Hands Across the Sea

To South Korea's chagrin, the Communist government of North Korea has signed a "private" trade agreement with Japan that will boost trade between the two nations from less than $60 million a year to as much as $500 million by 1976. The pact envisions easy Japanese bank credits to North Korea and the exchange of trade missions.

Under badgering from South Korean diplomats, the Japanese Foreign Office said that it was accepting the agreement "reluctantly" and termed the exchange of trade missions "premature." Privately, Japanese businessmen concede that they are trying to get the best of both worlds: improved relations with North Korea in a way that would not greatly damage their commercial and political links with Seoul.

The South Koreans remain furious, claiming that the pact "impairs fundamentally" the 1965 treaty in which Japan recognized Seoul as the only legitimate Korean government. "The thing to watch now," said a Western diplomat, "is how long it will take the South Koreans to make their counter-move and start talking to the Chinese."

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