South Korea–Japan Relations
Surviving the "Forced Labor" Dilemma

Various issues of history arising from the Japanese occupation of Korea at the beginning of the twentieth century have inhibited the progress of relations between South Korea and Japan. Japan’s reluctance to accept responsibility for its forceful occupation of Korea, its territorial claim to the Dokdo islets, and the Japanese government’s repeated amendment of guidelines on history textbooks to further justify its positions on these issues are but a few examples of the tensions that flare up from time to time, reversing the progress the two countries have made to strengthen their relations.

In South Korea, there have been leaders deeply worried about the issues of history inhibiting relations with Japan. President Park Chung-hee decided to normalize relations with Japan in 1965 through concluding a series of agreements. It was a courageous move, because he knew very well about the ferocious political backlash his efforts would meet with. President Kim Dae-jung issued the much-appreciated Kim-Obuchi Declaration, which elevated bilateral relations to a new height.

Irrespective of the efforts by these leaders, the average Korean still reacts vehemently when the aforementioned issues of history come to the surface. These negative emotions have been eagerly taken advantage of by progressive politicians in South Korea who are opposed to improving relations with Japan.

A Dilemma: The Korean Supreme Court’s Ruling on the Issue of Forced Labor

One especially contentious historical issue has been the use of forced labor during the Occupation Period. Korean victims of forced labor have brought their case to the Korean courts, demanding compensation for the illegal acts committed by Japan. These litigations took many years to be decided. Starting from the district courts in 2005, they went all the way to the Supreme Court, which ruled in favor of the victims and remanded the case to the lower court in 2012. It was not until October 2018, however, that the Supreme Court, meeting en banc, finally ruled in favor of the victims.

This ruling confronted the South Korean government with a huge dilemma. One of the agreements concluded in 1965 for the normalization of relations with Japan was the Claims Agreement. Since then, the interpretation and practice of that agreement by the government has been that the claims arising from forced labor had been settled in 1965. Now, however, the highest court of the land has ruled against that interpretation and practice, on the ground that the claims arising from the “illegal acts” of Japan were not part of the claims settled through the agreement.

The laborers and their families took the next step by demanding payment by New Nippon Steel and Mitsubishi Corporation, their former employers. Since these companies did not respond to a Korean court’s order, the laborers demanded that the court take possession of the assets these Japanese companies held in South Korea for payment. The Japanese government issued a stern warning about the dire consequences that the liquidation of these assets would bring to relations between the two countries.

The Moon Jae-in government continued demanding that the Japanese government respect the final ruling but took no measures to resolve the dilemma. The Korean court, however, began to take necessary measures to sell the assets held by Japanese defendant companies.

As a result, bilateral relations began to slide into a deeper pit. The Japanese government decided to ban the export of necessary materials to Korean semiconductor companies and removed South Korea from the so-called white list of countries enjoying privileged status in the Japanese export-control system. South Korea responded by threatening to suspend the implementation of the General Security of Military Information Agreement (GSOMIA). The militaries of the two countries became mired in tit-for-tats of alleged provocations, while exchanges of high-level officials declined in frequency. These developments occurred against the backdrop of continuing challenges to the rule-based international order, including the outbreak of the Covid-19 pandemic, the Russian invasion of Ukraine, North Korea’s testing of long-range and tactical missiles, and a global economic slowdown.

In South Korea, a large number of opinion leaders were deeply concerned about these developments. A consensus view began to emerge that the least problematic way to resolve the dilemma posed by the Supreme Court’s ruling would be for the governments and industries of South Korea and Japan to create a fund to provide third-party compensation for the victims of the forced labor on behalf of the defendant Japanese companies.

President Yoon’s Moves to Deal with the Dilemma

Inaugurated in May 2022, President Yoon Suk-yeol firmly believes in the values of liberal democracy, market economy, rule of law, and human rights underlying South Korea as a nation, as well as the rule-based international order built on these values. At the same time, he is deeply worried about the challenges presently buffeting the rule-based international order. Such beliefs and concerns led the Yoon government to issue South Korea’s Indo-Pacific strategy in December 2022. Yoon made it clear through the strategy that South Korea will work closely with like-minded countries to maintain the rule-based international order. This declaration met with warm welcome from many countries and organizations, including the United States, Canada, Australia, and NATO.

In Yoon’s view, Japan is South Korea’s closest neighbor, sharing the same values and the same set of strategic and economic interests. For that reason, he has prioritized addressing the dilemma over the forced labor issue so that the two countries can move ahead to further strengthen their relationship.

Yoon knew such moves would attract vehement opposition in Korean politics. In order to attenuate such a political backlash, government officials, including Foreign Minister Park Jin, diligently met with the victims of forced labor and their family members to hear their views. Although some of them were adamantly opposed to the third-party payment, a far greater number understood why the government was considering such a compromise. Yet even they firmly demanded that the Japanese government and the defendant companies issue an appropriate apology for the forced labor and that the defendant companies make voluntary contributions into the fund for the third-party payment.

The Korean government shared all these ideas and developments with the Japanese government and suggested that the two countries work together to resolve the dilemma. Specifically, it requested that the Japanese government play its part by making apologies and allowing defendant companies to contribute to the fund. Foreign Minister Park repeatedly said that South Korea was now ready to fill half the glass and expects Japan to fill the other half.

Unfortunately, Japan gave no indication that it was prepared to move in that direction. Yoon could have waited longer for Japan to adopt more forthcoming positions. But he seems to have thought that important momentum to improve relations with Japan was being lost and decided to make the move with the expectation that it would create the necessary momentum in Tokyo.

Yoon visited Japan on March 16–17 and met with Prime Minister Fumio Kishida, which in fact was the first meeting in Japan between the two countries’ leaders in twelve years. On the forced labor issue, Yoon said that South Korea would try to compensate the victims through the third-party fund and would not seek reimbursement from defendant companies. The two leaders also agreed to address some other outstanding issues, such as the Japanese ban on the export of materials to Korean semiconductor manufacturers and South Korea’s lukewarm implementation of the GSOMIA agreement.

The visit was of much significance, restoring a degree of confidence between leaders, governments, and peoples of the two countries after so many years of distrust and petty one-upmanship. Yet, so far as the forced labor issue was concerned, it was a missed opportunity. Yoon made the bold move, but the Japanese move was far below expectations. With respect to an apology, Kishida would not go any further than saying that he “confirms that his cabinet carries on the preceding cabinets’ positions on the issues of history.” With respect to defendant companies’ contributions to the fund, no progress has apparently been made.

The importance of the visit is thus being overshadowed by the forced labor issue in Korean public opinion. In a Gallup Korea poll conducted March 8–9, only 35% of Korean citizens supported Yoon’s proposal for third-party compensation. Nearly 60% were against the proposal. When asked about the reason for their negative opinion, many responded that it was because the proposal was not reciprocated by Japan through either an apology or defendant companies’ contributions. Such frustrated expectations among Korean citizens offer fertile ground for the opposition politicians to inflame anti-Japanese sentiments.

The Way Forward for South Korea and Japan

Given the developments discussed above, it is important that South Korea and Japan both take steps to resolve the forced labor issue. First and foremost, leaders in the two countries must understand the challenges presently buffeting the rule-based international order. The Yoon government issued its Indo-Pacific strategy in December 2022 from such a realization, and I think the Kishida government approved three new strategic documents (the National Security Strategy, the National Defense Strategy, and Defense Buildup Program) for similar reasons. It thus may be more than a coincidence that these documents were approved at almost the same time as South Korea’s adoption of the Indo-Pacific strategy.

On the basis of such a realization, the leaders in the two countries must be bold enough to rise above politics and take the actions necessary to deal with the challenges. That is why Yoon decided to resolve the forced labor issue irrespective of the negative political repercussions he would face. His bold move would have resulted in a far more positive way forward for both South Korea and Japan if it had been reciprocated by the Kishida government.

There are various explanations for why Japan could not fill the other half of the glass. These include Prime Minister Kishida’s relatively weak position in the Liberal Democratic Party, which is dominated by politicians with strong right-wing historical views; the ongoing local elections and national elections to fill the vacancies in the Diet; and Kishida’s trauma about the way the 2015 agreement on “comfort women” was de facto renounced by the Moon government, to name only a few reasons.

However, these justifications pale when considering the perilous geopolitical situation on the Korean Peninsula, in Northeast Asia, and around the world. South Korea and Japan must act with urgency to repair their relationship in order to work closely together to uphold the rule-based international order. The costs of compromising on the forced labor issue will be more than offset by the huge strategic gains for both sides.

It is for that reason that a large number of commentators in South Korea, the United States, and even Japan are calling on Prime Minister Kishida to reciprocate President Yoon’s move. As one U.S. observer who is deeply experienced in international relations in Northeast Asia recently wrote, “For now, it is Kishida who bears the responsibility to make sure that [the perils of the reversal in South Korea–Japan relations] doesn’t happen.”

Ahn Ho-young is Chair Professor at Kyungnam University and the former South Korean ambassador to the United States. He is a member of the Board of Directors at the National Bureau of Asian Research.

The views expressed are those of the author.