt South Korea's national pride and interests. Spokesperson Ahn Ho-young said Yoon must apologize and withdraw his third-party reimbursement plan for the forced labor victims.

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