National / Politics

Finance Minister Taro Aso ponders tariffs in spat with South Korea over wartime labor

Bloomberg

Finance Minister Taro Aso said tariffs were among the measures Japan could take against South Korea if a dispute over wartime labor worsens between the major trading partners.

In response to a lawmaker’s questions in the Diet, Aso said that matters had not reached that stage yet, but halting remittances or stopping visa issuance could also be considered if more damage were to be caused. His comments came after the Sankei newspaper reported Sunday that South Korean lawyers were considering an attempt to seize the assets of Japanese companies in Europe.

Fractious ties between the two countries have turned hostile over a series of lawsuits regarding wartime labor filed against Japanese companies whose roots can be traced back to the 1910-1945 period when Japan controlled the Korean Peninsula. Japan says all claims relating to the colonial period were settled under an economic cooperation pact attached to a 1965 treaty that normalized ties, which was accompanied by a payment of $300 million, and that South Korea should be responsible for any compensation.

“There are various possible retaliatory measures, but I think negotiations are going on and we have not reached that point,” Aso said. “If things progress and there is more damage, we will be at a different stage.”

South Korean President Moon Jae-in has said the 1965 pact between the two countries doesn’t prevent Koreans from suing Japanese firms and the decisions of the courts should be respected.

The Supreme Court in Seoul ruled in November that Mitsubishi Heavy Industries Ltd. must pay between 100 million won and 150 million won ($88,500 to $133,000) to each of five plaintiffs who were forced to work in a military factory, a month after finding Nippon Steel & Sumitomo Metal Corp. liable in a similar case. There are more than a dozen other lawsuits in the pipeline, affecting about 70 Japanese companies, according to the Japanese Foreign Ministry.

Jiji Press reported on the weekend that tariffs on about 100 South Korean products, cutting the supply of some Japanese goods to South Korea, and tightening the issuance of visas were among the measures Tokyo was considering if Seoul sells assets of Japanese companies that have been seized during the dispute.