By Yoon Won-sup
Staff Reporter
The two Koreas agreed Saturday on light industry cooperation, in which the South offers raw materials to the North in return for natural resources.
They settled unanimously on the price of raw materials during the second working-level meeting in Gaeseong, North Korea, Thursday. The light industry cooperation will begin late this month.
Out of 94 items of raw materials, 62 items such as clothing, shoes and soaps, equivalent to $80 million, were agreed. The two sides will discuss again for the further 32 items.
``It took quite a long time for the two sides to reach a compromise on prices on a list of items,'' a Unification Ministry official said. ``It was mainly because we preferred to provide products made in Korea at the domestic price of South Korea.''
North Korea suggested international price of raw materials while the South proposed local price of procurement. In Friday's overnight talks, North Korea agreed to accept the materials at the price South Korea suggested.
The North will pay the costs for transportation, cargo handling and demurrage while South Korea is to bear all the costs for shipping, insurance and port usage.
The South Korean side estimated these incidental expenses would be within $4 million, equivalent to five percent of the total cash price of the items to be supplied to North Korea.
Earlier this year, South Korea reconfirmed the agreement to supply industrial materials worth $80 million to the North to help revive its sagging light industry and it will get the right to develop natural resources in the North.
With the price agreement, North Korea is supposed to allow South Korean officials to conduct an on-site survey of three zinc and magnesite deposits in its mountainous northeastern region for 12 days beginning July 28. In return, the South will ship five tons of polyester fabric worth $700,000 to the North by July 25.
The two Koreans will make a joint research on the natural resources in September and October, too.
In 2005, South Korea agreed to offer industrial raw materials to the North to help it produce clothing, footwear and soap starting in 2006. In turn, North was to provide the South with minerals after mines were developed with South Korean investments guaranteed by Pyongyang.
But the economic accord has not yet implemented, as North Korea abruptly cancelled the scheduled test runs of inter-Korean cross-border trains in May last year.
The two Koreas carried out the historic test run of trains across their heavily armed border in May this year.