The Korea-Japan summit yesterday set the stage for a new future-oriented partnership by promising joint action on the global economic crisis and broadening areas of future cooperation.
But the leaders shunned addressing resurgent historical and territorial disputes which have dampened good-will between the two in the past.
The summit largely focused on economic cooperation to tackle the global slowdown, which would significantly hurt export-driven economies.
They also agreed to try to resume talks on a bilateral free trade agreement and boost industrial cooperation and investment.
Both President Lee Myung-bak and Prime Minister Taro Aso hailed the summit as opening the possibility of a new chapter in ties.
"It is unprecedented that leaders from Japan and Korea see each other so often and agree to cooperate in broad areas like this," Aso told a joint news conference after their fifth summit.
They have met every month since October at regional and international meetings of leaders.
"There have been difficult times due to various reasons, but when we look back we see there was never a time when we moved backward, though there were times when we wavered," Lee said.
Their one-hour summit focused on practical issues in the economy, science, human exchanges and tourism, while shelving difficult issues like North Korea`s nuclear programs, territorial disputes over Dokdo and Japan`s colonial past.
The business-like meeting and practical nature of the agenda also reflected the leaders` pragmatic style, officials said.
Seoul officials attached significance to the agreement to increase industrial cooperation, which they expect to help address the growing trade imbalance between the two countries.
Lee has agreed to actively support Japanese investment in the parts and materials sector, largely blamed for Korea`s perennial trade deficit, which is estimated to have reached $30 billion in 2008.
"The government has already designated several industrial complexes for the parts and materials industries and it will continue to support advances by Japanese firms into those complexes," Lee said.
They also agreed to boost financial cooperation bilaterally and internationally.
Seoul and Tokyo last month raised the ceiling of their foreign currency swap lines to $30 billion from $13 billion.
"We agreed that the expansion of the foreign currency swap lines between Korea and Japan late last year greatly contributed to the stabilization of financial markets in the region, as well as the strengthening of financial cooperation between the two countries," Lee said.
"In particular, we agreed to work together closely in reforming the financial system, coordinating macroeconomic policies and coping with trade protectionism at the G-20 financial summit in London in April," Lee said.
The two leaders also agreed to promote a working-level discussion for a free trade agreement.
Seoul and Tokyo held several discussions for an FTA. But talks were suspended in 2004 largely due to differences over tariffs on agricultural goods.
"The leaders expressed hope the negotiations will produce an outcome that is mutually beneficial to both countries," Cheong Wa Dae said in a released statement.
The summit revived the "shuttle diplomacy" between heads of state, which has frequently been postponed or canceled due to tension over Japan`s history textbooks and its claim to the Dokdo islets.
Korean experts are concerned that those issues would strain ties again as it did last year.
Japan renewed its territorial claim on Dokdo in its educational guidebook and defense whitepaper last summer. The move strained the agreement in April between Lee and then-Prime Minister Yasuo Fukuda to put aside historical controversies and push for future-oriented ties.
Apparently mindful of last year`s diplomatic setback, Cheong Wa Dae said "Korea and Japan need to establish a mutually beneficial relationship based on an accurate understanding of history, a relationship in which the two sides can have a deep understanding of each other by expanding cultural and personnel exchanges."
Tension has mounted recently after a Japanese news report that Tokyo plans to survey and develop maritime resources around Dokdo. The Japanese government denied it.
Korea also lodged a protest last month after a Japanese newspaper reported that the Japanese Foreign Ministry has published a 14-page booklet detailing its claim to the islets in seven more languages.
By Hwang Jang-jin