(Bloomberg) -- South Korea’s president sees a deal to end a feud with Japan opening the way to better business ties between the neighbors that could bolster global supply chains of semiconductors and steady their economic relations with China.

“If Korea and Japan – both global trade powerhouses and manufacturing industry leaders – work together on technology, I expect that it will create an enormous synergy,” Yoon Suk Yeol said in joint written interview with Bloomberg, the Associated Press, Agence France-Presse, Reuters and Kyodo News that was released Wednesday.

Yoon is set to start a two-day trip to Tokyo from Thursday where he will push to implement what could be a landmark deal on compensation for Koreans forced to work at mines and factories during Japan’s 1910-1945 colonial occupation of the Korean Peninsula. Friction over compensation had disrupted ties ranging from trade to security.

President Joe Biden’s administration welcomed the deal. The US has been seeking help from major chipmakers to secure supply chains that are less reliant on China as well as impose sweeping curbs on the sale of advanced semiconductor equipment to prevent the world’s second-largest economy’s progress in a range of cutting-edge technologies that could threaten America’s status as the world’s preeminent power. 

“Stronger economic cooperation between Korea and Japan will likely contribute greatly to boosting global supply chains,” Yoon said.

Under Yoon’s plan for the colonial-era workers, South Korean companies, rather than Japanese ones, would finance a foundation to pay Koreans conscripted into labor. Japan has indicated it could roll back export controls that came into effect a few years ago as the feud flared, which could help secure supplies of crucial materials for South Korea’s chipmakers.

Firms tapped to pay would include beneficiaries from funds transferred under a 1965 treaty intended to resolve forced labor issues and wartime disputes between Japan and South Korea, such as Posco Holdings Inc. Japan has said South Korean court rulings on the workers unjustly awarded compensation and the issue was “settled completely and finally” under the agreement that normalized relations nearly 60 years ago.

“Both Korea and Japan also have close economic ties with China respectively,” Yoon said. “I believe that strengthening Korea-Japan cooperation will help our two countries advance economic relations with China in a stable manner.”

He said there was an increasing need for cooperation with Tokyo due to threats posed by the likes of North Korea, which have the potential to rattle security and global markets.

North Korea regards Japan, South Korea and the US as its mortal enemies, and leader Kim Jong Un has been bolstering his state’s ability to deliver a nuclear strike that could hit the neighbors and deliver a warhead to the American mainland.

Yoon said the current North Korean nuclear situation is different from the past, and threatens peace and security on the Korean Peninsula and beyond. He said cooperation among his country, Japan and the US was more important than ever, and Seoul will continue to press Kim to abandon his atomic ambitions. Yoon also said the US was not a part of the deal to remedy the forced labor issue.

“Since the complete denuclearization of North Korea is the clear and unchanging goal of the international community, the Republic of Korea will never acknowledge North Korea as a nuclear state under any circumstances,” Yoon said, referring to his country by its formal name.

His neighbor to the north is experiencing food shortages that have grown worse in some regions and led to deaths, Yoon said, adding Seoul is ready to provide humanitarian aid.

See: Why South Korea-Japan Ties Are Plagued by History: QuickTake

Resolving the feud on labor has become more urgent for the US and its allies as they attempt to present a more united front against China and North Korea in the wake of Russia’s full-scale invasion of Ukraine. Yoon and Japanese Prime Minister Fumio Kishida have sought to show their support for greater cooperation on security issues, with both leaders attending North Atlantic Treaty Organization meetings last year and publicizing joint military drills. 

Next month, the South Korean leader will visit Biden at the White House, where talks are expected to focus on sweeping US export controls unveiled in October that prevent chipmakers from sending advanced equipment to facilities in China.

Without a license extension, it is unclear how South Korean giants Samsung Electronics Co. and SK Hynix Inc. would proceed in the world’s No. 2 economy. Both firms depend on China as a key market and a manufacturing site for their memory chips.

“I look forward to trust-based relations formed through technological cooperation between Korea and Japan contributing to stabilizing the international economic order,” Yoon said. 

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