Japan and S.Korea put aside rows to fight financial crisis
SEOUL (Reuters) - Japan and South Korea's embattled leaders pledged on Monday cooperation amid the global financial crisis, putting aside their countries' animosities in a bid to resuscitate the hard-hit Asian economies.
Japanese Prime Minister Taro Aso and South Korea's Lee Myung-bak, both under intense pressure domestically due to their export-dependent countries' financial woes, held brief talks in Seoul to discuss a coordinated response to the global crisis.
Their meeting comes after a trilateral summit with China last month, when the three countries vowed to work together to tackle the crisis in a rare show of East Asian solidarity.
"I believe the cooperation and our work with the international community will be of major help for the world economy to quickly overcome the crisis," Lee told a joint news conference after his meeting with Aso. Aso returned to Tokyo a few hours later.
Tokyo and Seoul will work closely to coordinate financial reforms and macroeconomic policy to tackle the global downturn and fight against protectionism, Lee said.
He said Aso has also agreed to back South Korea's membership in the Financial Stability Forum, a gathering of senior financial and monetary officials from around the world designed to control the impact of cross-border financial shocks. Japan, Singapore, Hong Kong and Australia are the only Asia-Pacific countries in the grouping.
Japan and South Korea are among Asia's hardest hit economies by the global financial crisis. Their stock markets have experienced steep declines, and there are fears unemployment will rise with major exporters slowing down or temporarily suspending production due to the global slowdown.
Aso, who brought some 20 Japanese business leaders, said he and Lee also wanted to bring new life to sputtering talks on a free trade deal, stalled by wrangling over tariffs.
SATELLITE AND STEEL
In a sign of business cooperation, South Korea's POSCO said it was in talks with Toyota Motor Corp to supply steel to the world's top car company which is trying to cut costs as it heads for its first-ever annual operating loss.
Mitsubishi Heavy Industries Ltd said it signed a deal with South Korea's Aerospace Research Institute where the Japanese company will launch the space agency's satellites.
The two countries are each other's third-largest trading partners after China and the United States. Japan-South Korea trade totaled $81.4 billion in 2007, up 4.8 percent from the previous year, according to Japan's foreign ministry.
Their brief and business-like summit largely steered clear of problems that clouded other meetings of the leaders of the Asian economic powers such as disputes stemming from Japan's 1910-1945 colonial rule over the Korean peninsula and a territorial row over desolate islets.
Kim Soung-chul, an expert on Japan at South Korea's Sejong Institute said the summit could help Aso at home.
"It was a chance to calm concerns that some may have had about Japan's diplomacy. There was a potential for conflict on territory and history, but that was averted," Kim said.
The leaders said they would work with U.S. President-elect Barack Obama's administration to move forward stalled international talks on ending North Korea's nuclear ambitions.
On Monday, the Japanese dailies Asahi and Yomiuri both showed support for Aso at around 20 percent, the lowest since he took office in September. President Lee Myung-bak's rating stands at around 23 percent.
(Additional reporting by Kim Junghyun; Editing by Jon Herskovitz, Jonathan Thatcher and Jeremy Laurence)
