South, North Sign Aid-for-Trains Pact

During the 12th round of South-North Economic Cooperation Committee talks on Tuesday, the government agreed to provide North Korea with $80 million (approximately 75.4 billion won) worth of light industrial materials needed for the production of clothes, shoes, and soap, which will eventually be paid back on the premise that North Korea allows the test run of trains on two cross-border rail links.

The two Koreas signed the “South-North Cooperation in Light Industry and Underground Resource Development Accord,” which states that it will take effect only if the “necessary conditions” are met. The signing took place during the plenary session, which started at 6:30 a.m., after overnight negotiations, at Lotte Hotel in Seogwipo City, Jeju Island.

Chief of Inter-Korean Exchange and Cooperation Bureau Kim Chun-sig of the Ministry of Unification, who is the spokesman for the South Korean delegation, explained that the “necessary conditions” stated in the accord mean the test operation of the trains during a briefing. He said that North Korea agreed to this during the meeting, and that the Korean government emphasized this requirement during the plenary meeting.

The actual implementation of the accord is expected to take a while, as the North Korean military is still requesting the redrawing of the Northern Limit Line (NLL) in the West Sea in exchange for the military’s approval of the entry of trains into North Korea.

According to a government official, the North Korean side had initially requested that the South Korean government refrain from linking the test operation of the trains to supplying light industrial materials, but in the end agreed to the South Korean government’s request for the settlement of the test operation to prevent another cancellation.

The two Koreas agreed that the provision of the materials would start this August. A government official said, “If the North Korean military does not issue an approval by August and the test operation does not go through, the delivery of the materials will be delayed until the test operation.

The accord states that North Korea must repay three percent (2.4 million dollars) of the 80 million dollars worth of materials in mineral resources such as zinc ingots the year the delivery is made. The other 97 percent (7.8 million dollars) will be repaid in ten years after a grace period of five years at one percent interest.

The two sides agreed not to export products made from the materials supplied by South Korea and the materials themselves to a third country.

The two Koreas also agreed to start collecting aggregate from the mouth of the Han River as soon as military approval is issued, and hold working-level meetings on simplifying the admittance and customs process to the Gaesong Industrial Complex and on construction of living quarters and amenities in the complex. The two sides agreed to hold the 13th round of South-North Economic Cooperation Committee talks in September in Pyongyang and ended the four-day meeting.

Myoung-Gun Lee gun43@donga.com