Economic Cooperation

[Anchor Lead]

Another key topic of the summit is inter-Korean economic cooperation. The Kaesong Industrial Complex, development of natural resources and social infrastructure such as rail construction are expected to be among the first to be discussed. South Korea's top business executives are also traveling to North Korea. What level of discussions will take place draws attention.

[Pkg]

The starting point of talks on cross-border economic cooperation that will be addressed during the Pyongyang summit is the inter-Korean agreement adopted at the previous summit in April. The two Koreas previously agreed to rail and road connection and their modernization. This will help produce a more advanced agreement in the area of social overhead capital this time around.

[Soundbite] Im Jong-seok (Head of Summit Preparation Committee): "Efforts will go to advancing the previous Panmunjeom Declaration rather than forging new agreements."

The South Korean business delegation including top executives who are meeting North Korean Deputy Prime Minister Ri Ryong-nam on Tuesday is also expected to focus on this point. Hyundai Motor's affiliates include Hyundai-Rotem which conducts rail business as well as Hyundai Engineering and Construction which has experience in North Korean projects. SK Group, armed with expertise in communications and energy, is also expected to hold talks with the North concerning cooperation in social overhead capital. The Kaesong Industrial Complex, which has been suspended for 3 years, and the development of North Korea's natural underground resources could also be discussed. South Korean steelmaker POSCO in the past had purchased North Korean anthracite and has also unveiled planned projects utilizing magnesite and graphite imports from the North. But experts note concrete agreements on cooperation projects may be elusive due to global sanctions on Pyongyang. Even if the denuclearization process proceeds smoothly and sanctions are lifted, it will likely take considerable time for cross-border cooperation to kick off in full swing.