▲ Acting Federation of Korean Industries (FKI) chief Kim Byong-joon (L) and Keidanren chief Masakazu Tokura hold a joint press conference in Tokyo on the launch of the steering committee for the "future partnership fund" South Korea and Japan have agreed to create as part of a solution to the row over Japan's wartime forced labor, in this photo provided by the FKI on May 10, 2023. (PHOTO NOT FOR SALE) (Yonhap)

(LEAD) S Korea-Japan-partnership fund

(LEAD) Biz lobbies of S. Korea, Japan form joint committee for 'partnership fund' under forced labor resolution

(ATTN: UPDATES with comments from presser in paras 8-10; CHANGES photo)

By Kim Seung-yeon

TOKYO/SEOUL, May 10 (Yonhap) -- A South Korean and a Japanese business association said Wednesday they will launch a joint steering committee for the "partnership fund" created to promote private exchanges amid warming relations between the two neighbors.

The Federation of Korean Industries (FKI) and the Japan Business Federation (Keidanren) made the announcement in Tokyo on the launch of the committee for the "future partnership fund," a project agreed on by the two countries as part of the Seoul-proposed resolution to compensating Korean victims of Japan's wartime forced labor.

In March, South Korea offered to compensate the victims without the contributions from accused Japanese companies, a decision hailed by Tokyo that led to the first summit between President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida.

Bilateral relations -- which had remained badly frayed over issues rooted in Japan's 1910-1945 colonial rule of Korea --have taken a fresh turn for a thaw since South Korea's proposal, with Kishida visiting Seoul earlier this week, marking the resumption of "shuttle diplomacy," or regular visits to each other's country by their leaders.

The steering committee will be co-chaired by acting FKI chief Kim Byong-joon and Keidanren chair Masakazu Tokura, and will serve to facilitate various youth exchanges, such as ones between universities, and internships.

Wednesday's announcement, however, stopped short of saying whether any of the accused Japanese companies -- Mitsubishi Heavy Industries Ltd. and Nippon Steel Corp. -- will make contributions to the fund.

Both companies are Keidanren members.

"We don't think that Mitsubishi Heavy Industries and Nippon Steel must be included or excluded," Tokura was quoted by the FKI as saying during the joint conference.

"We will be asking for it indiscriminately and evenly and it's up to the individual company to decide whether it will participate in the project," Tokura said.

Tokura added that there are companies that have expressed intent to take part, but declined to give names.

The dispute over compensating Korean victims has remained one of the major thorns in bilateral relations. Many Koreans were forced to work in Japanese factories under harsh conditions during the Japanese colonial rule.

As part of the resolution to the row over forced labor, Seoul and Tokyo agreed to form the partnership fund and assigned the FKI and Keidanren to lead the efforts.

The partnership fund will also work as a platform to boost industrial cooperation in semiconductor supply chains, energy security, and the green and digital transition, among others, the FKI said.

The FKI and Keidanren plan to host an industry cooperation forum in Seoul in July as part of efforts to advance the partnership fund project.

The FKI and Keidanren said earlier they plan to each donate about 100 million yen (US$740,000), or about 1 billion won in the Korean currency, to start the fund.

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