Go to contents

Direct Trade between Two Koreas without Middlemen

Posted August. 28, 2003 22:09,   


North and South Korea have decided to promote direct inter-Korean trade, in which North and South businessmen contact each other directly, rather than indirect trade with a third nation as a middleman. To do so, the two Koreas agreed to establish an office in the North Korean border city of Gaesong.

At the last day of the six round of inter-Korean economic talks, on August 28, the two delegations issued a nine-point joint statement at the Grand Hilton Hotel in Seoul.

“North Korea accepted South Korea`s proposal of setting up an office in Gaesong for small- and medium-companies to have negotiations,” said Kim Kwang-rim, South Korea`s vice minister of finance and economy, who led the South Korean negotiating team. “North Korea promised to notify its South counterpart of details on time and location by letter.”

Cho Myung-gyun of the Unification Ministry, a spokesman for the South Korean delegation, judged that it is a big step forward, since in a specific office, South Korean businessmen can negotiate on prices and quantity of products with its North Korean trading partner without a third party`s intervention.

In addition, South Korea decided to send an economic inspection team to the North in a return call. Last October, a North Korean economic team visited Seoul.

And North Korea also agreed to allow a group of 5-7 South Koreans to visit three cities along east and west coastlines to confirm that the 100,000-ton of rice provided by the South to the North in May was well delivered to North Korean residents.

The two Koreas agreed to finish railway links on the Gyeongui and Donghae lines by the end of this year. And both sides confirmed the understanding that the success of the Mt. Geunmgang project depends on whether to make profits or not.

As such, North Korea pledged to resume overland tours to the Mt. Geumgang resort starting September 1 and to designate the area as special tourism zone as early as possible. On the other hand, the South promised to consider giving financial support to the ailing business. The 7th round of inter-Korean economic talks is slated for late October in Pyongyang.

Seung-Ryun Kim srkim@donga.com