The Dec. 28 agreement between the Japanese and South Korean governments to resolve the wartime "comfort women" dispute is being hailed in Japanese business circles.
"Good diplomatic relations between the two countries is a major prerequisite for economic exchange," said one source with the Japan Business Federation, or Keidanren.
Japan-South Korea bilateral trade was worth about 9 trillion yen in 2014, and each country is the other's third-largest trading partner. South Korean electronics giants Samsung and LG Corp. are also major supply destinations of parts and materials for their Japanese counterparts. The economic links between the two nations are deep and important.
However, an annual meeting between the head of Keidanren and its South Korean counterpart had been suspended since 2008 due to the worsening diplomatic situation of recent years, and economic relations have also chilled.
Keidanren Chairman Sadayuki Sakakibara has been trying to improve ties with South Korean businesses since he assumed office in 2014, and managed to revive the annual meeting in December that year. Since then, Sakakibara has also visited South Korea and met with President Park Geun-hye, and called on both governments to settle their bilateral troubles, saying, "For the sake of stable economic exchange, stable diplomatic relations is indispensable." Even on the business front alone, the Dec. 28 agreement on the comfort women dispute has tremendous significance.
Figures in both the Japanese and South Korean governments have voiced high expectations for trade negotiations, including the Japan-China-South Korea free trade talks underway since 2013. The degree of trade liberalization and other issues have, however, made the talks involving China difficult.
"Political problems and trade problems are different things," commented one government source. "It's not easy to reach agreement."
The comfort women agreement, meanwhile, does not resolve all the Japan-South Korea conflicts stemming from Japan's colonial rule of Korea. Former forced laborers and their surviving family continue to pursue legal cases for compensation from Japanese firms, including Mitsubishi Heavy Industries Ltd. and Nippon Steel & Sumitomo Metal Corp.
Japanese companies that used forced labor have consistently maintained that "all issues of compensation for wartime activities were resolved in 1965 with the Agreement between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation." A representative of one of the Japanese firms named in the suit said, "Political issues have no relation to this litigation."