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Chilling Changes in the Japan–South Korea Relationship

Roh Daniel [Profile]


“In 10 years, even the rivers and mountains change.” This saying is deeply imprinted on the Korean psyche. If we accept this idea, then perhaps we have no call to rue the changes that have taken place in the post–World War II relationship between Japan and Korea. After all, the world of human affairs is even more variable than the world of nature. Half a century has passed since the normalization of relations between Tokyo and Seoul, and now the basic paradigm of bilateral ties that took shape during the postwar years is being rocked to its very foundations. In this article I would like to present two tableaus emblematic of the trouble in the relationship.

Tableau 1: Change at POSCO, the Icon of Cooperation

On June 8, the Commission on Verification and Support for the Victims of Forced Mobilization under Japanese Colonialism in Korea, an organ under the direct control of the prime minister of South Korea, announced the formation of a new body, the Foundation to Support Victims of Forced Labor by Japan. The main activities of the new foundation are the filing of lawsuits against Japanese “war criminal” corporations and the provision of compensation to victims of mobilization as laborers. According to the announcement, half of the seed money for the establishment of the foundation, 3 billion won, is to be provided by POSCO, Korea’s giant steelmaker. POSCO’s board had already decided in March 2012 to contribute 10 billion won to this organization.

Whether POSCO’s decision was one the company’s board reached independently or was something it felt obliged to do in the face of the popular mood in South Korea, it came as quite a surprise to people familiar with the tale of this company’s birth and growth. POSCO was the poster boy of postwar Japanese-Korean cooperation.

POSCO was officially established in 1968 as Pohang Iron and Steel Company, but the seeds for the steelmaker were planted in the spring of 1964. Park Tae-joon, who was to become the company’s founder, was in Tokyo at the request of President Park Chung-hee to assist in the negotiations on normalization of bilateral ties. A retired army major general, he did not have a regular job. During his stay in Japan, aside from participating in the bilateral government talks, he had a lucky set of encounters. He happened to meet Yasuoka Masahiro, a Neo-Confucian scholar, who took a liking to him and admired his composure. Yasuoka introduced Park to Inayama Yoshihiro, president of Yawata Iron & Steel Co. And this introduction led to the involvement of Inayama’s company (which in 1970 merged with Fuji Iron & Steel to become Nippon Steel) as the key contributor to the development of Pohang Iron & Steel—a well-known story.

Korean Modernization, Japanese Money

Pohang Iron & Steel enjoyed the full support of Japan’s business establishment, and it was also the biggest beneficiary of the compensation that Japan provided under the 1965 Treaty on Basic Relations between Japan and the Republic of Korea. Out of the total amount of $500 million ($300 million in grants and $200 million in loans), $120 million, or 24%, went to the new Korean steelmaker. This was the largest amount provided to any single corporation, excluding the $130 million deposited in the Korea Exchange Bank for trade settlements. The company was established with money from Japan as the flagship of Korea’s industrial modernization, and for the Japanese business community it has been a memorial to bilateral cooperation.

Given POSCO’s origins, people who value Japan-Korea ties may well find it hard to understand how a company like this could throw its support behind a foundation dedicated to prosecuting Japanese companies. They may even see this development as a cruel trick of history, and some may wish that Park Tae-joon were still alive. Incidentally, the POSCO board’s decision to provide financial backing to the foundation was made three months after Park’s death on December 12, 2011.

The Demise of the “1965 System”

If we step back, however, and look at the course of developments unemotionally, accepting the inevitability of change over time, we can see POSCO’s decision as one piece of a jigsaw puzzle—a bigger picture, which I would title “the demise of the 1965 system.”

The “1965 system” describes the set of arrangements and understandings grounded in the 1965 treaty normalizing bilateral ties and the accompanying agreement on the settlement of claims. My belief that this system is being dissolved was confirmed by an August 2012 statement of Shim Yun-jo in his debate at the Foreign Affairs and Unification Committee of the Korean National Assembly.  A national legislator and a former diplomat whose career included service as head of the North American Affairs Bureau in the Ministry of Foreign Affairs and Trade, he said that “Unlike back in 1965, Korea’s national strength has increased greatly, and we cannot manage [the Korea-Japan relationship] just with the 1965 Treaty on Basic Relations.”

Calls for reinterpreting the 1965 system are now widely heard in South Korea, where people are suggesting it was an “unnatural and unjust” byproduct of the Cold War. One prominent voice is that of the legal scholar Kim Chang-rok, who calls the 1965 system “a crude stitching up of the core issue, namely, imperial Japan’s rule over the Korean Peninsula,” which is therefore “fated to rip every time a problem emerges.”

  • [2014.10.21]

Political economist, scholar of Asian history, and writer. Born in Seoul. Earned a PhD in comparative political economy from the Massachusetts Institute of Technology. Has held academic positions including assistant professor at the Hong Kong University of Science and Technology, lecturer for the People’s Bank of China, research fellow at Hitotsubashi University, and foreign research fellow at the International Research Center for Japanese Studies. Currently a researcher at Kyoto Sangyo University, a position he assumed in 2014. Books published in Japan include Takeshima mitsuyaku (The Takeshima Secret Pact; 2008). Currently at work on a book titled Nikkan kankei no genshō to shinri: 1965–2015 (Image and Reality of Japan-Korean Relations: 1965–2015).

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