01.Trade and private economic cooperation projects between the two Koreas
Trade and economic cooperation projects in the private sector between North and South Korea started after the July 7 Declaration in 1988 when Daewoo Inc. gained approval from the ROK government to import 519 pieces of North Korean porcelain through an intermediary in Hong Kong. Since then, economic exchanges between the two Koreas evolved from general trade to commissioned processing trade to direct investment. In the early days, the majority of inter-Korean was simple trade of goods but developments took place permitting South Korea to provide materials and facilities to the North, for the North Korea to process them and then to export finished goods back to South Korea. Such commissioned processing trade represents the early stage of economic cooperation where the most is made of the needs and advantages of each side. It also opened the way to direct investment in North Korea.
The first investment in North Korea was by Daewoo Inc. in 1993, when the company gained approval for a cooperative project with North Korea where shirts, bags and jackets would be produced at Nampo Industrial Complex. Between 1993 and 2013, a total of 100 cooperative projects were approved, but seven of them have since been cancelled due to changed situations in the North, bringing the total number of approved projects down to 93 (including tourism in Mount Geumgang and excluding Gaeseong Industrial Complex). Direct investment in North Korea by private companies took place in various areas from Gaeseong, Pyongyang and Nampo to Goseong (Mount Geumgang), but most direct investment were in special zones such as Gaeseong Industrial Complex or Mount Geumgang.
02.Economic cooperation projects on the government level
Economic cooperation projects carried out by North and South Korean governments played a vital role in laying the groundwork for further economic cooperation to be led by the private sector in the 1990s. The ‘Act on inter-Korean Exchange and Cooperation’ and ‘Act on North South Cooperation Fund’ were legislated in August, 1990, and in 1994 and 1998, ‘Measures to reinforce inter-Korean economic cooperation’ were announced, providing the basis for further collaboration in the field.It was against this backdrop that earnest talks between the two Koreas about government-level economic cooperation projects took place in the 2000s. The project to prevent flooding of the Imjin River was the first project to be discussed as a government-level cooperative project, followed by projects to link railways and roads along the Kyeong Eui Line and Dong Hae line, projects for agricultural cooperation, provision of raw materials and projects for the joint development of mineral resources.
The project to prevent flooding of the Imjin River was pushed forward after it was agreed upon at the 2nd ministerial-level talks in September, 2000 and the Agreement on Measures to Prevent Flooding of the Imjin River was adopted by the 8th Economic Cooperation Committee in March, 2004. However, North Korea dragged its feet, only to hold an inter-Korean working-level talk in October, 2009 after an accident occurred near the Imjin River in September the same year. At this working-level meeting, both sides agreed on advance notice of discharge of the Imjin River and on continued efforts to establish a joint usage and flooding forecast system.
For more vibrant exchanges of people and resources in Gaeseong Industrial Complex and the Mount Geumgang area, a construction to link the railway and roads of the Kyeong Eui line and Dong Hae line broke ground in September, 2002. The construction to link roads was completed in October, 2004, and by 2013, a total of 1,300,000 vehicles have passed through the Kyeong Eui road and 180,000 vehicles through the Dong Hae road. Confirmation of the route that would link the two Koreas through railway was made in December, 2005. From December, 2007 to November, 2008 when North Korea blocked road traffic to Gaeseong Industrial Complex, a total of 224 roundtrips were made by cargo trains between Dorasan station and Panmun station.
Agricultural cooperation started by the two Koreas agreeing on five items at the first North-South Agricultural Cooperation Committee in August, 2005. The five fields included the operation of a pilot farm, support for facilities to select seeds and cooperation in agricultural technology. Again, however, North Korea’s passive attitude made it difficult for the projects to take off and South Korea eventually decided to push ahead with a pilot joint farming project through a private organization first. As a result, the Project Team for Reunification in Agricultural and Fishing Industries (private organization) formed a joint farming complex centering on the Samilpo Geumcheonri cooperative farm for the three years from 2005 to 2007. Based this success, the farm was further expanded to Gaeseong in 2007. But, since North Korea’s second nuclear weapons experiment in 2009, joint agricultural projects have been put on hold.
Joint projects in light industries or the development of underground resources were launched by the adoption of the Agreement on Cooperation in Light Industries and Development of Underground Resources between North and South Korea by the 12th Economic Cooperation Committee in June, 2006. South Korea provided 80 million dollars’ worth of raw materials for light industries (textile, shoes manufacturing, soap manufacturing etc.) as loans to the North from July, 2007 to March, 2008. Under the agreement that stipulated that North Korea would repay these loans with underground mineral resources, 1,005 tons of iron ore which account for 3% (or 2.4 million dollars) for the first year from December, 2007 to January, 2008 were handed over to South Korea. The remaining 97% is expected to be paid back in installments over 10 years starting in 2014, after 5 years of a grace period.
Meanwhile, as logistics increased due to inter-Korean trade and economic cooperation projects, The Agreement on North South Marine Transport and The Appendix Agreement for the Implementation of the Agreement on North South Marine Transport were adopted in May, 2004. This agreement took effect on August 1, 2005, opening a direct route that connects South Korea’s Incheon, Busan and Sokcho to North Korea’s Nampo, Cheongjin and Najin. The marine routes where only third country ships were allowed were also opened up to ships from North and South Korea. Since the Agreement took effect and till 2013, a total of 34,350 passages have been made and North Korean ships traversed South Korean waters 2,165 times (including the crossing of Jeju Channel 866 times).
03.Implementation of the ‘May 24th Measures’
In response to the attack on the Cheonan warship by North Korea (March 26, 2010), the ROK government, starting May 24, 2010, pledged the following: i) Total ban of North Korean ships passing through South Korean waters ii) Suspension of inter-Korean trade iii) Total ban of South Koreans visiting North Korea iv) Total ban of new investments in North Korea (excluding Gaeseong Industrial Complex) v) Temporary suspension of humanitarian aid to North Korea. However, aid towards the most socially vulnerable, including children in North Korea are considered an exception for these measures.In order to minimize the difficulties that South Korean corporations would face with the implementation of the May 24th Measures, the ROK government carried out the following: i) Survey of corporations conducting inter-Korean trade or economic cooperation projects (1st: May, 2010, 2nd: June, 2010, 3rd: May, 2011, 4th: May, 2013) ii) Approval of entry and exit regarding the advance payment made before May 24th Measures iii) Special loans for economic cooperation (1st loan: August, 2010 ~ February, 2011, 37.7 billon Won to 184 companies. 2nd loan: January ~ June, 2012, 18.3 billion Won to 99 companies) iv) Subsidies for emergency operation expenses (5.2 billion Won to 457 companies in September, 2012).
The May 24th Measures was an inevitable step that the ROK government had to take in order to deter North Korean provocation and establish a normal inter-Korean relationship. The government is firmly committed to these measures until North Korea takes responsibility for the provocation and attacks upon the Cheonan warship and Yeonpyeong Island.
댓글 없음:
댓글 쓰기