Koreas Agree to Set Up Joint Office in Gaeseong
2003-11-10
PYONGYANG - South and North Korea agreed early Saturday to set up a joint office in the North's border city of Gaeseong in the first half of next year in an effort to expand inter-Korean direct trade.
The two sides also agreed to build infrastructure for an industrial park in the North Korean city early next year by putting in place regulations on the park and to set up an organization to oversee them.
In a seven-point joint statement issued to sum up four days of economic talks in Pyongyang, the two sides agreed to develop a model industrial park early next year on 33,000 square meters of land in the North Korean region located just north of the truce village of Panmunjeom.
South Korea's Hyundai Group is to build the park which will allow nearly 1,000 small South Korean firms to relocate their garment, footwear and other labor-intensive plants. Ground was broken for the park in June.
Making labor-intensive goods in the North is an attractive proposition for South Korean firms because of cheap labor costs.
According to one study, labor costs are 10 percent of those in the South.
The volume of direct inter-Korean trade accounts for less than 10 percent of annual cross-border shipments, standing at US$642 million in 2002 and $505 million in the first nine months of this year.
South and North Korean officials agreed to hold mutual visits to the construction sites of inter-Korean railways and roads early next month and to carry out working-level talks for the cross-border projects.
In previous talks in August, the two sides agreed to reconnect the severed railways and roads across the heavily fortified border by the year's end.
Deadlines for inter-Korean projects were missed because of political tension and other problems.
The re-linking of the railways and roads, which had been severed just before the start of the 1950-53 Korean War, is one of the most prominent symbols of reconciliation set in motion by the landmark inter-Korean summit in 2000.
They also agreed to hold working-level economic talks in either.
Pyongyang or Gaeseong as early as end of this month to work out details on the safe passage of South Korean businesspersons and others who will stay across the heavily fortified border.
The four-day talks were called to review the progress of major economic projects between the two sides.
Inter-Korean economic talks stalled Friday over a last-minute North Korean demand for electricity assistance from South Korea.
The North pressed South Korea to agree to set up a joint committee charged with helping ease the impoverished country's energy shortages, but economic officials of the two Koreas in the end decided not to include the issue in the joint statement.
The energy-starved North Korea previously said it was being forced to reactivate its nuclear reactor in order to generate electricity, though reports from Washington suggest that the power output from the North's only operational 5-megawatt nuclear reactor is negligible and would be eaten up by the facility itself.
Energy shortages are a serious problem for the North's moribund economy. The communist country has been relying on outside food aid since 1995 to help feed its 22 million people.
This week's inter-Korean economic talks in Pyongyang were overshadowed by the year long tension over the North's nuclear weapons program.
South Korean officials warned that tourism and other inter-Korean economic cooperation projects under way could suffer unless the nuclear crisis is resolved promptly through dialogue.
A five-member South Korean delegation was scheduled to return home Saturday afternoon via China. The delegation was accompanied by a 31-member support team and journalists.
Source : www.korea.net
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