South Korea's President Moon Jae-in (L) is welcomed by Japan's Prime Minister Shinzo Abe to the G-20 Summit in June 2019.

South Korean President Moon Jae-in said on Thursday that Japan should look back upon its imperialist past but Seoul will "gladly join hands" if Tokyo chooses dialogue, in a carefully choreographed message amid an escalating history and trade row.

In his Liberation Day address marking Korea's independence from Japan's 1910-45 colonial rule, Moon refrained from deriding Japan but laid out ambitious goals for inter-Korean relations, including an unprecedented call for unification by 2045.

Moon warned the global free trade order may suffer if a country "weaponizes" a sector where it has an upper edge, referring to curbs Japan has imposed on exports of some high-tech materials to South Korea.

Seoul calls the move as retaliation over a feud about wartime forced labor, while Tokyo cited unspecified security reasons.

The dispute, triggered after a South Korean court ordered Japanese firms last year to compensate some of their former laborers, has brought their ties to their lowest ebb in more than half a century.

Japan sees the issue was settled by a 1965 treaty normalizing bilateral ties.

But Moon said the two neighbors can overcome the past and move toward the future if Japan "contemplates a past that brought misfortune to its neighboring countries".

"Better late than never: if Japan chooses the path of dialogue and cooperation, we will gladly join hands," Moon said.