The decision by the Seoul District Court this week to side with yet another Korean forced to labour for a Japanese corporation during the colonial era will not have gone unnoticed in Tokyo. And experts warn that the two neighbours remain on collision course. It may have been only a single plaintiff, and the compensation a trifling 10 million won (US$8,610), but South Korea ’s Supreme Court is due in the coming months to liquidate the seized assets of Japanese firms that have refused to abide by previous judgments to compensate former forced labourers. When that happens, analysts warn, the two nations’ already rocky relationship may take another sharp turn for the worse. The Seoul court ordered Mitsubishi Heavy to provide redress to a man identified only by his surname, Kim, for being forcibly transported to Japan and put to work on Gunkanjima, a man-made island off Nagasaki Prefecture, for three years during the early 1940s. South Korean lawyers push to sell Mitsubishi assets in forced labour case The court refused to accept similar claims by another 251 individuals on the grounds they had been unable to prove that they had been forced to perform labour. Kim is now one of several hundred Koreans who have won court cases in recent years against a number of Japanese corporations, most of whom have been awarded 90 million won (US$77,610) in compensation. Additional cases are still pending. The Japanese government will also have been incensed by the court’s dismissal of Mitsubishi Heavy’s position that South Korea had no jurisdiction over the case, which took place on Japanese territory, and that the suit should have been heard in a Japanese court. With the South Korean government repeatedly stating it cannot interfere in the judicial process and refusing to accept Japan’s insistence that the entire question of compensation was settled under the 1965 treaty that saw the two nations normalise bilateral relations, analysts say Tokyo will not sit idly by if its companies’ assets are handed out to plaintiffs. That could come as early as March. China eager to break Japan-South Korea stalemate “The basic stance of [Prime Minister] Shinzo Abe’s administration has been quite clear and unmoving all along,” said Yoichi Shimada, a professor of international relations at Fukui Prefectural University. “The government has said Japanese companies should not pay and he has called on [South Korean President] Moon Jae-in to resolve a problem that is of his own making,” Shimada said. “Japanese firms have not actually suffered any damage from the courts’ decisions, but I am sure the Japanese government has plans on how it will respond if those assets are liquidated,” he said. “I have no doubt Abe will go ahead and do just that.” In July last year, Japan imposed restrictions on exports of three chemicals critical to South Korea’s semiconductor industry, and removed Seoul from its “white list” of preferred trading nations. Tokyo’s justification for the move was that it had proof the technology was being passed on to North Korea, in violation of international resolutions, and that the South had failed to both stop leaks of restricted technology and communicate with Japan on the matter. Many, however, saw Tokyo’s move simply as retaliation for the court rulings and, to avoid accusations that it is using trade as a blunt weapon, Japan may be reluctant to use the same tactics, Shimada said. Other options available to Abe might include revoking visa-free travel for South Korean travellers, although that would inevitably have implications for Japan’s domestic travel industry, or imposing tough restrictions or tax increases on South Korean companies doing business in Japan. Tokyo would almost certainly retaliate [to the liquidation of Japanese corporate assets] in ways more damaging … than last year’s bureaucratic trade measures. Leif-Eric Easley, Ewha Woman’s University It has even been suggested that Japan might retaliate by using legal fine print to seize the assets of South Korean firms in Japan and to use the proceeds to compensate companies that have lost assets in the South. Tokyo might also declare South Korean diplomats at its embassy and consulates persona non grata or find another way to increase the pressure on Seoul’s diplomatic corps in Japan. Any such move by Abe would almost certainly be welcomed – or, at least, unopposed – in Japan, where there is a feeling that South Korea will always use the issue of forced labourers, “comfort women” and the colonial era as a stick with which to beat Japan. Many Japanese believe that Moon is also quite happy for the row with Japan to rumble on so as to divert attention away from his economic problems at home. The court rulings, however, put Moon in a more difficult position. He cannot be seen to give in to Japanese pressure to intervene in the judiciary’s decisions or appear weak in the face of Tokyo’s retaliatory measures. On the other hand, restrictions on imports from Japan have undoubtedly hurt domestic industry and further actions would be calculated to cause maximum pain to Seoul. Leif-Eric Easley, a professor of international studies at Ewha Woman’s University in Seoul, says Seoul is walking a tightrope. “The liquidation of Japanese corporate assets would be a very negative development for Korea-Japan relations,” he said. “Tokyo would almost certainly retaliate in ways more damaging to the South Korean economy than last year’s bureaucratic trade measures. “South Korean leaders are aware of this, which is probably why the liquidation has not yet occurred, and why a hard deadline for liquidation has not been announced,” Easley said. “But given the pressure generated by the judicial rulings and more cases pending, Seoul needs to show progress on the issue.” Japanese tourists flock to Taiwan over Hong Kong, South Korea In recent meetings, senior representatives of both nations have agreed on the importance of moving forward in the bilateral relationship, but that has not translated to progress on finding a solution to the historical issues that continue to plague them. “The Moon administration faces a balancing act in upholding the 1965 framework for diplomatic relations with Japan while respecting the separation of powers and the role of civil society in Korean democracy,” Easley said. “The government may look to combine the efforts of the National Assembly to draft legislation for a compensation fund and the call by wartime labour representatives to form a Korea-Japan consultative body to recommend a victims-centred resolution.” Such a breakthrough does not appear imminent. This week, a group comprised of Korean and Japanese lawyers and civic groups representing victims of wartime forced labour called on the two governments to set up a consultative body on reaching a definitive solution acceptable to all sides. Japan’s response was blunt, with Chief Cabinet Secretary Yoshihide Suga saying on Wednesday in a press conference in Tokyo that the government has “absolutely no interest” in the proposal.