(Bloomberg) -- Japanese Prime Minister Shinzo Abe is set to meet South Korean premier Lee Nak-yon on Thursday for the highest-level talks between the two neighbors since historical disputes flared anew last year.
While expectations for the meeting planned for 11 a.m. in Tokyo are low, just having the discussions sends a signal that the two U.S. allies see room for improvement. Both sides are managing a series of shared concerns, including the global economic slowdown and military threats from North Korea.
“There won’t be immediate changes from a 10-something-minute meeting with Lee and Abe,” said Kim Tai-ki, an economics professor at Dankook University near Seoul. “But there is a clear political message: South Korea wants to talk.”
The meeting is the most positive signal since South Korean courts issued a series of rulings last year backing the claims of people forced to work for Japanese companies during the country’s 1910-45 occupation of the Korean Peninsula. Abe last met South Korean President Moon Jae-in in September 2018 and passed up a chance to meet him for formal talks during Group of 20 events in Osaka in June.
Tensions have rapidly escalated, with Japan striking South Korea from a list of trusted export destinations and imposing restrictions on the sale of specialized materials essential to the country’s semiconductor- and display-manufacturing industries. South Korea responded by announcing its withdrawal from an intelligence-sharing pact, as its citizens boycotted Japanese goods and travel.
After largely sitting on the sidelines as tensions re-emerged, the Trump administration has recently pushed the two sides to try to work out their differences. The U.S. has been particularly critical of South Korea’s exit from the intelligence pact, since it’s relying on cooperation between its two closest Asian allies to help counter China and North Korea.
The pretext for Lee’s visit was his attendance at Emperor Naruhito’s enthronement ceremony Tuesday. “I do not expect everything to be solved during my visit to Japan, but I do have ambitions of finding a clue in solving something,” he told a group of ethnic Koreans in Japan, according to a report published Wednesday by the Seoul Economic Daily.
Japan argues that all Korean compensation claims were settled by a 1965 treaty that established ties between the two countries. Moon has said the U.S.-brokered agreement didn’t take into account the emotional suffering of the victims of Japan’s occupation.
Each country is the other’s third-largest trading partner and neither can afford a damaging economic fight as global growth cools. South Korean exports are poised for an 11th monthly decline and semiconductor sales, which account for the largest share of exports, fell 29% in the first 20 days of October, according to the Korea Customs Service.
The number of South Koreans visiting Japan dropped by about 58% in September from the year earlier period, data showed. If unresolved, the trend could undercut Abe’s tourism drive ahead of the Tokyo Olympics next year.
“The current dismal situation does not benefit either country,” said Kak Soo Shin, South Korea’s ambassador to Japan from 2011 to 2013.