Korea-Japan and the End of the '65 System - Part II: The '65 System

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After An Jung-geun shot Ito Hirobumi in 1909, An demanded he be treated as a prisoner of war, a soldier who carried out an asymmetrical warfare campaign against an enemy general. Imperial Japan ignored the request; An would be tried and executed like a common criminal of Japan.

This would be the consistent theme for the next 100-plus years between Korea and Japan. Korea would insist that it is an independent state, and Japan would refuse to recognize such a claim. The '65 System, which re-established bilateral relationship between Japan and South Korea, never sought to address this gap. In the end, the gap never closed, and led to the '65 System's undoing.

Japan's Prime Minister Yoshida Shigeru signs the Treaty of San Francisco, c. Sept. 1951 (source)

Much of the post-war drama between Japan and South Korea could have been avoided if the United States had resorted to a simple solution: include South Korea as one of the Allied Powers in the 1951 Treaty of San Francisco, which formalized Imperial Japan’s defeat. The Asian countries included in the Treaty of San Francisco all normalized relations with Japan in short order. Japan normalized relations with Burma in 1954, the Philippines in 1956, and Indonesia in 1958, paying war reparations for each round of normalization.

It was the character of Japan’s colonization of Korea that complicated the matters. Japan’s normalization with Korea was going to be a much more daunting task than normalizing relations with the Southeast Asian countries. Imperial Japan invaded the Southeast Asian countries, but it never colonized them. Japan’s occupation of Southeast Asia began in the early 1940s as World War II was unfolding, and lasted only a few years until the end of the war. When the war was over, the Southeast Asian countries—including Burma, Cambodia, Laos, the Philippines, Indonesia, Vietnam—were considered a part of the victorious Allied Powers, participating in the Treaty of San Francisco as signatories. Normalizing ties with these countries only involved actually implementing Article 14 of the San Francisco Treaty: “Japan should pay reparations to the Allied Powers for the damage and suffering caused by it during the war.”

Indeed, the US initially had planned to include South Korea as an Allied Power. But less than two months before the treaty was signed, the US suddenly reversed position—precisely because Korea was a Japanese colony. The US Secretary of State John Foster Dulles was concerned that Koreans would upend his carefully planned conference by taking a strong position against Japanese imperialism. Also, Japan insisted that inclusion of Korea as an Allied Power would mean that nearly a million Koreans living in Japan would received status as citizens of an Allied Power, receiving the benefit of the treaty.

(More after the jump.)

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Throughout the colonial period and beyond, ethnic Koreans in Japan faced regular pogroms by the Japanese society. (The most egregious was the massacre following the Kanto earthquake in 1923, in which Japan's police and military, jointing the vigilante mob, began an ethnic cleansing that killed more than 6,600 ethnic Koreans who were falsely accused to poisoning the well and raping Japanese women in the aftermath of the earthquake.) If Korea were considered an Allied power, the ethnic Koreans would receive a protected status, beyond the application of Japanese laws and under the protection of the Allied forces. Japan’s prime minister Yoshida Shigeru argued to Dulles that most of the ethnic Koreans in Japan were communists friendly to North Korea, unworthy of the treaty’s protection extended to Allied civilians. Dulles bought the argument, saying he could see the wisdom of “Korean nationals in Japan, mostly communists . . . not obtain[ing] the property benefits of the treaty.”

The South Korean government raged at the decision. The Provisional Government and the Independence Army had fought on the side of the Allied powers. The South Korean government also noted ethnic Koreans in Japan were facing lawless violence, as they had no nationality that Japan recognized. None of it mattered. To this day, hundreds of thousands of ethnic Koreans in Japan live without a state, face various formal and informal discrimination as literal second class citizens. And South Korea would have to negotiate its peace outside of the ambit of the Treaty of San Francisco.

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How would South Korea's inclusion to the the Treaty of San Francisco have made things simpler? Take the Philippines, which was a US colony in 1941. There was little dispute Imperial Japan invaded the Philippines on December 8, 1941, ten hours after it bombed Pearl Harbor and declared war against the United States. The Philippines, as the US colony, fought on the side of the Allied Power, and eventually won. As an Allied power within the ambit of the San Francisco Treaty, Philippines received $550 million in war reparations and normalized relationship with Japan in 1956: five years after the Treaty of San Francisco, and nine years earlier than South Korea's normalization with Japan.

Did Imperial Japan similarly invade Korea in the early 20th century, as it invaded the Philippines in 1941? To Koreans, the answer was an obvious yes: Imperial Japan put their king at gunpoint and made him sign the Annexation Treaty. Koreans resisted the colonization with all of their might, forming a government-in-exile and a military that battled the Japanese Empire. But not so with the Japanese. In their view, Imperial Japan’s colonization project in the early 20th century was an entirely legitimate one, something that every major world power was doing in their own corners of the world. Sure, they regretted losing World War II, which caused the Japanese to suffer. But Japan didn’t lose the war to Korea—it lost the war with Korea.

This issue became the sticking point as soon as South Korea and Japan began discussing the normalization of relations in 1951, after the Treaty of San Francisco was concluded. Initially, Syngman Rhee’s administration had demanded a reparation from Japan in the amount of over US $2 billion, which included reparations for unpaid monetary claims such as unpaid bonds and debts, forcibly appropriated food and materials, and pain and suffering caused upon Koreans. In response, Japan claimed it still held claims over Japan’s property left behind in Korea, in the form of the infrastructure in Korea that Imperial Japan built, and the property that 600,000 Japanese who once lived in Korea left behind. (The office of the Supreme Commander for the Allied Powers, which occupied Japan immediately after the end of the war, estimated Japan’s claim over Korea could be as much as $6 billion.) This would not have been an issue if Treaty of San Francisco applied to South Korea: in article 14 of the treaty, the Allied powers re-possessed all Japanese assets left behind in their countries.

In a negotiation session in 1953, Hong Jin-gi, chief negotiator for Korea, requested Japan to withdraw the claim for its property, noting that Korea by then had withdrawn from making claims based on human rights violations such as massacre and slave labor and instead limited itself to claims already reduced to a monetary sum. Kubota Kanichiro, Japan’s chief negotiator retorted: “Then Japan, too, has a right for a claim: for 36 years, Japan conferred a great deal of benefit to Koreans by planting trees in Korea’s mountains, building railroads and constructing hydroelectric dams.” When the appalled Hong noted Korea could have done those things as an independent nation, Kubota went further: “Without Japan, Korea would have been a Chinese or Russian colony—and would have been in a much worse situation.” When Kubota made clear he had no intention to withdraw his comments—which came to be known as “Kubota’s Delusional Remarks” [구보타 망언] in Korea—the Korean delegation walked out.

It would take four years for the negotiations to resume. Even then, little progress was made. South Korea insisted Japan illegally invaded Korea in the early 20th century, Korea fought back for more than three decades, and won its independence. Japan claimed it legitimately colonized and annexed Korea, Imperial Japan conferred a great deal of benefit to Koreans, and lost its colony only after the war ended. These two positions were mutually exclusive.

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The stalled negotiation met a turning point when Syngman Rhee was overthrown in 1960, and a former officer of the Imperial Japanese Army took his position.

Rhee was a former Korean independence activist who was contemptuous of the Japanese. (In his book, Rhee called the Japanese “a small folk, small in body and brain, circumscribed in their small island world for centuries.”) The April 19 Revolution, protesting Rhee’s increasing attempt to rig elections and make himself the lifetime president, ended Rhee’s reign. But newfound democracy in Korea barely lasted a year: on May 16, 1961, General Park Chung-hee mobilized his Manchukuo alumni in the military and rolled tanks into Seoul. After forcing the president Yun Bo-seon to resign at gunpoint and dissolving the government, Park appointed himself to be the vice chairman of the Supreme Council of National Restoration and the de facto ruler of the Republic. He would rule from 1961 to his death in 1979.

The former officer of the Imperial Japanese Army had much less qualms about normalizing relations with Japan. The United States was pushing for it at any rate. (John F. Kennedy’s aide on Korea wrote in a report for the National Security Council: “There can be no question of waiting for or seeking some Korean readiness to act. We must galvanize the action.”) Park Chung-hee also needed to develop Korea’s economy in order to justify his dictatorship, and for that, he needed money. Japan had the money: by mid-1960s, Japan’s economy was well on its way toward becoming world class once again, thanks in no small part to the wartime economic boom occasioned by the Korean War. (Yoshida Shigeru, Japan’s prime minister at the time of the Korean War, called it “God’s gift to Japan.”) In 1960s, Japan and South Korea were as far apart in wealth and power as they were in 1875. Tokyo had hosted the Olympics in 1964; most in Seoul didn’t have indoor plumbing.

Kim Jong-pil (left) and Ohira Masayoshi, c. 1962. Kim and Ohira were the chief negotiators for the '65 Treaties.
(source)

Under Park’s reign, the negotiation with Japan resumed in 1962. But even as a dictator, Park did not have a completely free rein. (Unlike, say, 1979, when Park was casually discussing with his aides about how it would be ok to kill between a million and two million pro-democracy protesters, since Pol Pot in Cambodia got away with killing three million.) When the Park regime announced in 1964 that it would begin normalization negotiations with Japan, a nationwide protest broke out and was quelled only after the Park regime declared martial law. Park Chung-hee may not have been as hostile to Japan as Syngman Rhee had been, but to save his own neck, he could not lightly disregard Koreans’ pain and humiliation from the colonial times. The same question of how to characterize Japan’s colonization of Korea that derailed the negotiations during the Syngman Rhee times continued to dog the negotiations.

The Park regime attempted to get around this issue by avoiding it entirely, and going straight into negotiating the amount of money to be paid. The result of this compromise is the language in Article II of the Treaty on Basic Relations between the Republic of Korea and Japan, which states: “It is confirmed that all treaties or agreements concluded between the Empire of Japan and the Empire of Korea on or before August 22, 1910 are already null and void.” (emphasis added). By merely saying “confirmed,” the two countries avoided specifying whether Imperial Japan invaded Korea, or Korea voluntarily agreed to join the Japanese Empire.

But focusing just on the money was still a difficult issue, because Korea and Japan could not agree on how to characterize the money. Because Japan continued its position that its annexation of Korea was entirely legal, it resisted calling the money “reparation” or “compensation”—because, in Japan’s view, no compensation was due to a lawful part of the Japanese Empire. To Japan, paying reparations to Korea was as absurd as paying reparations to the Nagano Prefecture. In the initial meeting between the two countries, Japan’s Foreign Minister Ohira Masayoshi offered $300 million to be called either “congratulatory gift for independence” or “economic assistance.” That characterization was not acceptable for Park Chung-hee. If Korea accepted Japan’s funds called “congratulatory gift” and waived the claim held against Japan, it would mean in substance that Park exchanged Korea’s claim over Japan with Japan’s claim over Korea—the precise bargain that Syngman Rhee’s administration found so insulting that the negotiations stopped for four years.

The breakthrough came when, once again, the parties decided to avoid the issue. Japan would raise the dollar amount, in exchange for refusing to state what the money is for. This was memorialized in a 1962 memorandum that came to be called the Kim-Ohira Memo: Japan will pay to Korea a total of $500 million, of which $300 million was a grant and $200 million was a loan. The two countries revisited the issue as late as 1965, and the situation was the same: Japan refused to characterize the money as reparations, or payment to settle Korea’s claims. The minutes for the meeting on May 14, 1965, a little more than a month before the final agreement, show this exchange:

Japan: “What we are providing is not a reparation. We consider it to be more of an economic assistance.”

Korea: “It is odd to call it only an economic assistance.”

Japan: “Korea seems to think it is in consideration of the claims, but we do not think that way. This needs to be addressed accordingly.”

Korea: “The agreement will refer to both claims and economic assistance. It cannot be only for economic assistance.”

Japan: “In the Kim-Ohira agreement in late 1962, Korea’s position was that it was for both claims and economic assistance, but Japan’s position was consistently that it was an economic assistance.”

Korea: “In other words, do you mean Japan’s position is it is purely an economic assistance?”

Japan: “Correct. It is Japan’s position that the fund is furnished only as an economic assistance.”

As a result, the final language of the Agreement Between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation contains no description of what the money was for. Unlike the Treaty of San Francisco, the word “reparation” never appears in the Settlement agreement, nor does any similar word like “compensation.” There are not even words like “in consideration of” or “in exchange for” to indicate the purpose of the money payment. Indeed, shortly after the Settlement Agreement was signed, Japan’s Foreign Minister Shiina Etsusaburo reported to Japan’s legislature on November 19, 1965 that the money paid was to “congratulate the beginning of a new nation,” and not reparation.

Finally, there was the issue of claims: what kind of claims were the two countries settling? Here, the story was basically the same: the two countries could not agree which claims were being settled, and what such a “settlement” would actually mean. This was an acute concern for Korea. As referenced earlier, Imperial Japan and its subjects left behind as much as $6 billion worth of infrastructure and property. To recognize Japan’s claim over such property is not just a matter of money; it was an odious insult, as if a thief was suing a homeowner for the value of the crowbar that the thief dropped in the house while fleeing.

But the issue was just as important for Japan. As early as 1956, Japanese citizens were suing their own government for damages caused by the Allied forces, because they could not assert claims directly against the Allied forces. Their legal theory was that, because the Japanese government signed away their claims in the Treaty of San Francisco, the government is now answerable to their claims. To defend against these lawsuits, it was imperative for the Japanese government to say that—no, the individuals’ claims were not signed away. Internal documents from Japan’s Foreign Ministry during the negotiations make Japan’s position clear: settlement of the claims has nothing to do with whether an individual can directly assert his claim. Instead, the settlement only means Japan would not offer diplomatic protection to the individual asserting such claims. In other words, the Japanese government would not assist the individual asserting a claim against Korea, but the individual is free to pursue his own claim independently.

In the end, the parties again resolved this issue by simply drafting the language around it. Article II of the Settlement Agreement say the two countries “confirm that the problems concerning property, rights, and interests . . . have been settled completely and finally.” (emphasis added). By using the word “settled”, rather than more precise words like “extinguished” or “waived,” Japan and Korea could continue holding onto their own versions of what such a “settlement” actually did.

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On June 22, 1965, Republic of Korea and Japan entered into 29 treaties and agreements, including the Basic Relations Treaty and the Settlement Agreement. Put together, the treaties were silent in odd places. Korea and Japan agreed to resume a diplomatic relationship, but said nothing about the previous relationship was. Japan was paying Korea money, but said nothing about what the money was for. Korea and Japan agreed to settle their claims against each other, but it was unclear exactly what kinds of claims were alive or dead. But superseding these ambiguities was a crude form of agreement: in exchange for normalized relationship and money, both Japan and Korea will go back to their people and tell two different stories—and the two governments will not challenge each other’s version. The negotiation documents for the two treaties were sealed, and did not become public until 2005.

Signing ceremony for the '65 treaties in Tokyo, c. June 1965 (source)

Today, Tokyo loves pointing out that the total of $500 million is a sizable sum, considering Korea’s GDP was around $3 billion in 1965. Another favorite talking point is the money was used to build crucial infrastructure such as Seoul’s first metro system and the POSCO steel mills. Less discussed is the fact that $500 million in grants and loans for 36 years of occupation compares unfavorably to the $550 million in reparations that Japan paid to the Philippines, for only four years of occupation that resulted in the similar number of deaths as Korea’s.

Also undiscussed are the strings attached to the loans to Korea, contained in undisclosed side agreements: for whatever capital project Korea embarked with the funds, Korea had to use the Japanese companies’ products and services. (This is the reason why Seoul Metro’s Line 1 travels on the left-hand side, while all other lines travel on the right-hand side.) Much of the money that Japan loaned to Korea went straight back to Japan’s corporations, many of which were built on the back of Korea’s wartime slave labor during World War II. With a captive customer, Japan’s corporations liberally overcharged Korea. Mitsubishi overcharged for its train cars in the Seoul metro project so much—nearly double of what it charged Tokyo—that it triggered a legislative investigation back in Japan’s Diet. And of course, Park Chung-hee and his cronies amply pocketed much of the funds.

Left in the cold were the Korean victims of Japanese Imperialism. It took nearly a decade of protests for the Park dictatorship to even pay out some of the money for reparations. In the end, the dictatorship used less than 5 percent of the $600 million obtained from Japan to pay out the Korean people. Each dead received approximately $300, a pittance even by the standards of Korea 1974. ($300 is worth approximately $3,000 in today’s dollars.) There was no compensation for survivors until 2007, when the liberal Roh Moo-hyun administration recognized the inadequacy of the 1974 compensation and passed a special act to make additional reparations of approximately $600 million to the surviving wartime slaves and their family.

Thus began the ’65 System, a patch-up job that never addressed the core cause of the Korea-Japan strife to let it fester. Why bother addressing the core cause, when the benefit was clear and the cost was transferable? The United States got its stability in the northeast Asia to settle the eastern front of the Cold War. Japan, the retreated colonial master, could continue to exert influence over its former lebensraum by making South Korea its indentured servant, dependent on its economy. South Korea, led by the former house slaves, received handsome payments to run the country out of the master's mansion. The only people who bore the cost were those actually hurt by Japan's imperialism, the former field slaves. Korea's dictatorship used their injury as leverage to extract money from Japan, then muzzled them after throwing some nominal amount of compensation.

This system would govern the relationship between Japan and Korea for the next five decades.

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