View on Malokurilskoye, Shikotan, Kurils, Russia
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Annual trade has now reached $30 billion, tripling in size since 2004. The first phase of the massively expensive ESPO pipeline, connecting oil reserves in Siberia with Russia’s Pacific coast, has been completed and the construction of phase two has been announced. This is rare good news for two economies that have been hit particularly hard by the global financial crisis.

But it’s still not all smiles between the two countries. The violent reaction of Vladivostok‘s workers to the imposition of a tariff on Japanese vehicles in late December displays the importance of Japanese commerce to Russia’s remote Far East provinces. More seriously,a Japanese ship carrying ¥12.8 million worth of medical aid at the request of Russian residents on the disputed Kuril Islands was turned away in January because the Japanese delegation refused to show disembarkation cards, a move that the Japanese consider tantamount to recognizing Russian sovereignty over the Kurils. T

The Japanese claim that the Kuril islands -currently under Russian control – are historically Japanese and were seized illegally by the Soviet Union at the end of World War II. The dispute over the islands has prevented Russia and Japan from signing a peace treaty and officially ending the war.

Until the Kuril issue is resolved, Japan and Russia will continue to be in the contradictory position of building ever closer ties while still officially fighting World War II.

Medvedev and Aso meet to discuss energy, economic cooperation – By Gregory Shtraks | FP Passport.

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