Weapons of Mass Destruction (WMD)

o The two sides also agreed to make efforts to ensure military assurances for the opening of roads.

* Currently, military assurance is provided based on the "Provisional Agreement for Military Assurances on Passage via the Temporary Roads in the Administration Area of the Two Koreas in the East and West Coast Areas" adopted on '03.1.27. 9.17. However, it is still necessary to adopt a new agreement on passage along the roads stipulating safety assurances for such passage and mutual cooperation in the case of accidents.

- Opening the roads will enhance safety and convenience in creating the model complex within the Gaeseong Industrial Complex, Mt. Geumgang tours via land routes and in seeking other inter-Korean economic cooperation projects.

¨é Establishment of the Inter-Korean Economic Cooperation Consultation Office

o The South and the North exchanged and shared their views that the Consultation Office of Inter-Korean Economic Cooperation is a consultation channel for expanding direct trade between the two Koreas while further promoting inter-Korean economic cooperation.

- Both sides agreed to discuss details of the establishment and operation of the office such as its functions, assurance of activities, telecommunications, etc. through an exchange of documents and adopt an agreement at the earliest possible date.

o Once the office is established, high costs and inconvenience of "indirect" trades to date via third countries as middlemen will be resolved, which is expected to act as a major catalyst in boosting inter-Korean trades.

¨ê Expansion of institutional frameworks for economic cooperation

o The government will seek a motion in the National Assembly on those inter-Korean agreements that include items requiring legislation on people's rights and obligations.

- Agreements on Vehicle Operation (Dec. 6, 2002), Telecommunications in the Gaeseong Industrial Complex, Customs, Quarantine (Dec. 8, 2002), Shipping(Dec.28, 2002), the appendix to the Shipping Agreement (June 3, 2004), the Establishment and Operation of the South-North Commercial Dispute Arbitration Committee (Oct. 12, 2003), and on Entry, Exit and Stay in Gaeseong and Mt. Geumgang (Jan. 29,2004), among others.

* Currently, a procedure is underway within the government to effectuate these agreements, such as their prior examination by the Ministry of Government Legislation.

o Follow-up measures to be taken such as provision

of appendices to the agreements.

- Appendix to Telecommunications Agreement, appendix to Agreement on Customs Clearance, appendix to Quarantine Agreement, Agreement on Detailed Criteria for Confirmation of Origin, appendix to Agreement on Vehicle Operation, appendix to Agreement on Train Operation, and Agreement on the Establishment of Joint Committee on Entry, Exit and Stay.

- Designation of a support channel for clearing settlement, consultative body between maritime authorities for shipping, and creation of a commercial dispute arbitration committee, among others.

o Follow-up measures to the Inter-Korean Shipping Agreement

- The South and the North need to discuss issues surrounding opening sea routes between seven ports of both sides respectively, the construction and operation of a fixed-line telecommunications network between the maritime authorities of the two sides (2 lines), and mutual cooperation through notification of maritime affairs, among others.

- Once the Shipping Agreement comes into effect, direct transportation by national flag carriers will be made possible, which lays the groundwork for safer and more efficient maritime transportation between the two Koreas. This will, in turn, not only promote inter-Korean trade, but also serve as a basis for inter-Korean cooperation in shipping.

¨ë Addressing issues faced by businesses in economic cooperation

o In the meeting, the government raised issues facing businesses in the process of inter-Korean economic cooperation, and both sides agreed to actively cooperate to resolve them.

- The government called for the expansion of on-site technology guidance, inspection before shipment, and telecommunications service, among others.

o The government will keep track of these issues to ensure that they are adequately addressed, and plans to actively take into consideration businesses' needs in policies.

¨ì Supply of rice as food loan

o In the meeting, the North officially requested that the South provide food assistance.

- The South agreed to provide 400 thousand tons (similar level to previous years) to the North in consideration of the foot shortage in the North (1 million ton annual shortage).

* The South has provided the North with 500 thousand tons (300 thousand tons of foreign rice + 200 thousand tons of corn) in 2000, 400 thousand tons of Korean rice in 2002, and 400 thousand tons of Korean rice in 2003.

4. Future schedule for inter-Korean talks

o The 2nd Working-level Consultative Meeting on Gaeseong Industrial Complex: June (Gaeseong)

o The 10th Working-level Consultative Meeting on Inter-Korean Railroad and Road Re-connection: June 30-July 2 (Mt. Geumgang)

o The 5th Working-Level Meeting on Shipping: July 13-15 (Sokcho)

o The 15th Inter-Korean Ministerial Talks: Aug. 3-6 (Seoul)

o The 10th Meeting of the Inter-Korean Economic Cooperation Promotion Committee: Aug. 31-Sept. 3 (Seoul)

<Appendix> Agreement Reached at the 9th Meeting of the Inter-Korean Economic Cooperation Promotion Committee
 

< Appendix >

Agreement Reached at the 9th Meeting of the Inter-Korean Economic Cooperation Promotion Committee

The South and the North held the 9th-round meeting of the Inter-Korean Economic Cooperation Promotion Committee in Pyongyang from June 2 to 5, 2004.

At the meeting, the two sides discussed issues of economic cooperation for paving the road for mutual prosperity pursuant to the spirit of the June 15 Inter-Korean Joint Declaration, and agreed as follows:

1. The South and the North shall ensure the completion of construction of a model complex within the one million pyeong (3.3 million square meters) first-phase development area of the Gaeseong Industrial Complex so that production can start in the complex by the end of 2004, and will actively cooperate with each other to set up and commence operation of the Gaeseong Industrial Complex Management Organization by June 2004.

In relation to this, both sides will cooperate to ensure the supply of electricity and telecommunications using optical fiber transmission lines linking Munsan, Gaeseong (telegraph and telephone bureau) and the telecommunications center in the Gaeseong Industrial Complex on a commercial basis starting in September, and will start internal preparations for the next phase of development, once the first-phase development and construction on the 1-million-pyeong area makes good progress.

2. The South and the North will simultaneously open reconnected railroad sections of the Seoul-Shinuiju (Gyeongui) Line and the Donghae (East Sea) Line in 2005, and both sides will conduct test runs on the previously agreed upon possible sections in October 2004.

Along with this, both sides will open reconnected roads along the Seoul-Shinuiju (Gyeongui) Line and the Donghae (East Sea) Line within October 2004 once military assurance is provided.

3. The South and the North shall adopt and effectuate an agreement on the establishment and operation of the Inter-Korean Economic Cooperation Consultation Office through an exchange of documents at the earliest possible date.

4. The South and the North shall make efforts to put into effect agreements already concluded or initialed at the earliest possible date, and will take follow-up measures including creating appendices to these agreements, among others.

In relation to this, the two parties agreed to effectuate the Inter-Korean Shipping Cooperation Agreement (including the Appendix), which was already signed and exchanged by the two, at the earliest possible date, and will discuss when to allow ships of the other side to pass through one's territorial waters, along with other navigation-related issues, at the working-level talks for inter-Korean Shipping.

5. The South and the North will actively cooperate to resolve issues raised in relevant fields in order to promote non-governmental economic cooperaton.

6. The South will provide 400 thousand tons of rice as a food loan to the North based on the spirit of mutual aid and brotherhood.

7. The 10th meeting of the Inter-Korean Economic Cooperation Promotion Committee shall take place in Seoul from Aug. 31 to Sept. 3, 2004.

The 2nd Working-Level Consultative Meeting on the Construction of the Gaeseong Industrial Complex shall be held in Gaeseong in June, the 10th Working-level Consultative Meeting on Inter-Korean Railroad and Road Re-connection shall be held at Mt. Geumgang from June 30 to July 2, and the 5th Working-Level Talks on Inter-Korean Shipping will be held in Sokcho from July 13 to 15, respectively. If any working-level consultative meeting or working-level talks are necessary, they shall be held after a schedule is arranged.

June 5, 2004