U.S. seeks to ban Kaesong imports

WASHINGTON - A recent executive order issued by U.S. President Barack Obama is partly aimed at banning the import of products made at an inter-Korean industrial park in Kaesong, a North Korean border town, ahead of the ratification of a free trade pact with South Korea, a Congress-affiliated researcher said Wednesday.

Dick Nanto, a specialist in industry, trade and foreign affairs with the Congressional Research Service (CRS), noted that the April executive order prohibits the direct and indirect entry of North Korean goods.

“The Treasury Department’s Office of Foreign Assets and Control said goods, services and technologies from North Korea may not be imported into the United States directly or indirectly without license,” he said at a forum hosted by Korea Economic Institute.

He said the wording “indirect” was inserted in consideration of Congress’ objection to the inclusion of Kaesong products in the South Korea-U.S. free trade agreement, or KORUS FTA.

“That includes any country - China, South Korea - any country that uses a product of North Korea in the process or as part of the process,” Nanto said.

Created in 2002 in line with Seoul’s “sunshine policy” of engaging Pyongyang at that time, the Kaesong industrial complex is designed to benefit from the South’s capital and technology and the North’s cheap labor and land.

More than 40,000 North Korean workers are now employed by over 100 South Korean firms there, producing watches, clothes, utensils and other goods.

The status of goods produced in Kaesong was a sticking point in the negotiations of the Korus FTA, signed in 2007 and pending in the two sides’ legislatures.

The two sides struck a rather vague deal on the issue. For now, it would not give preferential treatment to finished products made in the area.

But the agreement calls for the establishment of a committee to discuss whether the Kaesong industrial zone should be given preferential treatment a year after the FTA takes effect.

On the other hand, South Korea’s free trade deal with the 10-member Association of Southeast Asian Nations recognizes products made in the Kaesong complex as South Korean products.

Yonhap