Although Japan permitted a shipment of some semiconductor materials to South Korea on Wednesday, the situation is far from resolved. Japan’s moves have already caused a spike in the price of memory chips and are having a chilling effect on the global tech market. While Tokyo cites national security concerns as the reason for the sanctions, most experts believe it is retaliating against South Korea for recent court rulings that require Japanese companies to pay restitution to Koreans forced into labor in their factories during World War II.

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For decades, the two countries have disagreed about how Japan should atone for its colonial past. Now, this failure to reckon with past atrocities may have an economic effect that will extend far beyond East Asia. For a more peaceful and prosperous future, countries must contend with history — no matter how ugly.

From the time Japan relinquished its empire at the end of World War II, deep-seated resentments against it lingered in former colonies like Korea. First as an imperial power and then during World War II, Japan committed atrocities that were among the most horrific in recorded history. This included the sexual enslavement of hundreds of thousands of “comfort women” and efforts to eradicate Korean culture by forcing Korean schoolchildren to learn Japanese.

When U.S. forces occupied Japan and South Korea in 1945, reconciliation between Japan and its former victims was not a high priority. Instead, the United States sought to brush aside resentments over the recent past and to reestablish the economic linkages that had existed during the colonial era. Focused on stopping communism, the United States believed Japan and South Korea needed to be united in their resistance to this threat, and so U.S. diplomats pressured the Japanese and South Korean governments to cooperate and quickly settle their historical disputes.

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South Korea finally normalized relations with Japan in 1965 with the support of the Johnson administration. The Republic of Korea (ROK) president at the time, Park Chung-hee, was intent on achieving double-digit economic growth rates and was more willing to compromise with Japan than his predecessors had been. Although the treaty was highly unpopular, Park controlled an autocratic government with a powerful security apparatus and was able to ram it through the assembly.

This treaty successfully created a new economic relationship between Japan and South Korea. Japan agreed to provide Korea with $800 million in grants and loans while the South Korean government relinquished its rights to seek formal reparations from Japan for colonial and wartime abuses against it.

During the next two decades, South Korea not only received the promised development aid from Japan, but it also became a prime destination for Japanese trade and investment. With the South Korean and Japanese economies benefiting greatly from the new partnership, Seoul and Tokyo were loath to quarrel over historical issues.

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But the treaty also allowed Japan to evade a reckoning with its past atrocities. Neither government took the perspectives of the victims into account when negotiating, and so, the agreement nullified the rights of individual citizens to seek compensation from the Japanese government. Instead, the Park government accepted a lump sum from Japan that could be used to pay victims of Japanese war crimes, and the Japanese government considered the issue of compensation for its former victims resolved.

But it wasn’t so easy. As military rule gave way to democracy in South Korea during the late 1980s and early 1990s, victims of Japanese atrocities who had previously been reluctant to speak started to come forward. Among them, the “comfort women,” victims of sexual enslavement by the Japanese military, sparked the most emotional outrage. The treaty proved wholly inadequate to addressing their grievances.

And so, today, the historical injustices of World War II continue to divide the countries. For South Koreans, much of the anger stems from both the struggle to financially compensate victims and Japan’s unwillingness to hear their concerns.

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In 2015, Park Chung-hee’s daughter, former South Korean president Park Geun-hye, concluded an agreement with Japan on the comfort women issue that had almost the same flaws as the treaty negotiated by her father 50 years earlier. Japan agreed to pay $8.9 million as a lump sum to a foundation that assisted former comfort women. Once again, the victims were denied a voice in the negotiations, and the agreement provoked a storm of criticism.

Moon has reversed course, dissolving the foundation supported by the treaty last November and rendering the agreement useless. In its place, he has put forward a new proposal for a joint compensation fund that both South Korean and Japanese companies would contribute to, but Tokyo has flatly rejected this. The latest South Korean court rulings in favor of forced laborers seeking restitution from Japan reflect the same principle as Moon’s proposal: that Japanese firms should be held liable for their actions during World War II.

But it isn’t just about money and awaiting restitution. Opportunistic ROK leaders have found Japan a convenient target to attack when their own popularity is suffering. Keeping historical anger alive can be a useful political weapon in a country where nearly every president’s tenure in power has ended with single-digit approval ratings.

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Japan has also continued to fuel the controversy with insincere efforts to demonstrate contrition. Since the 1990s, Japanese leaders have made several dozen statements apologizing for and expressing remorse for their country’s past misdeeds. However, they have consistently undermined these statements by issuing clarifications or engaging in other actions such as visiting the notorious Yasukuni Shrine that raise questions about their sincerity.

Japanese society has failed to acknowledge and show remorse for what its armies did during World War II. Unlike Germany, Japan has not built public memorials or museums to commemorate and educate people about its World War II atrocities. Its current prime minister, Shinzo Abe, has taken a tougher stance on historical issues than his predecessors and has made it clear that under his administration, further apologies are not forthcoming. Taught in schools that Japan was simply pursuing its interests in the early 20th century, younger Japanese also see little need to apologize for their country’s past actions. All these trends threaten to harden nationalist public memory and exacerbate the current trade dispute.