President Lee Myung-bak of the Republic of Korea held a summit with Prime Minister Taro Aso of Japan on Jan 12. At the invitation of President Lee Myung-bak, the Japanese Prime Minister made a state visit to Korea from January 11 to 12. The two leaders had an in-depth discussion on a wide range of issues, including direction of Korea-Japan relations; ways to enhance substantive economic cooperation and expand cultural and people-to-people exchanges; and recent developments surrounding the Korean Peninsula such as the North Korean nuclear issue as well as how to work together in the regional and international arena.

President Lee and Prime Minister Aso shared a thought that Korea and Japan should work toward a future-oriented, mature partnership. To this end, they agreed to boost mutually beneficial relations based on a correct understanding of history, promote deep mutual cooperation through expansion of cultural and people-to-people exchanges and forge a collaborative relationship on various international initiatives. To achieve these goals, the two leaders reached an agreement to meet and discuss pending issues and matters of common interest as frequently as necessary.

Notably, they saw eye to eye on the need to work together to help more Japanese businesses advance into the parts and materials industries in Korea in a bid to enhance substantive economic cooperation. They also agreed to step up efforts to bolster exchanges and cooperation between small and medium-sized enterprises (SMEs) of the two countries, including holding a SME CEO Forum. In connection, President Lee pledged that he would provide active support to Japanese companies wanting to invest in the parts and materials industrial complexes designated by the Korean Government, including the one in Gumi.

An investment road show for Japanese businesses to entice investments in those complexes was already held last November. Besides Gumi, which was given a final approval to host a parts and materials industrial complex. those in Pohang, the Busan-Jinhae free trade zone and Iksan were granted conditional approval last December.

In addition, two rounds of the SME policy dialogue were held in Tokyo and Seoul last June and November, respectively, in accordance with an agreement between the leaders of the two countries reached in April, 2008. In those meetings, ways for the SMEs of the two countries to cooperate were discussed.
Regarding the Korea-Japan SME CEO Forum, the first meeting is scheduled for this summer in Tokyo. The Forum is intended to create opportunities for the CEOs to cooperate by establishing a network among themselves and to exchange information on cutting-edge technologies and market trends as well as management know-how.

On top of this, the President valued substantive and cooperative measures discussed between companies of both countries as Key Japanese business leaders accompanied Prime Minister Aso's visit.

Both sides expected that working-level consultations would continue to come up with a mutually beneficial outcome concerning the resumption of negotiations on a Korea-Japan free trade agreement (FTA).

The two leaders also agreed to work together to help overcome the financial crisis and revive the real economy. In particular, they agreed to work closely together in reforming financial systems, promoting macroeconomic policy coordination and helping prevent protectionism in the run-up to the second G-20 summit scheduled in London in April. On top of this, the Japanese Prime Minister pledged to provide unreserved support for the Korea's entry into the Financial Stability Forum (FSF).

President Lee valued the agreement to expand the currency swap lines between the two countries’ financial authorities at the end of last year, noting that it made great contributions to promoting stability in the regional financial markets and strengthening bilateral financial collaboration. 

The two leaders concurred on the need to take proactive measures for raising a joint fund for the Chiang Mai Initiative Multilateralization and expanding it in a bid to strengthen East Asia's capabilities to cope with crisis. They also saw eye to eye on the necessity to set up an independent surveillance organization in the region. In May 2008, the ASEAN+3 countries agreed to raise the Chiang Mai Initiative Multilateralization fund to a total of US$80 billion.

Expressing concern on protectionism witnessed in several countries, the two leaders reached an agreement to join forces to address the problem. They agreed to work together to maximize the effects of measures taken to boost the economy in both nations.

President Lee and Prime Minister Aso welcomed the fact that Japan's Mitsubishi Heavy Industries was awarded a contract to launch South Korea’s multipurpose satellite Arirang 3. Mitsubishi Heavy Industries was finally named as the launcher of the Arirang 3 satellite on December 30, 2008.
Furthermore, the two leaders agreed to initiate negotiations for a nuclear energy agreement between the two countries. In addition, they reached an agreement to further bolster collaboration in science and technology in such areas as space and atomic energy as well as to reinvigorate the functions of the Korea-Japan S&T Cooperation Committee. The Committee was established in 1986 based on the Korea-Japan S&T Cooperation Agreement signed in 1985. The chief delegate of the committee on the Korean side is the Director-General of the International Economic Affairs Bureau of the Ministry of Foreign Affairs and Trade and on the Japanese side the Director-General of the Nonproliferation, Disarmament and Science Department of the Ministry of Foreign Affairs. The committee convened 12 times before it was suspended in 2002. It mainly discussed information exchange in science and technology, implementation of joint research projects and exchanges of science and technology professionals.

In addition, the two leaders also agreed to work closely together to ensure the success of EXPO 2012 Yeosu, Korea. In a bid to provide support, Japan has formed a discussion panel composed of 30 experts from various sectors including, business, academia and the media.

The two heads of government saw eye to eye on the need to continuously expand people-to-people exchanges, which currently stand at 5 million. To this end, the two leaders agreed to render proactive support for the expansion of youth exchange projects through the Working Holiday Visa Program, the Korea-Japan Joint Government Scholarship Program for Students in Science and Engineering Departments and the Korea-Japan college student exchange program.

Beginning this year, a total of 1,500 students will participate in the college student exchange program. Some 300 Korean students and 200 Japanese students will visit each other's countries annually. The host government will provide tuition and minimal living expenses for visiting students enrolling in a short term program raging from 3 to 12 months. Issuance of Working Holiday Visas will be increased according to the April 2008 agreement between the leaders of the two countries. The agreement provides that each party will increase the ceiling in phases until it reaches 10,000 in 2012. For example, the total number of Working Holiday Visas issued in 2008 totaled 3,600, but it will be expanded to 7,200 this year.

For the past 10 years, the Korea-Japan Joint Government Scholarship Program has allowed for Korean students to study natural sciences or engineering in Japanese national universities. Tuition and living expenses required for their four-year study in Japanese institutions have been paid half and half by both governments. The program is based on an agreement reached at the bilateral summit in October 1998. Each year from 1999 through 2008, one thousand Korean students took advantage of the program. The program was renewed at the bilateral summit in Fukuoka in December 2008.

The two leaders also concurred on the need to further expand exchanges of politicians using the Korea-Japan Parliamentarians’ Union as the main channel.

They also agreed to cooperate closely for the success of the Korea-Japan Cultural Festival, which is scheduled in Tokyo in the latter half of the year. The festival aims at invigorating bilateral cultural exchanges. From 2005 to 2008, Japan held the festival in Seoul, but for the first time Korea will sponsor it in Tokyo this year. Included in a number of cultural events are Korean folk culture experience programs, popular entertainment performances as well as various exhibitions.

The two Governments have also decided to launch the Korea-Japan New Era Joint Research Project at an early date. The project will study ways to forge desirable bilateral relations in the years to come. It was agreed at the bilateral summit in April 2008 with a view to make a blue print for future relations between the two neighbors. The project is expected to be launched during the first quarter of the year. Prof. Ha Young-sun of Seoul National University and Prof. Masao Okonogi of Keio University were named as co-chairs.

At the summit, President Lee and Prime Minister Aso shared a thought that they would have to continue to practice patience and strive to help bring about denuclearization of North Korea through the Six-party Talks.

They decided to seek common strategies for helping reconstruct Afghanistan and for other international endeavors.

President Lee thanked the Japanese Prime Minister's invitation to Japan and said he would like to make a return visit at a mutually convenient time during the year.