Seoul wants Kaesong goods to get U.S. tariff favor

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Seoul wants Kaesong goods to get U.S. tariff favor

South Korea will push to get Kaesong-made products to receive tariff benefits under the free trade pact with the United States, a government official said yesterday.

Unification Ministry spokesman Kim Hyung-suk told reporters that Seoul wants products made at the Kaesong Industrial Complex in North Korea to receive the same kind of favored duties as goods made in South Korea.

“The two countries will hold talks to touch on the country of origin issue for the Kaesong-made goods, but no exact date has been fixed for the start of negotiations,” the official said.

The remarks come as the Korea-U.S. free trade agreement, dubbed the Korus FTA, went into effect a year ago on March 15, and diplomatic sources said Seoul and Washington are in the process of holding a special Outward Processing Zone (OPZ) committee.

The two trading partners agreed to hold OPZ meetings a year after the FTA went into effect to discuss whether or not to give goods from Kaesong made by South Korean companies the benefits of the FTA.

Kaesong is considered the crowning achievement of the 2000 inter-Korean summit between South Korean President Kim Dae-jung and his North Korean counterpart Kim Jong-il.

Work to build the complex, just north of the Demilitarized Zone that separates the two countries, began in June 2003, with the first products being made in late 2004.

Most of the products are brought back to South Korea and used as parts for other products, with some being shipped abroad.

Sources, however, said that even if the U.S. administration accepts Seoul’s calls to include Kaesong goods into the FTA framework, such a move will likely be vetoed by lawmakers on Capitol Hill, especially since Pyongyang has ratcheted up tensions with the detonating of its third nuclear device in February and the launching of a long-range rocket late last year.

The rocket and nuclear test could one day lead to the communist country being able to strike the United States with a nuclear warhead attached to an intercontinental ballistic missile. Yonhap
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