Photo/Illutration South Korean Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho shakes hands with Japanese Finance Minister Shunichi Suzuki during their meeting in Incheon, South Korea, May 2, 2023. (REUTERS)

INCHEON, South Korea--Japan and South Korea held their first bilateral finance leaders’ meeting in seven years on Tuesday, a sign relations between the two are thawing amid shared challenges from geopolitical tensions and slowing economic growth.

The resumption of bilateral financial talks comes ahead of Japanese Prime Minister Fumio Kishida’s planned visit to South Korea next week for talks with President Yoon Suk Yeol.

“Japan and South Korea are important neighbors that must cooperate to address various challenges surrounding the global and economy, as well as the regional and international community,” Japanese Finance Minister Shunichi Suzuki said at the meeting with his South Korean counterpart Choo Kyung-ho.

“As for geo-political challenges, we’re experiencing incidents like North Korea’s nuclear missile development and Russia’s invasion of Ukraine. Japan sees these as unacceptable, and something the two countries must address together,” he said.

Choo said the two countries can strengthen private and government partnerships in high-technology industries such as semiconductors and batteries.

“We need to strengthen cooperation between financial authorities on the recent emergence of geopolitical risks and supply chain instability,” Choo told Suzuki in opening remarks.

In the meeting held on the sidelines of the Asian Development Bank (ADB) gathering this week, Choo also urged Japan to swiftly restore South Korea back to a “white list” of countries with fast-track trade status.

Regular annual dialogue between the two countries’ finance ministers has been suspended since 2016 due to disputes over wartime history.

But ties between the U.S. allies have improved in recent months in the face of North Korea’s frequent missile launches and China’s more muscular role on the global stage.

In a landmark summit in Tokyo last month, Kishida and Yoon agreed to put aside their difficult shared history and pledged to work together to counter regional security challenges.

Suzuki said he hoped Japan and South Korea can continue with bilateral financial dialogue and that doing so would contribute to improving relations between the two countries.

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