South Korea proposes public foundation to resolve forced labour dispute with Japan (updated)

LG DISPLAY

06/03/2023 02:54

(Adds quotes from South Korean, Japan officials)
    By Josh Smith, Soo-hyang Choi and Sakura Murakami
       SEOUL/TOKYO March 6 (Reuters) - South Korea announced a
plan on Monday to resolve a dispute over compensating people
forced to work under Japan's 1910-1945 occupation of Korea,
hoping to improve poor relations that have impeded trade, and
political and military cooperation.
        The proposal was welcomed in Tokyo but faced immediate
backlash from some victims and South Korea's main opposition
party, who accused the government of capitulating to Japan.
  
    The disagreements over labour and women forced into Japanese
military brothels have bedevilled ties between the two pivotal
U.S. allies for years, but South Korean President Yoon Suk Yeol
has made a push to repair the relationship.
    Under the plan, South Korea would compensate former forced
labourers through a public foundation funded by private-sector
companies, Foreign Minister Park Jin told a briefing.
        "The soured South Korea-Japan relations should no longer
be neglected, and we need to end the vicious cycle for the
national interest, for the people," Park said. He said he hopes
Japan responds sincerely, including by "implementing its
previous public statements expressing remorse and apology."  
  
        None of the compensation will come from Japanese
companies, said Japan's Foreign Minister Yoshimasa Hayashi, who
told reporters he hoped for further deepening of ties between
the countries.
  
        "We welcome this as a step that returns Japan-South
Korea relations to a healthy one," he said.
  
    Poor relations between the two have been a point of concern
for the United States, which is seeking to present a more
unified front with its allies against the rising power of China
and threats from North Korea's expanding missile and nuclear
arsenal.
    A Japanese government source close to Prime Minister Fumio
Kishida told reporters that the United States has been pressing
both countries to reconcile, but that a main factor that
triggered Yoon's push for reconciliation is the geopolitical
threat from North Korea.
        
  
    SOUTH KOREAN FUNDS
    When Seoul first raised the proposal in January, it sparked
backlash from victims and their families because it did not
include contributions from Japanese companies, including those
ordered by South Korean courts to pay reparations.
    About a dozen protesters demonstrated outside as Park made
the announcement.
    "It's a complete victory by Japan, which has said it will
not pay a single yen on the forced labour issue," Lim Jae-sung,
a lawyer for several victims, said in a Facebook post on Sunday,
citing initial media reports of the deal.
    The main opposition Democratic Party denounced the plan as
"submissive diplomacy." 
        "It's a day of shame," An Ho-young, a spokesperson for
the party, said in a statement. "Japanese companies embroiled in
war crimes received indulgence without even budging, and the
Japanese government managed to remove a trouble by having the
grace to repeat past statements."  
  
    Asked whether Japanese companies will pitch in to
compensate, Park said both Japanese and South Korean businesses
were considering a plan to make voluntary payments, and he
understood that the Japanese government did not oppose such
contributions.  
    South Korea's Yonhap news agency, citing unnamed government
sources, had said that as part of the deal Seoul and Tokyo had
tentatively agreed to create a "future youth fund" to sponsor
scholarships with funds from companies in both countries.
    
    EXPORT CURBS
    Relations plunged to their lowest point in decades after
South Korea's Supreme Court in 2018 ordered Japanese firms to
pay reparations to former forced labourers. Fifteen South
Koreans have won such cases, but none has been compensated.    
    Japan has maintained the compensation issue was settled
under earlier treaties, and Hayashi said his government's stance
had not changed.    
    The row spilled over into a trade dispute, with Tokyo
tightening curbs on exports to South Korea of high-tech
materials used in smartphone displays and chips, including
fluorinated polyimides, photoresists and hydrogen fluoride.    
        South Korean tech firms such as Samsung Electronics
 005930.KS , SK Hynix  000660.KS  and LG Display  034220.KS 
were affected, although the firms found import routes through
other countries, worked to diversify sourcing including
investing in local materials firms, and some Japanese firms set
up production in South Korea.    
  
    South Korea denounced Japan’s moves at the time as a
violation of World Trade Organisation (WTO) rules, saying it
would take the necessary countermeasures including filing a
complaint. It also tightened trade regulations on Japan,
responding with a tit-for-tat move.
    Japan's Yomiuri reported on Saturday that Tokyo could lift
restrictions on exports of key electronics components to South
Korea, as part of a deal for Seoul to withdraw its complaint to
the WTO over the trade dispute.    
    Hayashi said the export curbs are separate from the forced
labour dispute, but Yonhap reported that trade officials from
both countries could make an announcement on the restrictions as
soon as Monday.

 (Reporting by Josh Smith, Soo-hyang Choi, and Ju-min Park in
Seoul, and Yoshifumi Takemoto, Chang-ran Kim, and Sakura
Murakami in Tokyo. Editing by Gerry Doyle)
 ((JoshSmith1@thomsonreuters.com;))