Japan has once again found itself entangled in a recurring skirmish with South Korea over wartime labor a seemingly intractable row with no end in sight.

On Tuesday, a South Korean district court completed the process of serving the Japanese side with documents ordering the seizure of Nippon Steel Corp. assets, including around 81,000 shares it had acquired through its joint venture with the Korean firm Posco.

The action pushes the liquidation of the assets closer to reality, following through on a 2018 decision by South Koreas Supreme Court ordering the Japanese firm to provide about 40 million in compensation to four Koreans who said they were forced to work against their will for the steel-makers predecessor during Japans colonial rule of the Korean Peninsula.

Although the two neighbors have squabbled over history for years, compensating for wartime labor by liquidating Japanese assets, at least for Tokyo, is more than merely an instance of Seoul rehashing the past. In the Japanese governments view, South Korea is attempting to sabotage a 1965 economic pact that not only settled the wartime labor issue but also constitutes the cornerstone of the two countries 55-year postwar relationship.

On the other hand, Seoul, and in particular President Moon Jae-in, driven by a sense of justice and a desire to gain public approval, has placed the will of the victims and their families above the landmark bilateral agreement that normalized ties.

South Korean President Moon Jae-in, driven by a sense of justice and a desire to gain public approval, has placed the will of victims of wartime labor and their families above a landmark bilateral agreement that normalized ties. | BLOOMBERG

With growing mutual distrust between the two countries and their leaders constrained by publics that have grown increasingly skeptical of each other, there is little prospect of ending the deadlock any time soon. A feud of this type could further erode mutual trust, jeopardizing future economic and national security cooperation.

The issue of wartime labor hasnt been able to be solved in a bilateral discussion or through politics or diplomacy so as the legal framework of Japanese-South Korean relations is challenged, the relationship is put on trial, said Yuki Asaba, a professor of Korean studies at Doshisha University in Kyoto. Right now, history is being put on a trial. In other words, historical issues are points of contention in (an actual) court.

Even 75 years since Japan surrendered, ending World War II, Tokyos 1910-1945 colonial rule of the Korean Peninsula and its deeds during that period remain sore subjects and a key source of anti-Japan sentiment among many Koreans to this day.

Japan systematically brought in heavy numbers of male workers from the Korean Peninsula between 1939 and 1945 to relieve labor shortages during the Sino-Japanese War and World War II.

After the conflicts ended and Korea was liberated, Seoul demanded compensation for its laborers, alleging they had been forced to work in Japan under harsh conditions. Through 14 years of negotiations, Japan and the newly formed South Korea agreed to settle all post-colonial compensation issues by concluding an economic cooperation fund that was used to turn around the frail Korean economy and pay wartime compensation to individual laborers.

Nearly six decades later, however, the South Korean Supreme Court determined in 2018 that four wartime laborers were entitled to receive compensation, concluding the pact did not deny the individual right of laborers to ask for consolation money for their suffering under Japans colonial rule.

Until this ruling, all South Korean leaders had agreed that the wartime labor issue had been legally settled as explicitly stated in the pact.

However, Moon, who leads the left-leaning Democratic Party and is a former human rights lawyer, refused to intervene after the ruling.

Instead, he insisted on a victim-centered approach to the individual claims in the lawsuits, with his administration taking the view that the court decisions should reflect the desires of the victims and their families, something his government argued is an internationally recognized legal principle.

The Moon administration took over after a disaster by Parks government and emphasized justice and morals, Junya Nishino, a political science professor who studies Japan-South Korea relations at Keio University, said in reference to the conservative former President Park Geun-Hye, who was impeached in 2017 over political scandals.

Many of those who serve in the Moon administration have a strong opinion that the start (of bilateral relations) in 1965 was a mistake and there should be a redo, Nishino said.

South Koreans chant slogans during an anti-Japan rally near the Japanese Embassy in Seoul in August last year. The banners read Condemn Abe regime. Make an official apology to victims of wartime forced labor. | REUTERS

In the years since the first democratically government came to power in 1988, South Korea has been undergoing a self-examination of its past and uncovering political oppression and human rights abuses by authoritarian leaders, including around the time when the pact with Japan was established in 1965.

Hypersensitive to public sentiment, Moon has opted to side with the ex-laborers to gain public approval and cement his political base. In a major shift away from the conservatives, who long held power after the war, Nishino said liberals now have more control across a broader swath of mainstream Korean society.

Still, Moons emphasis on justice and morals is facing growing scrutiny amid a litany of scandals.

Former Seoul Mayor Park Won-soon, a longtime advocate of womens rights who was widely believed to be a potential successor to Moon, committed suicide last month after being accused of sexual harassment by his secretary. And on Friday, six of Moons aides, including his chief of staff, offered to resign following revelations that senior officials were found to own more than one home even as the administration attempts to halt surging home prices.

Fearful of further antagonizing the public, Moon is expected to maintain his tough stance on wartime labor, Nishino said.

The mutual skepticism is reaching a critical level.

In a joint opinion poll by the Yomiuri Shimbun and Chosun Ilbo newspapers in early June, 84 percent of respondents in Japan and 91 percent in South Korea described relations with the other as bad. The ratio of Koreans who view Japan negatively also marked a record high.

The South Korean Supreme Courts 2018 ruling and subsequent stalemate have prompted ties between the countries to unravel further, including in trade and security.

In July last year, the Japanese trade ministry tightened rules on chemical exports to South Korea and subsequently ended its exemption on a plethora of trade regulations. Although Japanese officials adamantly denied having a political motive, the South Korean government viewed the move as retaliation for the 2018 ruling.

Just over a month later, South Korea struck back, this time on the national security front, unilaterally declaring it would not renew the General Security of Military Information Agreement (GSOMIA), a bilateral pact governing exchanges of sensitive information primarily on missile threats from North Korea. Seoul reversed the decision at the eleventh hour after intense pressure from the United States, but has said the door still remains open to scrapping the deal at any time.

Nippon Steel Corp. on Friday filed an appeal against the seizure of its assets in South Korea that were earmarked for liquidation to compensate wartime laborers, in a move sure to put the two nations on a diplomatic collision course yet again. | REUTERS

Following Tuesdays ruling in the compensation case, Nippon Steel filed an appeal. Now, the South Korean court must decide whether to accept it, a process that could take months, buying the company time, Yonhap news agency reported, citing unidentified legal sources. But even if the appeal is rejected there, the company could take it to a higher court.

Due to the complexity of the process, the actual liquidation of the assets is expected to be months away.

In the meantime, observers say there remains little incentive for Moon or Prime Minister Shinzo Abe to back down.

Its impossible to compromise unless both leaders take a different stance than theyve taken and shown to their citizens which would be a tremendous blow to them, said Asaba. They are in a situation where they know theyll collide head-on if nothing is done, but no one can take the wheel and avoid the looming damage.

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'History on trial': Why Japan's wartime labor dispute is more than another tit-for-tat with South Korea - The Japan Times