Japanese, South Korean business leaders pledge to beef up co-operation

South Korea and Japan should collaborate more on advanced technology, climate change and economic security, South Korean President Yoon Suk Yeol said Friday, looking ahead after the two sides agreed to put aside rancor over trade and historical issues.

"I think there is a lot of room for co-operation between the two countries in future high-tech new industries such as digital transformation, semiconductors, batteries, and electric vehicles,” Yoon told a gathering in Tokyo of business leaders from both countries.

“The governments of the two countries will do everything to help you interact freely and create innovative business opportunities,” Yoon said.

The meeting followed talks between Yoon and Japanese Prime Minister Fumio Kishida on Thursday that sought to turn a page on the longstanding grievances that have divided the two US allies. South Korea and Japan are seeking now to form a united front, driven by shared concerns over North Korea, China and Russia.

During Yoon’s visit, the first such formal summit hosted by Japan in 12 years, South Korea announced it was dropping its complaint to the World Trade Organisation alleging Japan’s unfair trade practices, while Tokyo said it will lift the export controls on high-tech goods crucial for computer-chips production, imposed in 2019, on shipments to South Korea.

Yoon Suk Yeol was the guest of honor at the Tokyo “business round-table” over a lunch of French cuisine attended by about a dozen business leaders from both nations.

Reiji Takehara, director of the International Co-operation Bureau at Keidanren, said the mood was very positive at Friday’s hour-and-a-half-long meeting, which was closed to media except for the opening remarks.

“There was a lot of laughter, and everyone was friendly. We didn’t sense even a tiny bit of tension,” Takehara told reporters.

The South Korean group was led by Kim Byong-joon, acting chairman of the Federation of Korean Industries, the nation’s top business group, who traveled with Yoon. Executives from Samsung Electronics, Hyundai and LG were also part of the entourage.

Yoon joked about his love for Japanese food and stressed there was “light at the end of a long tunnel” of troubled relations, according to a Japanese official who briefed reporters after the meeting at Keidanren Kaikan, the headquarters of Japan’s top business lobby.

Challenges remain. A 2018 South Korean Supreme Court decision ordering financial compensation from Japanese companies for forced labor during Tokyo’s 1910-45 colonial rule of the Korean Peninsula targets major Japanese companies Mitsubishi Heavy Industries and Nippon Steel Corp., both members of the Keidanren. Representatives from those companies did not attend Friday’s meeting.

Japan has refused to pay, stressing compensation issues were settled by a 1965 treaty.

Yoon's announcement that local funds will be used to compensate the victims, effectively lifting pressure on the Japanese companies, drew protests from those who suffered under Japan’s forced labor system and their advocates. They want payments from Japan and a fresh apology.

A shift toward more cordial ties between Seoul and Tokyo was strongly backed by the U.S. The White House applauded Kishida and Yoon’s meeting.

“And the United States will continue, of course, to support Japan and the ROK as they take steps to translate this new understanding into enduring progress,” said White House National Security Council spokesman John Kirby.

The Keidanren and the Federation of Korean Industry have set up a $200 million ($1.5 million) fund to promote exchanges among young people, Takehara said.

Since the normalization of relations in 1965, Japan has provided more than 100 billion yen ($750 million) in economic cooperation and aid, according to Japanese estimates.

Trade between the two countries accounts for no more than 10% of their total trade, suggesting there is room to grow. Despite friction at the government level, tourism has boomed, with travelers from each country being No. 2 in foreign visitors. So have informal cultural exchanges in the form of K-pop, anime and manga.

“The aim is to strengthen our partnership for the future,” Masakazu Tokura, chairman of Keidanren and Sumitomo Chemical Co., told reporters.