Invest KOREA

South and North Korea agreed Wednesday to resume the operation of a joint industrial complex in the communist country next week after a five-month hiatus, Seoul's unification ministry said.

The deal, which came after overnight negotiations between the two sides, will revive the last-remaining major inter-Korean venture that has been shuttered since early April. The complex is viewed as the crowning achievement of the historic summit meeting between the leaders of the two countries in June 2000 that ushered in an era of detente between the two Koreas.

Under the agreement, South Korean firms will be allowed to restart operations at the site just north of the inter-Korean border after a trial run on Monday, said the ministry which handles inter-Korean affairs.

The agreement ends the standoff surrounding the Kaesong complex that began with the unilateral pullout of North Korean workers from the factory zone on April 9. Pyongyang had pulled its roughly 53,000 workers from the park citing political and military provocations from South Korea.

"The two sides have effectively reached an understanding on creating administrative measures and safeguards that can transform Kaesong into a globally competitive industrial park," a ministry source said.

He expressed hope that the agreement can pave the way for "progressive development" of the complex and lay the foundation for building trust and sustainable growth in cross-border relations.

Under the deal, South Korean firms will be exempt from paying taxes for the rest of 2013 and allow a waiver payment for taxes that went unpaid in 2012 until the end of the year.

The Kaesong Industrial District Management Committee and the North's General Bureau for Central Guidance to the Development of the Special Zone will hold separate talks to resolve the issue of unpaid wages for North Korean laborers who worked several days in April before all operations came to a halt.

The two sides also adopted an agreement calling for the creation of a dispute arbitration panel and concurred on easing access to the complex by introducing radio-frequency identification devices (RFID) within the year.

Even before the RFID system is set up the two sides will work together to make it easier for businessmen to move across the demilitarized zone that separates the two countries. At present, the North insists on vehicles forming caravans and strictly regulates the time when crossings can occur.

They made an affiliated agreement that calls for adherence to rules governing the rights and safety of South Koreans traveling to and staying at the industrial park. Such pacts were signed in the past but were ignored by the North.

The two sides exchanged draft proposals that will better protect the rights of violators and pledged to conduct more talks to iron out details.

The agreement also calls for holding an international investor relations session to highlight the merits of the Kaesong complex to potential foreign companies in October, and the establishment of a permanent secretariat by the end of the month.

Seoul and Pyongyang said they will continue discussions on allowing South Korean businessmen to use mobile phones and the Internet in the factory park as part of the broader effort to transform the mainly Korean economic zone into a true global manufacturing hub.

The two countries said that another round of sub-committee sessions will be convened on Friday with the joint committee to meet for its third session on Monday to check development and set a timetable for pushing forward agreements reached.

Related to the agreement reached, the unification ministry said that even in areas where there was no agreement, considerable progress was made to reduce the gap. It said that due to the progress made remaining issues should be resolved at the sub-committee meetings scheduled for the end of the week so it can be confirmed at the next joint committee talks.


Source Text

Source: Yonhap News (Sep. 11, 2013)