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South Korea and the Democratic People's Republic of Korea (DPRK) on Thursday agreed to clear away policy barriers to economic cooperation between the two sides in order to make room for closer economic ties.
During a three-day inter-Korean economic talks in Kaesong, a DPRK near-border city, the two sides decided to put into effect four agreements on bilateral economic ties, which have already breezed through South Korea's National Assembly and the DPRK Supreme People's Assembly, after exchanging the ratified versions on Aug. 6.
The four bilateral economic agreements, delayed due to tensions on the Korea Peninsula and barriers in economic cooperation, had been ratified prior to the Kaesong talks amid signs of recovery and growth this year in inter-Korea economic ties.
Trade between South Korea and the DPRK was made possible with the easing of tensions on the Korea Peninsula and has grown both in volume and diversity in recent years.
Last year, trade volume between the two sides hit a record high of US$500 million. South Korean businesses have invested in the DPRK to produce goods for South Korean markets or for export to other countries.
The establishment of the Kaesong Industrial Complex and the Kumgang-san resort region, announced by the DPRK last year, has also opened up new possibilities for cooperation.
But a lack of rules has affected economic ties between South Korea and the DPRK. To bring economic cooperation onto a fast track, consensus on policies for trade, investment, financial transactions and taxation was desired by both sides.
In the wake of the 2000 inter-Korea summit between then South Korean President Kim Dae-jung and DPRK leader Kim Jong Il, the two sides struck deals on protecting investment in the DPRK, avoiding double taxation, settlement procedures for business disputes, and financial settlement.
Although inter-Korean trade boasts great potential and the Kaesong Industrial Complex lures South Korean investors, difficulties and barriers do remain in bilateral trade and investment.
To overcome the barriers, South Korea's Export Import Bank and the DPRK Foreign Trade Bank have been designated as settlement banks on each side for bilateral trade, ending the practice of remittance or financial settlement via banks in a third country.
South Korea and the DPRK have also agreed to implement the "place of origin" certification system to filter out foreign goods in bilateral trade and economic cooperation.
The two sides, however, failed to reach consensus on the formation of a trade arbitration committee to oversee bilateral trade disputes.
Negotiations over new policies are expected to continue between the two sides to give new impetus to their economic cooperation.
(Xinhua News Agency August 1, 2003)
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