April 26, 2024

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Kim Byong-joon (left), acting chief of the Korean Federation of Industries, and Masakazu Tokura, chairman of the Japan Business Federation, commonly known as Keidanren, announce joint declaration to set up future partnership fund at Keidanren's office in Tokyo on Thursday. (Korean Federation of Industries)

The two biggest business groups from South Korea and Japan will establish two future partnership funds as the two countries’ economic sectors try to mend ties and strengthen cooperation, according to officials Thursday.

Kim Byong-joon, acting chief of the Korean Federation of Industries, and Masakazu Tokura, chairman of the Japan Business Federation, commonly known as Keidanren, announced the joint declaration at Keidanren's office in Tokyo.

The announcement was made on the occasion of the summit between President Yoon Suk Yeol and Prime Minister Fumio Kishida.

According to the declaration, the FKI will create a Korea-Japan future partnership fund, while Keidanren will set up a similar Japan-Korea future partnership fund. The FKI and Keidanren will contribute 1 billion won ($762,000) each to set up the two foundations for their respective funds.

“With this fund, we will research for the future vision that the two countries should move toward, carry out projects to solve common problems the two countries face, promote the exchange of personnel who will be in charge of the future and expand and strengthen the economic relationship between the two countries,” the groups said.

As the joint declaration has just been announced, the groups said neither Korean nor Japanese firms have committed to donating to the funds yet. They plan to encourage companies to contribute to the bilateral funds.

Regarding potential contributions from Mitsubishi Heavy Industries and Nippon Steel, the Japanese companies that were ordered by the Korean Supreme Court in a 2018 ruling to compensate the victims of forced labor during World War II, Tokura did not rule out the possibility.

The business leaders pointed out that there are numerous problems that Korea and Japan need to work together to overcome, including maintaining and enhancing the free and open international order, coping with movements to weaponized resources and energy, green and digital transformation, low fertility and aging population and realization of sustainable development goals.

“Korea and Japan are essential partners that have achieved great advancements by cooperating and increasing exchanges over a wide range of areas since the normalization of national ties in 1965. As the security environment in Northeast Asia becomes graver, the need for Korea and Japan to work closely for the region’s peace and prosperity is increasing,” the groups said.

The two groups will discuss which projects they want to carry out at their regular yearly meeting.

According to the groups, business officials saw Seoul’s recent announcement of the plan to solve the forced labor issue during the Japanese wartime as an opportunity to bolster the economic ties between the two countries.

The Korean government announced earlier this month the plan to set up a public foundation to compensate victims of Japan's forced labor with donations from domestic firms.

The declaration came as Korean business tycoons are visiting Japan for a roundtable with Japanese business moguls. The FKI and Keidanren organized the Korea-Japan business roundtable for Friday.

According to the FKI, Samsung Electronics Executive Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won, Hyundai Motor Group Executive Chair Chung Euisun, LG Group Chairman Koo Kwang-mo and Lotte Group Chairman Shin Dong-bin will be among 12 South Korean attendees at the meeting.

From the Japanese side, 11 figures including Keidanren Chairman Masakazu Tokura will be present at the roundtable.

“At a time when the atmosphere of recovery has matured for the troubling Korea-Japan relationship and the need for cooperation between the two countries’ economic sectors has grown since the announcement of the resolution for the forced labor issue on (March) 6th, it's meaningful that key businesspeople of Korea and Japan gather to discuss economic cooperation and joint countermeasures for global issues,” said the FKI in the statement.

“With this meeting, we will strengthen the economic cooperation with Japan and put efforts into expanding bilateral investments and personnel exchanges,” the group added.

The Japanese side also expressed a positive outlook for economic ties between the neighboring countries as Tokura told reporters last week that Keidanren would positively consider what the business world can do to contribute to the future.

By Kan Hyeong-woo (hwkan@heraldcorp.com)