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Although the summit and subsequent joint press conference were conducted in a friendly atmosphere from start to finish, full-scale negotiations on an economic partnership agreement were nowhere in sight. Concerns over historical issues and a territorial dispute were also brushed aside.
"I want to develop a new era in Japan-South Korea relations by upgrading ties to a more mature partnership," said Fukuda at the joint news conference after the summit.
Lee arrived in Japan on Sunday, the first visit by a South Korean president since Roh Moo-hyun visited in December 2004. This was also the first step toward resumption of a former "shuttle diplomacy" program involving two summits a year, which was suspended under the Roh administration.
Both sides are eager to put the past behind. Lee has said he will not seek further apologies or expressions of remorse from Japan over its 40-year rule over Korea.
"We of course cannot forget the past history but should not make it an obstacle for our future," Lee said. "We need not react irritably every time to Japanese lawmakers' remarks. Any politician in any country can express their personal ideas."
Many Japanese appreciated Lee's attitude. "No South Korean president has made such an in-depth remark except Lee. If he can put his words into practice during his term of office, the problem of historical perception would not come to the fore again," said Hajime Izumi, professor of international relations and Korean studies at the University of Shizuoka.
"From Japan's side, it was a commendable remark. But if he cannot live up to his belief, it will be difficult for Japan and South Korea to establish future-oriented pragmatic relations in the true sense of the term," Izumi said.
Lee's predecessor, Roh Moo-hyun, also emphasized future-oriented relations at the beginning of his presidency and expectations were high that he would build closer ties with Japan. However, in March 2005, lawmakers in Shimane, the Japanese prefecture closest to a disputed island chain known as Dokdo in South Korea and Takeshima in Japan, passed an ordinance creating a "Takeshima Day." The move unleashed a storm of protest in South Korea and Roh's administration took a tough line against Japan.
Former President Kim Dae-jung, who regarded himself as pro-Japan, also said at the beginning of his term in office that he would not take up issues of past history. But when the issue of history textbooks arose and escalated to a diplomatic row in 2001, Kim called on Japan to revise its descriptions of its wartime atrocities in Asia.
Based on these past experiences, some Japanese media and experts remain unconvinced that Lee will be any different. Some say Lee might turn to a tough line on Japan if he fails to achieve the desired effects with his economic policies. Masao Okonogi, a professor at Keio University in Tokyo, denies this viewpoint, however.
"The idea of taking a tough line against Japan to keep the present administration in power comes from past South Korean presidents' actions, but it will not be applicable to Lee," said Okonogi, who is an expert on Korean affairs. "It highly depends on the Japanese prime minister's behavior," he said.
The two leaders' positions over the Japan-South Korea EPA negotiations, suspended since November 2004, were marked by a difference. The two nations agreed to meet in June to discuss ways to restart the negotiations, but it still remains uncertain when full-scale negotiations will start.
"We can say that Lee has improved relations with Japan, which had worsened under the Roh administration, but we need something new to upgrade relations, as Fukuda mentioned in the press conference," Izumi pointed out.
"A free trade agreement or an EPA could be symbols of something new, but the summit talks showed the difference in temperature over the issue," he said. While Japan wants to speed up negotiations to conclude an EPA, South Korea places priority on economic cooperation on its industrial parts industry.
"If we continue the FTA talks without addressing the areas of disparity, we are concerned that the gap may become even more significant," Lee said.
South Korea's trade deficit with Japan is about US$30 billion. The country builds products with parts imported from Japan because its small and medium-sized enterprises are still weak. So South Korea is concerned that the more products it exports, the more its trade deficit with Japan will balloon.
At first, Lee wanted to redress this trade imbalance through foreign investment from Japan, but South Korea sees that Japan's easing of regulations on foreign investment may not go far enough.
"I think we should consider starting FTA negotiations for the benefit of both countries, but we need to succeed in cooperation on the parts industry to eliminate the trade deficit. That would be the first step toward conclusion of an FTA," Lee said.
In 2003, the Japan-South Korea EPA negotiations started based on an agreement at summit talks between the two countries the same year. Initially, both called the agreement centering on the abolition of tariffs an FTA, but later Japan start using the term EPA. An EPA is a comprehensive pact that not only features an FTA to cut tariffs but also covers trade in services and investments.
The negotiations have been suspended since November 2004, as Seoul did not accept Japan's offer of concessions on tariffs on farm and marine products. South Korea also hesitated to accept a potentially massive influx of Japanese cars and other manufactured goods that could damage its domestic industries.
"The negotiations on an EPA would be more political. Once both countries resume this, they have to conclude it. So, they need a commitment to conclude it if they resume it," Okonogi pointed out. "It will not be easy," he predicted.
