TOKYO — Japan has warned South Korea that it will take “countermeasures” if Seoul moves ahead with selling the seized assets of a Japanese company that has refused to pay compensation for wartime forced labor, diplomatic sources said Thursday.
Options floated within the Japanese government include raising tariffs on South Korean imports and recalling Japan’s ambassador to Seoul, which would worsen bilateral ties already marred by disputes over the wartime labor issue and recent military incidents.
The Japanese government is expected to finalize its countermeasures, with a 30-day deadline approaching on Friday for South Korea to respond to whether it will accept Tokyo’s request to launch bilateral consultations to resolve the issue of the asset seizure.
According to the sources with knowledge of bilateral ties, Tokyo has told Seoul that it would have “no choice but to take countermeasures if Japanese companies suffer actual damage.”
The row stems from a South Korean top court ruling in October that ordered Nippon Steel & Sumitomo Metal Corp. to pay compensation for wartime forced labor during Japan’s 1910-1945 colonization of the Korean Peninsula.
Tokyo maintains the issue of compensation was settled under an agreement attached to the 1965 treaty that normalized ties between Japan and South Korea, and views the ruling as a breach.
The Japanese steelmaker has not followed the compensation order and was notified by a South Korean district court of the seizure of its assets on Jan. 9.
The court, however, has stopped short of ordering the sale of the assets as the South Korean plaintiffs are seeking to reach an out-of-court settlement.
During a series of director general-level meetings between the two countries’ foreign ministries in December and January, Japan said any sale of the seized assets would go against the 1965 agreement and repeatedly warned of countermeasures.
Japan has also said that if South Korea ignores the pact, the bilateral relationship cannot be sustained, according to the sources.
Seoul does not seem to be budging over the dispute, amid a recent run of events that have heightened bilateral tension, including a South Korean navy vessel’s alleged locking of fire-control radar on a Japanese patrol plane in December.
According to a South Korean government source, Seoul has stressed to Tokyo that court judgements must be respected, warning that any countermeasure by Japan would trigger “retaliation.”
If South Korea does not respond to Japan’s request to engage in bilateral consultations, Tokyo is considering calling for the establishment an arbitration panel including members from a third country, in addition to what it calls “countermeasures.”
Lawmakers of Prime Minister Shinzo Abe’s Liberal Democratic Party have intensified calls in recent weeks for government action against South Korea.
The South Korean top court also ordered Mitsubishi Heavy Industries Ltd. in November to pay compensation for wartime forced labor.