South Korea’s Supreme Court ruling last week ordering a major Japanese steelmaker to pay damages to South Koreans mobilized to wartime labor under Japan’s colonial rule of the Korean Peninsula was easy to predict. Equally predictable is that a deterioration of relations between Japan and South Korea will follow. That future is not ordained, however. If Seoul recognizes the stakes and South Korean President Moon Jae-in prioritizes the future over the past, the national interest over domestic politics, and the national interest above settling scores, then this moment could be a step toward improved ties. But it isn’t likely.

That court decision was a long time coming. The case was first filed in a Korean court in 2005, after the plaintiffs lost a similar suit in Japan. South Korea’s Supreme Court in 2012 overturned lower court rulings that denied compensation and in a 2013 ruling the Seoul High Court ruled in favor of the plaintiffs. Nippon Steel & Sumitomo Metal Corp. appealed to the Supreme Court the following year and the court took five years to render last week’s decision.

In its ruling, the court dismissed the defense’s two chief claims: that it was not the same company that had wronged the plaintiffs during World War II (it was reorganized after the war) and that a bilateral agreement that accompanied the 1965 treaty normalizing relations between Japan and South Korea settled all compensation claims deriving from Japan’s colonial rule of Korea. Instead, it reasoned that during negotiations for the 1965 agreement, “the Japanese government failed to acknowledge the illegality of its colonial rule and rejected in principle legal compensation for victims of forced labor.” As a result, the court concluded that the victims’ rights to individual compensation remained valid and could be enforced.

The Japanese government was outraged by the ruling. Prime Minister Shinzo Abe said it was “impossible in light of international law,” while Foreign Minister Taro Kono charged that it “one-sidedly and fundamentally damaged the legal foundation of Japan-South Korea relations.” Nippon Steel & Sumitomo Metal said the decision was “deeply regrettable,” adding that it will “carefully review” the ruling.

Other companies are doing so as well: Estimates of the number of Japanese companies that could be hit with lawsuits ranges from dozens to hundreds. The Japanese government has hosted meetings with them to explain the situation. A South Korean media report estimates that there are more than 220,000 Korean victims of wartime forced labor, with roughly 150,000 of them believed eligible for compensation for the wartime labor (even though an overwhelming number of victims have already died — it is thought that only 5,000 are still alive).

The South Korean government has responded to the ruling with restraint. The Office of the President made no statement, while a Foreign Ministry spokesperson urged the two governments to “gather wisdom” to stop the decision from negatively affecting their relations.

While international legal scholars can assess the validity of the claims and the court’s logic, one critical point hangs over this issue: South Korean President Park Chung-hee, who concluded the 1965 treaty, sought to control funds that his country would receive from Japan under the terms of normalization. To that end, he dismissed individual claims against Japan so that he could direct any funds to national development projects that he prioritized. In other words, political calculations of national interest have always been part of the historical reckoning between Japan and South Korea.

That history provides grounds for hope and the possibility that this ruling may not drive the Japan-South Korea relationship off the rails. But a positive outcome will require leadership and courage, and the readiness to reject easy political points by nationalist pandering.

Two parties are central to the way this plays out. The first is Moon. If this ruling is not to torpedo relations, he must declare that the forced labor issue is a matter of South Korean national interest and national security, and then refuse to enforce the ruling. If he wants the victims to receive compensation, then he should emulate his friend and mentor, the late President Roh Moo-hyun, and establish a mechanism to pay from South Korean government funds; South Korea passed special legislation in 2007 to do just that. Most significantly, he must make an affirmative declaration of the importance of Japan-South Korea relations, a determination to focus on the future and not the past, and show his willingness to pay a political price for doing so — demonstrating to the South Korean people (and his partners in Japan) that this relationship is worth the cost.

The second key party is Nippon Steel & Sumitomo Metal. It should declare its readiness to take moral — not legal — responsibility for the wartime use of the Korean labor and offer payment to the victims. This gesture would show an understanding and appreciation of the wrongs that were committed and a desire to try to make them right. Such a move is not unprecedented. A decade ago, Mitsubishi Materials settled with Chinese plaintiffs who claimed that the company had used them for forced labor during World War II, offering an apology and a payment of 100,000 yuan ($15,000) to each surviving victim and the families of those who died. Two other Japanese companies, construction firms Kajima and Nishimatsu, also offered relief for victims of their wartime practices. And this despite the fact that China also gave up claims to war reparations from Japan in the 1972 joint statement that normalized bilateral relations.

The South Korean government is the most important actor as these events unfold. It could minimize the negative impact of this ruling; skillfully handled, Moon could use it to put a floor on the Japan-South Korea relationship and restore positive momentum to relations; the trajectory has been downward in recent months.

Unfortunately, events do not give much cause for hope. October marked the 20th anniversary of a summit between Prime Minister Keizo Obuchi and South Korean President Kim Dae-jung, during which the two men tried to change the trajectory of their countries’ bilateral relationship. Their joint declaration was an astonishing declaration that had the potential to transform Northeast Asia’s regional dynamics. For a brief moment, that promise was realized. It is revealing that the 20th anniversary passed virtually without recognition.

Brad Glosserman is deputy director of and visiting professor at the Center for Rule-Making Strategies, Tama University, and senior adviser for Pacific Forum. He is also co-author (with Scott Snyder) of “The Japan-South Korea Identity Clash: East Asian Security and the United States.

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