UPDATE 3-In bid to repair ties, Japan and S.Korea agree to summit next month

Japan and South Korea agreed on Saturday to hold formal talks next month, taking a step towards improving relations strained by decades of bitterness over their wartime past and now exacerbated by a simmering trade dispute. The decision to return to the table came a day after Seoul made a last-minute decision to stick to an intelligence-sharing deal with Japan. Seoul on Saturday hailed its own movement as a "breakthrough" after months of worsening relations.

Yet neither side gave any sign of a fundamental shift instance, meaning that their feud will likely remain as intractable as it has been for the half-century since the two U.S. allies normalized ties. The feud is rooted in a decades-old disagreement over compensation for South Korean laborers forced to work at Japanese firms during World War Two. It deepened this year after Japan curbed exports of materials used to make the semiconductors critical to the South Korean industry.

"We bought time for intense discussions, but there's not much time left for us," South Korea's foreign minister, Kang Kyung-wha, told reporters. She was speaking after meeting her Japanese counterpart, Toshimitsu Motegi, at a gathering of the Group of 20 (G20) foreign ministers in the central Japanese city of Nagoya.

Motegi had earlier said that he wanted to discuss the issue frankly. "I aim to hold a candid exchange of views on the matter of laborers from the Korean peninsula, which is the core problem, and other bilateral issues," Motegi told reporters in Nagoya.

'BIG GAP' Tokyo has been frustrated by what it calls a lack of action by Seoul after a top South Korean court ordered Japanese company Nippon Steel to compensate former forced laborers. Japan says the issue of forced labor was fully settled in 1965 when the two countries restored diplomatic ties.

South Korea's Kang acknowledged that "the gap was very big" between the two countries over the issue of forced labor. In her meeting with Motegi, Kang also repeatedly stressed the need for Japan to withdraw the export curbs. South Korea's chip industry is heavily reliant on specialized chemicals produced by Japan and now impacted by tighter trade restrictions.

South Korea made a last-minute decision on Friday to stick with its General Security of Military Information Agreement (GSOMIA) intelligence-sharing pact with Japan. The agreement was set to expire at midnight on Friday and South Korea had earlier indicated it would let it lapse. The decision was welcomed by Washington, which had pressured its two allies to set aside their feud and maintain the pact, seen as the linchpin of trilateral security cooperation.

It was not immediately clear how much of a role Washington played in bringing the sides together. When asked if Washington had helped push South Korea toward its last-minute reversal on the intelligence-sharing pact, a senior official at South Korea's foreign ministry told Reuters that it was a result of the three countries' close discussions, without elaborating further.

At a bilateral meeting with U.S. Deputy Secretary of State John Sullivan on Saturday, South Korea's Kang asked Washington to play a "constructive role" in resolving issues with Japan, according to the South Korean foreign ministry.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)