South Korean, Japanese Leaders Pledge Closer Economic Ties

By Heejin Koo

Jan. 12 (Bloomberg) -- Japan’s Prime Minister Taro Aso and South Korean President Lee Myung Bak pledged to work together to help overcome the global financial crisis.

“Cooperation between our two countries is all the more important at a time of global economic crisis,” Lee told Aso at the start of a summit meeting in Seoul today. “I hope we can closely cooperate with each other separately as well as within an international forum, so that we can contribute to the recovery of the global economy.”

Japan and South Korea are seeking closer economic ties to spur growth. Japan’s economy shrank 2.85 percent in the three months ended Dec. 31, contracting for a third straight quarter, according to a Bloomberg survey of economists. The Bank of Korea cut its benchmark interest rate by a half point to a record low on Jan. 9, saying the economy is deteriorating faster than expected.

The two countries will speed up efforts to review whether to resume negotiations for a free-trade agreement, or an “economic partnership agreement,” as it is called in Japan, the two leaders said in a joint briefing after their meeting. The two nations will also take steps to attract Japanese manufacturers of machinery parts to set up in South Korea, they said.

Aso, who is on a two-day visit to Seoul, will return to Tokyo later today.

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net