261. Memorandum Prepared in the Department of State0

KOREAN-JAPANESE RELATIONS

(Background paper for use in connection with the meeting of the NSC Standing Group, May 18, 1962)

I. General Considerations

1. Prospects for early normalization of relations between the Republic of Korea and Japan are not bright. From 1952 to 1960, normalization was impossible because of Korean ex-President Rhee’s intransigent anti-Japanese position. A new Korean administration gave hope that a settlement could be achieved, although its expectations were unrealistically high. Japanese conservative leaders in 1961 apparently decided in favor of a settlement. Now, however, the Japanese wish to “go slow” because of domestic political pressures and current balance of payments difficulties. They also believe that time is on their side. Nevertheless, despite lack of progress, neither the Koreans nor the Japanese seem to contemplate a rupture in negotiations, which are continuing at working levels.

2. It continues to be in the United States interest to promote an early settlement of differences between the Republic of Korea and Japan, for the following reasons:

a.
Rapid Korean economic development, crucially necessary for stability, would be materially accelerated by Japanese economic aid additive to continued U.S. aid.
b.
Korea would gain greater access to Japanese markets for her exports, thus providing further major stimulus to Korean economic development.
c.
A significant impediment to Free World unity and strength in Asia would be removed.
d.
ROK prestige would be bolstered in the increasingly serious competition with the Communist North Korean regime.

3. United States leverage to induce a settlement is limited by the following factors: [Page 568]

a.
The Japanese believe the U.S. must support Korea in any event, and see no reason for haste in assuming any portion of the economic burden themselves, especially since they suspect that we are trying to reduce our own burden thereby, and believe that passage of time will make a cheaper settlement possible.
b.
The Japanese Prime Minister is reluctant to proceed with a settlement because (1) he believes that any large contribution to Korea would be unpopular in Japan because of popular prejudice against the Koreans; (2) the Japanese Left is opposed to any settlement with the anti-Communist Republic, and would use the issue against the Government; (3) elements within the ruling conservative party in Japan seek to use the Korean problem as a device for weakening the Prime Minister’s leadership position. These factors carry particular weight with Ikeda prior to the Upper House and Conservative Party elections scheduled for July.
c.
The Koreans also fear we will sell them out to Japan economically in order to lessen our foreign aid burden.
d.
Both sides resent any American role that could be interpreted as interference (almost any overt U.S. role would be so interpreted by Communist propaganda and by the Japanese Left). At the same time, each side is constantly seeking to invoke U.S. influence and money against the other in a complex tangle of issues where a misstep for the U.S. would be very easy and could be quite damaging.
e.
With Japan once again a world power, and in the present state of Japan-U.S. relations, we cannot force Japan to act except in accordance with her own conception of her national interest.
f.
Despite the enormous leverage our aid gives us in Korea, our influence there would be seriously weakened by forcing the Koreans to settle with Japan at levels materially lower than they believe reasonable.
g.
Under these circumstances, United States pressure, if injudiciously applied, might well retard a settlement rather than promote it.

II. Issues between Korea and Japan

4. The principal issues outstanding between Korea and Japan are: (a) Korean claims for compensation, based on Japanese occupation from 1910 to 1945, including North as well as South Korea, (b) Korean claims of exclusive fishing rights within an extensive and legally untenable “Peace Line,” 50 to 200 miles at sea. Other minor issues are: (c) Korean art objects in Japan, (d) status of Korean residents in Japan, (e) repatriation of Koreans to North Korea, (f) sovereignty over Tokto or Takeshima (Liancourt Rocks), an inconsequential islet in the Japan Sea, (g) claims for vessels taken by Japan from Korea in 1945. The occupation claims issue is the principal bone of contention, and if it can be settled, the other issues can also be settled.

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III. U.S. Policy and Objectives

5. United States policy has been, and continues to be, to “influence the ROK and Japan to negotiate a settlement of their differences through a realistic and forthcoming attitude on both sides, and to normalize their relations without, however, placing the United States in the position of mediator.” To this end, the United States has the following immediate objectives:

a.
To keep contact between the Koreans and the Japanese, at least at the technical level, and avoid any rupture of negotiations.
b.
To persuade both sides that it is in their interest to settle now, and that delay will be contrary to their own interests.
c.
To convince both sides that Japanese economic aid (under whatever name) will not supplant, but supplement, continuing high-level U.S. assistance.
d.
To bring about the resumption of negotiations at a high political level as soon as possible, and to induce a reasonable over-all settlement of outstanding issues without public evidence of United States coercion or interference.

IV. Recent U.S. Actions

6. Our Ambassadors in Tokyo and Seoul, in continuing informal contacts with the Japanese and Korean governments at various levels, are urging flexibility, restraint, and a forthcoming attitude on both sides, looking toward a resumption of negotiations at a higher level in July or August after the Japanese elections. The Koreans are being urged to lower their figure for claims against Japan from the $700 million currently asked, and probably will do so if talks are resumed. The Japanese are being urged to raise their offer for compensation and economic assistance grants above the unrealistically low level of $70 million (made to the Koreans in negotiations between the Foreign Ministers last March).

7. Meetings among senior officers in the Department of State (including AID) on April 16 and May 151 have considered means for applying American influence to bring about a settlement between Korea and Japan. The conclusions were reported in the Secretary’s memorandum to the President (attached), responding to National Security Action Memorandum 151 of April 24, 1962.2

8. AID is now studying possible incentives to offer the Japanese and Koreans through the economic assistance program to promote a settlement.

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V. The Current Situation

9. In a conversation with Ambassador Reischauer on April 18, Japanese Foreign Minister Kosaka made clear [1 line of source text not declassified] the lack of progress in the March talks. He added that Korean persistence in unreasonable claims “might create anti-American feeling in Japan because of the U.S. role in confiscating private Japanese property in Korea in violation of international law.”

10. The ROK Foreign Minister, in a talk with Ambassador Berger on April 24, indicated that the Koreans would refrain from public statements on Korea-Japan relations, and intended to keep the door open to visits by Japanese officials and newsmen.

11. A four-man Japanese economic fact-finding mission, headed by Yoshihiro Nakayama, Director of the Foreign Ministry’s Economic Affairs Bureau, visited Korea in late April. Nakayama had a frank discussion with Ambassador Berger in Seoul, which should do much to promote Japanese understanding of the Korean situation and our position.

12. In an appraisal on April 29, working-level Japanese Foreign Office officials reflected less gloom about the danger of a hostile rupture in negotiations. They were seeking ways in which both governments could foster a constructive atmosphere, pending a new impetus toward rapprochement. They stated, however, that the Japanese Government was proceeding on the assumption that Ikeda would not authorize any major negotiating effort before the Japanese elections.

13. On May 16, Japanese Foreign Office officials confidentially informed our Embassy that the Koreans had approved a small rotating Japanese mission in Seoul, to be staffed by a series of “visitors,” beginning with Toshio Urabe, Counselor of the Foreign Ministry’s Asian Affairs Bureau. Urabe may have access to Korean SCNR Chairman Park, in which case the locus of informal discussions may shift to Seoul. Such talks would be the best way to maximize prospects for subsequent high-level negotiations.

14. The Japanese have signed an agreement to import 40 thousand tons of Korean rice this year, in return for which the Koreans will purchase fertilizer.

15. The Koreans have recently seized additional Japanese fishing boats allegedly within the “Rhee Line,” but the seizures have apparently not attracted major attention.

16. On balance, it appears that there is a continuing willingness on both sides to keep communication channels open; that the Koreans are willing to make a claims settlement at somewhat less than their asking figure (Ambassador Berger estimated $350-450 million in compensation and grants (exclusive of credits and loans) in his conversation with Nakayama); and that a settlement is possible if the Japanese leadership [Page 571] can be motivated to make a decision in favor of a settlement at a higher cost than they have so far been prepared to accept.

  1. Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, Standing Group Meetings, 5/18/62-8/3/62. Confidential. Drafted by Macdonald for use at the NSC Standing Group meeting at 3 p.m. on May 18. The Standing Group, an interagency group, was the precursor of the more significant EXCOM (Executive Committee) of the National Security Council, which came into ad hoc existence during the Cuban missile crisis of October 1962 and was later formalized.
  2. The record of the April 16 meeting is attached to a May 14 memorandum from Bacon to Rice, prepared in anticipation of the May 15 meeting. No other record of the May 15 meeting has been found. (Department of State, Central Files, 694.95B/5-1462)
  3. Document 260.