TOKYO - South Korean President Moon Jae-in offered the olive branch of dialogue with Japan on Saturday (Aug 15) amid rapidly chilling relations but an imminent breakthrough seems unlikely given that neither is willing to budge on positions they hold steadfast.
The spat has reached new heights with South Korea's Supreme Court ordering the seizure of assets in the country owned by Nippon Steel after the firm refused to pay damages to victims of forced labour.
The company appealed the seizure last week.
Mr Moon told a ceremony on Saturday to mark National Liberation Day, 75 years since Japan's surrender in World War II: "My administration respects the judiciary's decision, and we have been engaging in consultations with Japan on how to reach a satisfactory resolution to which the victims could agree.
"The door ... remains wide open. My administration is ready to sit down with Japan at any time to discuss these issues."
But Japan's position is that South Korea's court ruling violates a 1965 treaty to normalise ties.
Under the agreement, which resolved "completely and finally" the issue of wartime compensation, Japan gave South Korea US$500 million (US$4 billion or S$xx in today's terms) in grants and low-interest loans.
South Korea said the pact does not preclude the right of individuals to seek private damages, and Mr Moon reiterated on Saturday that the ruling "has the highest legal authority and enforcement power".
The Sunday Times understands that neither is willing to take their differences to an arbitration panel, as doing so would amount to an admission that the other party has a case.
The two neighbours are also quarrelling over trade. Japan dealt a blow to South Korea last year when it slapped export restrictions on materials that are key to its semiconductor industry.
Tokyo asserts that it has unanswered security concerns, accusing Seoul of lax controls over materials that have potential for misuse to build weapons of mass destruction.
It said this is completely unrelated to the unfurling historical spat. But Seoul is unconvinced and sees it as a tit-for-tat move, which it wants to bring before the World Trade Organisation.
While Japanese Prime Minister Shinzo Abe was mum on diplomatic issues on Saturday, Mr Moon praised South Korea's resilience in "surmounting the crisis prompted by Japan's export restrictions", noting the growing independence in the production of materials that will in turn wean its reliance off Japan.