The twin issues of North Korea and history continued to dominate Japan-Korea relations in the second quarter of 2005. Unfortunately, little progress toward resolution was made on either issue. In dealing with North Korea, Japan continued to mull sanctions or other measures against the North, although the government did not take any actions toward that end and Prime Minister Koizumi Junichiro publicly disavowed sanctions in early June. In mid-June, South Korean President Roh Moo-hyun and Koizumi met in Korea for a summit that failed to bring any progress on the range of issues between the two countries, from the disputed Tokdo/Takeshima territory to the issue of Yasukuni Shrine visits and how Japan’s middle-school textbooks treat the past. On the economic front, Japan and South Korea continued to deepen their relationship. However, increasing economic interdependence has hardly dampened political disputes between the two countries.

Still a chill in Japan-North Korea relations

With the Six-Party Talks in limbo during the spring, and with the ultimately false prediction that North Korea would conduct a nuclear test heightening tension, Tokyo’s reconfirmation of its commitment to the earliest possible resumption of the Six-Party Talks was accompanied by discussions about hardline alternatives if the talks should fail to occur. On April 7, Japan’s Nihon Keizai Shimbun reported that Japan, in consultation with the U.S., was considering setting a June deadline for North Korea to return to the Six-Party Talks. High-ranking officials, including Japan’s Foreign Minister Machimura Nobutaka and U.S. Secretary of State Condoleezza Rice, agreed to take the North Korea nuclear issue to the UN Security Council (UNSC) if North Korea continued to refuse to resume negotiations. Later in mid-May, a proposal for five-way talks excluding North Korea was under review, with Abe Shinzo, a senior official in Japan’s ruling Liberal Democratic Party (LDP), warning that economic sanctions were a clear alternative if talks with North Korea failed. However, on June 25, Prime Minister Koizumi clarified that Japan could not just impose sanctions and settle the issue since it would have to respect views of the other countries in the Six-Party Talks and cooperate with its neighbors.

North Korea seems to have made every verbal effort to isolate Japan from the six-party process and the international community; the Associated Press reported April 4 that North Korea said it remained committed to the Six-Party Talks, but demanded Japan withdraw from the talks because Japan’s participation only complicated the problem. It denounced Japan for attempting to gain a permanent seat on the UNSC, saying that Japan was not qualified to be even a member of the world body. Not surprisingly, North Korea’s reaction to Japan’s moves to submit the nuclear case to the UNSC was fierce, saying that it would consider such actions a “declaration of war,” while calling Japan’s suggestion for five-way talks a “silly act.”

In the meantime, the heat of the abductees issue between the two countries seems to have abated slightly compared to the first quarter of 2005, although the issue remains a bitter controversy between Japan and North Korea. Kyodo News reported on April 13 that North Korea demanded once again that Japan return the cremated remains of Japanese citizen Yokota Megumi abducted by the North in 1977, but Japan dismissed the call. The major point of contention has been whether the ashes provided by Pyongyang really were Yokota’s.

Hostile popular sentiment in Japan against North Korea remained unchanged. On April 24, about 6,000 people rallied in Tokyo demanding sanctions against Pyongyang. When the newly insured North Korean ferry Mangyongbong-92 re-entered the northern Japan port of Niigata on May 18 for the first time this year, it was met by protesters at the port, shouting “Give us our families back.” In late June, some 100 abductees’ families and their supporters had a sit-in in front of Koizumi’s office, demanding economic sanctions against North Korea to account for their loved ones. Meanwhile, stories of Japanese abductees to North Korea blanketed Japanese media. In addition to 13 Japanese citizens that North Korea has admitted to kidnapping in the 1970s and ‘80s, the National Policy Agency of Japan concluded that Tanaka Minoru was another victim, abducted by North Korea in 1978. He will join 10 other Japanese currently listed by the Japan government as additional abductees by the North.

Despite the difficulty of gauging the direct impact of Japan’s recent steps toward economic sanctions, the recent evidence seems to indicate that the North Korean economy has been negatively affected. Asahi Shimbun reported April 11 that North Korean clam imports fell by 91 percent after Japan implemented a stricter application of laws in January against mislabeling of shellfish origins. As a result of the new ship insurance law Japan enacted in March, Joongang Ilbo reported that port authorities expect that the amount of imported North Korean goods such as crabs will drop to a quarter of last year’s amount, since only 2.5 percent of North Korean ships are insured.

The cool relationship was transferred onto the soccer field. The Japan-North Korea qualifying match for a berth at the 2006 World Cup in Germany was played behind closed doors in Thailand as penalty for North Korea’s bad sportsmanship during the February Iranian match in Pyongyang. Then, fans rioted, throwing refuse, and attacking the Iranian players’ bus. As the Japanese viewed North Koreans behaving badly, they must have wondered what their reception would be in June; after all, the Iranians are supposedly friends of North Korea. The venue move took pressure off the Japanese. Japan defeated North Korea 2-0 on June 8. North Korea has lost all five games in its group, while South Korea qualified for Germany on June 8 as well, beating Kuwait 3-0 in Kuwait.

Stalled Japan-South Korea relations

Approval of the contentious history textbooks by Japan’s Education Ministry on April 5 opened the quarter and foreshadowed the tumultuous road ahead for Japan and South Korea, and indeed, between Japan and the entire region. Japan screens history textbooks every four years. This year’s screening came when Japan and South Korea were at odds over the sovereignty of the Tokdo/Takeshima islets. Mainichi Shimbun reported on April 6 that an approved version of history books describes the Tokdo/Takeshima islets as “illegally occupied by Korea” instead of the initial description of “disputed region,” which was changed upon instructions from the Education Ministry.

The textbooks published by Tokyo Shoseki, Osaka Shoseki, and Nippon Shoseki as well as by the rightwing Fusho Publishing comprise 65 percent of Japan’s middle school textbook market, all of which include the claim that the Tokdo/Takeshima islets are Japanese territory. On April 6, the Chosun Ilbo quoted Japan’s Asahi Shimbun, which reported that other publishers were asking the Education Ministry to make revisions that followed the examples of Tokyo Shoseki and Osaka Shoseki, whose textbooks are ranked no. 1 and 2 in adoption rate, saying that “if a textbook is missing content found in other texts, it doesn’t get adopted,” according to one publisher.

Compared to 2001, when only 0.039 percent of schools adopted a controversial history textbook by Fusho Publishing because of resistance from civic groups, the Japanese Society for History Textbook Reform (Fusho Publishing) believes that this year they succeeded in infiltrating their influence onto the education committees of local governments. Upon receiving Ministry of Education approval, Fusho released a statement saying that their history textbook fits the government’s guidelines’ goal of instilling in students a love for Japan’s history and making them aware of their national identity.

As expected, South Korean reaction was fierce, calling for the immediate deletion of the description of the Tokdo/Takeshima islets as “illegally occupied by Korea.” On the sidelines of the Asian Cooperation Dialogue forum, South Korean Foreign Minister Ban Ki-moon, in his first meeting with Foreign Minister Machimura since the territorial disputes erupted in late February, said that Korea would “never permit” Japan to claim the islets in its textbooks, but failed to win a promise of immediate corrections to the textbooks. In Germany, President Roh told the German press that “Japan’s attitude does not accord with the universal values human society needs seek” and added that Prime Minister Koizumi’s visits to Yasukuni Shrine are “a tremendous insult to Korea and China.”

On April 13, a South Korean congressional delegation called the “Special National Assembly Commission for safeguarding Tokdo and dealing with Japan’s history distortion” visited Foreign Minister Machimura to protest the textbooks. Machimura expressed deep regrets for inflicting pain to South Koreans until 1945, but told them that it was unacceptable for Korea to demand deletion of individual historical facts in the textbooks. Koizumi urged both sides to “control emotions and consider the bilateral friendship,” while the Foreign Ministry’s Assistant Press Secretary Chiba Akira stated that textbooks’ description of Japan’s wartime past does not necessarily reflect official Japanese policy. However, Education Minister Nakayama Nariaki dismissed criticism that his ministry had influenced Fusho Publishing to change the draft to state that South Korea is “illegally” occupying the islets. He went on to say that it was natural to teach how far Japanese territory extends as background knowledge. Acting LDP Secretary General Abe joined in criticizing South Korea (and China), saying that they were meddling in Japan’s domestic affairs while Japan never complained about their textbooks. Machimura also said that Tokyo will review the history textbooks of South Korea and China and request their revision, as well.

Meanwhile, critics within Japan, who had tried to discourage the controversial textbooks, were heard very well by the Korean media. On April 6, civic groups like Children and Textbooks Japan Network 21 declared that they would begin anti-adoption campaigns against Fushoda’s textbooks. The group said it would hold about 2,000 seminars nationwide to inform schools, students, and parents about the textbooks’ problems. The Japan Teachers’ Union also plans to actively check pressure from high-ranking government officials and education committees of local governments who are advocating the history distortion, while opposing the adoption of the Fushoda textbooks. The Japanese media reaction was divided with the Asahi Shimbun and the Sankei Shimbun battling over the issue. In response to the Asahi’s editorial saying that the Fushoda textbooks lack a sense of balance, the Sankei accused the Asahi of “infringing the freedom of the press by eliminating particular textbooks.” These exchanges reflected disagreements within the Japanese society and media. The Sankei Shimbun is affiliated with Fushoda.

By late April, as the accusations and criticisms spiraled upward, leaders of both countries tried to make some gestures of conciliation, which unfortunately turned out to be less than successful. President Roh sent a congratulatory message to Mindan Shimbun, a newspaper for Korean-Japanese, upon publication of its 2,500^th edition, saying that Japan and Korea share the same destiny in Northeast Asia. On Japan’s part, Prime Minister Koizumi expressed deep remorse for Japan’s aggression against Asian countries at the Asia-Africa Summit in Jakarta. However, the apology was diluted by the visit of some 80 Japanese lawmakers to Yasukuni Shrine the same day as Koizumi’s apology, which resulted in a less than friendly response from South Korea. The conservative South Korean newspaper Chosun Ilbo, reporting on both Koizumi’s apology and the Japanese Diet members’ visit to the shrine, asked “Is this an apology?” In early May, Koizumi’s personal letter to Roh delivered by Takebe Tsutomu, chairman of the LDP, and the secretary general of New Komeito party, Fuyushiba Tetsuzo, met with a rather cold reply from Roh, calling for Japan “to follow words with actions.”

Another round of diplomatic fireworks was set off by Koizumi’s comments during his Moscow visit for the 60^th anniversary of the defeat of Nazi Germany that Japan has done sufficient critical self-examination, and the statement by Nakagawa Hidenao, a senior LDP lawmaker, that he thinks Koizumi will pay a visit to Yasukuni Shrine this year. While Koizumi remained adamant that he visits Yasukuni Shrine as a private individual and not as a government representative and that other countries should not interfere in the way of mourning, parts of Japanese society showed deep concern over his attitude toward Yasukuni Shrine given the deteriorating relations with South Korea and China.

Japanese public opinion – although divided – appears to be leaning toward a less confrontational approach to these issues. A Mainichi Shimbun poll on April 16 and 17 showed that 76 percent of 1,019 respondents said that Koizumi was not doing enough to improve Japan’s relations with China and South Korea. Regarding his visit to Yasukuni Shrine, 45 percent said that he should no longer visit the shrine, up 4 points from the survey in December last year. Around the same time, another poll conducted by South Korea’s Donga Ilbo, Japan’s Asahi Shimbun, and the Chinese Academy of Social Sciences revealed that 94 percent of Koreans and 61 percent of Japanese thought that bilateral relations were not going well, which was a 34 percent and 35 percent increase for Korea and Japan, respectively, compared to the results of the 2000 survey. The survey also showed that 63 percent of Koreans “disliked” Japan while only 8 percent “liked” Japan. By late June, according to the poll by the Asahi Shimbun, 52 percent of Japanese said that Koizumi should stop visiting Yasukuni Shrine, which was up from 49 percent who had given the same reply in May. Asked to give one reason, 72 percent of Japanese respondents chose considerations of the views of neighboring countries, while 13 percent said because Yasukuni enshrined Class-A criminals.

The popular sentiments against Koizumi’s visit to Yasukuni seemed to be shared by more high-ranking government officials and politicians of the Japanese government as the situation worsened. New Komeito, LDP’s coalition partner, has been more vocal in its opposition to the prime minister’s visit to Yasukuni, saying that his visits could undermine the foundation of the ruling coalition. In the meantime, LDP Diet affairs chief Nakagawa Hidenao suggested enshrining Class-A war criminals somewhere other than Yasukuni to prevent Japan’s ties with Asian neighbors from being further strained and asked for the families of the war criminals to agree. In response, according to a Japan Times report on June 12, the association of families of the war dead asked Koizumi to show more consideration for Japan’s neighbors so that “the spirits of the war dead rest in peace.” Opposition to the Yasukuni visits also came from five former prime ministers of Japan – Miyazawa Kiichi, Murayama Tomiichi, Hashimoto Ryutaro, Mori Yoshiro, and Kaifu Toshiki. They asked Koizumi to refrain from visiting Yasukuni Shrine to avoid further damaging Japan’s ties with its neighbors.

Two events highlighted the strained ties between Japan and South Korea, casting clouds over prospects for the upcoming summit between Koizumi and Roh. On June 2, Japan and South Korea decided to end a 33-hour standoff over control of a South Korean boat, Sinpung, suspected of operating illegally in Japan’s exclusive economic zone (EEZ). Disagreements centered on 1) whether the boat had been illegally operating in Japan’s EEZ, 2) which country had the right to investigate the boat, and 3) whether Japan Coast Guard personnel used excessive force when they boarded the Sinpung. The eight Japanese and five South Korean Coast Guard vessels were in a standoff with the Sinpung sandwiched between them in rough seas about 60 km northeast of Tsushima Island (25.6 km off Gangjeol Point of Ulju County.) Another controversy arose when Japan’s Vice Foreign Minister Yachi Shotaro remarked that Japan was reluctant to share intelligence and cooperate with South Korea due to U.S. mistrust of South Korea, a comment that angered Seoul.

The June 20 Koizumi-Roh summit after such a series of diplomatic run-ins was largely viewed as a poor attempt by both countries to narrow the differences on history issues. Although the summit was a part of regular “shuttle diplomacy” efforts, it lacked working-level consultations on the agenda due to the strained ties. Roh urged Koizumi to stop visiting Yasukuni Shrine and suggested setting up a new monument as an alternative to Yasukuni. Koizumi is said to be willing to consider the option. Despite the failure to reach agreement on history issues, there were some achievements: Koizumi pledged that Japan would return the remains of South Koreans forcibly conscripted during Japanese colonial rule, to return the Bukgwandaecheopbi (a stone monument), to provide support to Korean atomic bomb victims, and to increase flights between Kimpo and Haneda airports.

Interlocking economics

In contrast to the political strife between the two countries, economic interaction continued to deepen, and there were some positive signs pointing to further developments. Even so, Japan-South Korea economic ties progressed slowly this quarter, burdened by the diplomatic disputes between the two governments. On April 9, Japan’s Finance Minister Sadakazu Tanigaki, after a meeting with his counterpart Han Duck-Soo on the sidelines of the Inter-American Development Bank’s annual meeting, agreed to make an effort to complete negotiations on a free trade agreement (FTA) this year. In addition, businessmen from both Japan and South Korea issued a joint statement at the 37^th Korea-Japan Business Conference on April 15 that said the FTA between the two countries would be “the very first step that signifies the two countries moving toward a strategic partnership of the 21^st century.” On May 4, the Nihon Keizai Shimbun reported that China proposed a study group to promote an FTA between South Korea, Japan, and China that would bring governments, business, and academics together. Inside Japan, The Japan Times on April 20 reported that private-sector members of a key government economic panel – Toyota Motor Corp. Chairman Okuda Hiroshi, Ushio Inc. Chairman Ushio Jiro, Osaka University Professor Homma Masaaki, and University of Tokyo Professor Yoshikawa Hiroshi – stressed the need for Japan to “expand high-quality trade agreements” with the economies of Asia, including South Korea.

On the currency side, Bank of Korea Gov. Park Seung and Bank of Japan Gov. Fukui Toshihiko signed bilateral currency swap deals at the Bank of Korea office. The agreement, worth $3 billion, will help stabilize their financial markets and allow for short-term capital lending to each other when they run short of foreign currency.

Although disputes over history issues drew a rather gloomy picture of bilateral relations, business leaders’ efforts to focus the relationship more on future-oriented approaches left hope for better ties between Japan and Korea. Japan’s Matsushita Electric Industrial Co. and South Korea’s LG Electronics reached a basic agreement to settle a five-month-old patent dispute over an alleged infringement of plasma display technology patents. According to The Japan Times on April 5, the two companies will share the technology in a cross-license agreement and set up a committee to discuss greater business cooperation and collaborate in the field of home air conditioners. In other business dealings, on April 11, Joongang Ilbo reported that Japan’s Hokkaido Electric Power Co., which supplies more than 3.8 million customers in Japan’s northernmost island, would buy high-voltage cable from South Korea’s Gaon Cable Co., the nation’s third-largest wire and cable producer. The Sapporo-based company also had an agreement with South Korea’s Taihan Electric Wire Co., ROK’s second largest maker of the equipment.

The interdependence of the Japan-Korea business environment is clearly seen in the drop in the Japanese stock market due to Samsung’s first quarter report of “lackluster performance.” Inside South Korea, there was news about the declining sales of Japanese products. Joongang Ilbo on April 6 reported since the Tokdo/Takeshima islets dispute, Japanese auto sales were struggling, while German automakers have seen sales growth. According to the Korea Automobile Importers and Distributors Association, Toyota in the first quarter was down 17.3 percent, while Honda saw its sales fall 6 percent in March from that of the previous month. Additionally, Chosun Ilbo reported on April 25 that Japan was losing competitiveness in TV pricing in the South Korean market. As local digital TV makers lowered their prices and conducted aggressive marketing campaigns this year, customers were losing interest in made-in-Japan PDP and LCD sets.

Travel that binds and ties

While the bilateral exchanges at the local government level were regaining momentum, efforts for a joint research on historical events continued as a measure to counter recent disputes.

On May 4, The Japan Times reported that school trips from Japan to South Korea and China had been cancelled due to the concerns over safety as bilateral tensions and anti-Japanese sentiments increased. A number of exchange programs had also been cancelled by local governments both in South Korea and Japan because of the soured relations. On June 4, Japan’s Minister of Land, Infrastructure, and Transport Kitagawa Kazuo and South Korea’s Culture and Tourism Minister Chung Dong-chea agreed to encourage personal exchanges in tourism and culture. In their joint statement, they confirmed their commitment to hold this year’s commemorative events as scheduled and mend relations between sister cities in the two countries. The statement also set the target for this year’s visits at 5 million people and called for efforts to boost exchanges between youth.

Tourism has been prosperous in the first quarter of 2005 and it seems likely that it will continue as the Japanese government decided to permanently exempt Koreans from tourist visas. Under the current policy, Koreans need visas only when they stay in Japan beyond 30 days. According to the April 4 issue of Chosun Ilbo, despite the diplomatic tension, the number of Japanese tourists to South Korea has steadily increased; in January, the number of Japanese visitors to Korea overall rose 36 percent from 2004. The Korea National Tourism Organization said that a total of 250,000 Japanese visited Korea in March – up 25 percent compared to a year earlier. But tourism officials also expressed concerns that the trend might be short-lived since the number of people making new reservations was on the decline.

On June 10, South Korea and Japan officially released a full-scale 1,900-page report on their perceptions of historical events, revealing a huge gap between the two countries. The report was a part of a bilateral project that had aimed at promoting mutual understanding and bridging the gap in perceptions of history; it was launched by an agreement between Prime Minister Koizumi and former President Kim Dae-jung.

Japanese experts and North Korean officials agreed to conduct joint research into ancient tombs on the outskirts of Pyongyang. They plan to work together to study the tombs dating back to the Rakrang Kingdom of 108 B.C.

“History Opens the Future,” a tri-nation history textbook of Japan, South Korea, and China produced by scholars, teachers, and members of citizens’ groups concerned about the contentious history textbooks was published May 26. This book marks the first common history text for the three nations. It is written in three languages – Japanese, Korean, and Chinese and deals with the region’s modern history. It is not an official text approved by the authorities, but it is expected to be used as supplementary reading material for students in Japan, China, and South Korea.

The future remains in motion

The coming quarter could be eventful if the Six-Party Talks reconvene. However, those prospects appear dim, and so continuation of the status quo is likely. Japan and South Korea will continue to discuss economic issues, with working-level officials meeting to talk about the FTA, although it is unlikely that any major breakthroughs will occur.