January 12, 2009 / 1:31 AM / 10 years ago

FACTBOX: Key issues between Japan, South Korea

(Reuters) - Japanese Prime Minister Taro Aso is visiting Seoul for a summit aimed at boosting economic cooperation with South Korea, as the two countries try to minimize the impact of the global financial crisis.

About 20 top executives from Japanese firms, including Toyota Motor Corp, Canon and Nippon Steel, are accompanying Aso to meet South Korean business leaders.

Following are some key issues between Japan and South Korea.

TERRITORIAL SPATS

Japan and South Korea have a long-simmering feud over a set of desolate islands located about the same distance from both countries, called Dokdo in Korean and Takeshima in Japanese. They lie near fertile fishing grounds and possible maritime deposits of natural gas hydrate that could be worth billions of dollars.

Tempers flared in July when Seoul protested what it saw as a fresh claim from Tokyo to the islands it controls.

WARTIME HISTORY

Ties between the two states have been plagued for decades by problems stemming from Japan’s 1910-1945 colonial rule over the Korean peninsula. They include:

— “Comfort woman”: Tens of thousands of women, many from Korea, were forced to work as sex slaves for Japanese soldiers during World War Two.

Tokyo says claims for the South Koreans were settled under the 1965 treaty that established diplomatic ties. Seoul officially regards the issue as having been excluded from the treaty, but has not formally demanded Tokyo’s compensation.

— Yasukuni Shrine: Asian nations protested former Japanese prime minister Junichiro Koizumi’s 2001-06 annual visits to Tokyo’s Yasukuni Shrine, where wartime leaders convicted as war criminals are honored along with Japan’s war dead. Aso has not visited the shrine as premier.

— Atomic Bomb Victims: About 5,000 victims of the 1945 U.S. atomic bombings of Hiroshima and Nagasaki live overseas, most in North and South Korea. Victims living in Japan are entitled to medical treatment paid for by the government and Koreans have turned to courts in Japan for medical care compensation.

NORTH KOREA

Disabling the isolated state’s nuclear capability has been a major diplomatic issue for both Japan and South Korea, who are a part of international disarmament talks also involving North Korea, China, Russia and the United States.

Seoul has pressured Tokyo to give energy aid to Pyongyang that was promised in the talks, but Japan has refused to do so due to a dispute over abducted Japanese citizens.

Last month, the United States called for a halt in all energy aid to punish Pyongyang for failing to agree to a system to check claims it made about its atomic programs.

GLOBAL FINANCIAL CRISIS

Japan slid into recession in the July-September quarter after its second straight quarter of contraction. Meanwhile, concerns that South Korea is among the most vulnerable to the global financial turmoil have hammered the won.

In December, the two countries agreed on a currency swap deal of around $20 billion, effective until April 2009, which involves trading exclusively in the two countries’ currencies. Separately, they can tap up to $10 billion in a dollar credit line in the case of an emergency under the existing arrangement.

TRADE

Japan and South Korea are key export players to each other. Seeking to boost trade, they launched negotiations for a free trade deal in December 2003, but talks stalled a year later because of wrangling over tariffs, as pressures mounted in both countries to protect their farm sectors. In 2008, they opened working-level talks aimed at restarting the negotiations.

Sources: Reuters, Ministry of Foreign Affairs Japan

Reporting by Jon Herskovitz and Yoko Kubota, Editing by Dean Yates

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