What’s Behind Japan and South Korea’s Latest Attempt to Mend Ties?

Yoon and Kishida are by no means the first leaders to attempt to rebuild bilateral ties, and previous attempts have failed to reach the kind of long-term deal that would end historic tensions. But given the bitter give and take between the two countries in recent years, this month’s summit offers a sign of much-needed rapprochement as the two US allies seek to grapple with an increasingly belligerent North Korea and China’s growing presence in the Indo-Pacific. USIP’s Frank Aum and Mirna Galic discuss the recent agreement, the response of South Korean civil society and the importance of enhanced security cooperation between South Korea and Japan for US interests in the Indo-Pacific.

What is driving this latest push for reconciliation between South Korea and Japan?

aum: For decades, both countries have recognized the need to resolve historical issues of the past dating back to the Japanese colonial era and to improve their diplomatic and economic ties to address common challenges.

However, previous agreements intended to settle their differences, such as the 1965 Normalization Treaty and the 2015 Claims and Comfort Women Agreement, were often vague or did not pay enough attention to victims’ concerns for reasons of political expediency and national goals. These agreements allowed the two countries to improve relations enough to see gains in security, development, and prosperity. However, because they did not solve fundamental questions of the colonial era, the agreements remained controversial – with different interpretations and the threat of failure again and again.

For example, two 2018 decisions by South Korea’s Supreme Court required Japanese companies to compensate Korean victims of forced labor directly – a ruling that challenged Japan’s interpretation of the colonial era and the 1965 indemnity agreement. The decision quickly strained bilateral ties, turned economic ties upside down and threatened security cooperation between the two countries.

The recent deal between the Yoon and Kishida governments may follow the same unfortunate pattern. With both countries facing similar challenges in recent years – including Chinese coercion, North Korean belligerence, weak economic growth, inflationary pressures, supply chain resilience and climate change – there is significant incentive for the two to work together.

The latest bilateral agreement seeks to improve ties and restore cooperation by compensating South Korean victims of forced labor through a foundation made up of funds from South Korean companies rather than Japanese companies. This is intended to ease tensions surrounding the 2018 South Korean Supreme Court cases and allow Japan to maintain its argument that all claims were settled by the 1965 treaty and therefore Japanese companies need not pay compensation.

The deal appears to be working, at least at the government level: It facilitated President Yoon’s visit to Tokyo last week – the first bilateral summit between the two countries’ leaders in 12 years – where they agreed to conduct mutual diplomatic visits and Resume security dialogues, normalize an intelligence-sharing agreement, and take steps to resolve ongoing trade disputes.

Japan also lifted export controls for South Korea on three chemicals necessary for its high-tech industries. And business associations in both countries said they would allocate funds to support youth scholarships and cultural exchanges.

How did South Korean civil society and victims’ organizations react to the Yoon government dropping demands on Japanese companies to compensate victims?

aum: While the deal could work for the Yoon government, several Polls also show that about 60 percent of the South Korean public opposes the deal, suggesting it may not offer the deal both governments are striving for.

The Yoon government may have determined that the agreement, while disappointing for forced labor victims, was the best deal possible given Japan’s refusal to accept their demands. But at least three of the 15 forced labor victims pending court cases against Japanese companies have refused to accept funds that do not come directly from those companies. They have also brought a new lawsuit to collect money from Mitsubishi Heavy Industries, one of the Japanese companies involved.

And while Japanese Prime Minister Kishida reiterated the 1998 statement in which Japan expressed regret over its colonial rule, critics complained that the Japanese side failed to offer a genuine apology. One victim, Kim Seong-joo, said, “We can forgive if Japan says a word to us, we are sorry and we did something wrong. But there is no such word.” Claims by Japanese politicians that Japan is “a victim of the [lawsuit]’ or that the deal was a ‘total victory for Japan’ because ‘we didn’t have to admit anything’ only further angered South Korean critics.

The agreement’s inability to address victims’ concerns raises legal issues that could cause it to fall apart, much like previous efforts. By law, plaintiffs must consent to a third party paying a debt in order for the business to proceed. If the victims don’t agree, it’s unclear how South Korea’s Supreme Court will resolve pending cases that, based on previous rulings, could allow for the seizure and liquidation of Japanese company assets.

Any court decision that delays or prevents a favorable decision for the victims based on the political settlement could raise concerns about the independence of the judiciary, but a decision by the Japanese companies concerned to voluntarily donate funds to the foundation may help Convince victims to accept the funds.

What would enhanced military cooperation between Japan and South Korea mean for US efforts in the Indo-Pacific? What reaction might we see from China or North Korea?

Gaelic: Reviving security ties between their countries was reportedly on Yoon and Kishida’s agenda during their meetings in Tokyo. These include sharing intelligence, resuming bilateral security dialogues that have been suspended since 2018, and possibly establishing a framework for information-sharing on North Korea’s ballistic missile launches. All of this activity would benefit Japan and South Korea themselves the most, but the United States will also benefit from a strengthened security bond between its two allies.

Sharing intelligence and information between Japan and South Korea would increase deterrence against North Korea – something of immediate interest to the United States – especially as Japan has improved its domestic attack response capabilities. Increased bilateral military cooperation between Japan and South Korea could also lead to increased trilateral military cooperation between those countries and the United States.

More broadly, the entire US Indo-Pacific strategy rests on working with allies and partners in the region. It is easier to focus our approach on strengthening security in the Indo-Pacific and advancing a free and open Indo-Pacific – two of the goals of the government’s strategy – when our partners in the region are also able to work more closely together on such issues. The message this sends about the unity of allies and the ability of the United States and its allies in the region to overcome difficulties in the interests of shared priorities is also important.

Therefore, Yoon and Kishida’s efforts to improve relations between their countries are only seen as a plus from the perspective of the US government, which has consistently encouraged both sides and warmly welcomed the leaders’ initiative.

Not so much North Korea. The North Korean regime expressed its displeasure by firing an ICBM on the first day of the summit. Certainly, North Korea would prefer Japan and South Korea to be divided and less able to coordinate than united and cooperative. China’s official response, meanwhile, is muted, which makes sense: it would be difficult for Beijing, which wants to portray itself as a global peacemaker, to publicly criticize two neighboring countries for trying to improve bilateral ties.

Allied with both Japan and the South, the United States has played a significant – if sometimes counterproductive – role in mediating tensions between the two countries. How should the United States approach this latest effort to make a positive impact?

Gaelic: Bringing Japan and South Korea closer has long been a priority for the Biden administration, which has explicitly included the goal in its Indo-Pacific strategy. The United States has undoubtedly encouraged leaders to meet behind the scenes, and US shuttle diplomacy between the two countries is credited with helping host the summit.

The United States also invited Yoon on a coveted state visit after the summit announcement, perhaps to boost his image domestically. Continued positive US reinforcement and support of this kind to Japan and South Korea will be important as the countries deal with the complicated issues that underpin tensions between them. What is difficult is that while the United States can express support for, and perhaps influence, the efforts of the two governments, it cannot influence the views of the Japanese and Korean publics, including Korean victim groups, who ultimately must support government initiatives.

aum: All US administrations, including the current one, have tended to strongly support the reconciliation between Japan and South Korea, which facilitates forward-looking cooperation on diplomatic, security, and economic affairs.

This recent agreement is no exception. However, if the three countries desire a lasting, definitive solution to the historic problems that both minimizes the potential for periodic outbreaks of strained relations and maximizes the potential for optimal bilateral cooperation—perhaps even a bilateral South Korea-Japan alliance—then they should consider pursuing new and creative approaches to permanently resolve tensions between Japan and South Korea. Some possible actions include closing down and compensating victims appropriately, reconciling conflicting histories as much as possible, and providing appropriate commemoration and education for future generations.