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NORTH KOREA NEWSLETTER NO. 28 (November 6, 2008)

All Headlines 11:27 November 06, 2008


First Inter-Korean Joint Venture launches in Pyongyang

SEOUL (Yonhap) -- Amid strained relations between the two Koreas, a rare inter-Korean joint venture firm started operation in Pyongyang on Oct. 30 with a ceremony attended by hundreds of people from both Koreas.

The 50-50 joint venture is the first South Korean business company established in the North Korean capital, although there are 79 South Korean-operated manufacturers are currently operating at the joint industrial complex in Kaesong just north of the heavily armed inter-Korean border.

Pyongyang Hemp Textiles is a cooperative effort between the South's Andong Hemp Textiles and the North's Saebyol General Trading Co., with a total investment of US$30 million shared equally by the two sides. The ceremony had been delayed for about two months due to deteriorating inter-Korean relations.

Around 1,000 North Koreans will be working for the textiles and logistics firm, which is built on 47,000 square meters of land in Pyongyang, they said.

In a congratulatory address, former South Korean President Kim Dae-jung said the joint venture is a great achievement made through the concerted efforts between business people from the divided Koreas.

Kim did not attend the ceremony in person, but president of Andong Hemp Textile Co. Kim Jeong-tae read the address on his behalf. "The opening of the joint venture will provide a basis for rapprochement and cooperation between business people from the South and the North under the spirit of the June 15 Joint Declaration in 2000," the former president said.

The ceremony came after Pyongyang threatened to cut off all ties with Seoul unless its conservative government, led by President Lee Myung-bak, softens its stance against the North and ceases what Pyongyang describes as Seoul's "confrontational racket."

Last week, the North's military also threatened to take "a resolute practical action" if South Korean civic groups continue to send balloons carrying tens of thousands of anti-Pyongyang leaflets over the North.

Seoul, which agreed with Pyongyang in 2004 to halt all propaganda activities along their shared border, had requested the groups to stop sending the leaflets. The civic organizations rejected the request.

A 254-member South Korean delegation left Seoul on a chartered commercial flight to Pyongyang on Oct. 29 to attend the ceremony, Kim Ho-nyoun, spokesman for Seoul's Unification Ministry, said in a daily press briefing.

"The delegation is the largest ever to visit North Korea under the current South Korean administration," the spokesman said.

Rep. Kim Gwang-lim of the ruling Grand National Party (GNP) is among those who visited the North Korean capital. A proposed visit by two other GNP lawmakers was rejected by Pyongyang for unspecified "internal issues."

The opening ceremony for the joint venture was delayed for close to two months due to deteriorating inter-Korean relations, which worsened after a South Korean woman was shot to death while traveling the communist country in early July. Pyongyang refused to apologize for the shooting, and denied requests from Seoul to cooperate in a fact-finding mission into the death.

The southern delegation returned home on Nov. 1 after attending an investment briefing given by Pyongyang, as well as touring industrial facilities in nearby cities and hiking the North's famed Mt. Paektu.


Seoul to Ship Steel to N.K. after Nuke Verification Agreement

SEOUL (Yonhap) -- South Korea will likely postpone steel shipments to North Korea until agreement is reached at upcoming six-party nuclear disarmament talks on a protocol to verify the socialist state's nuclear declaration, government sources said Oct. 31.

The South had planned to ship a total of 3,000 tons of steel pipe by the end of October as pledged to the North.

North Korea had been promised 1 million tons of heavy fuel oil or its equivalent by five negotiating partners -- the U.S., China, Japan, Russia and South Korea -- in return for its disablement of key nuclear facilities.

"The government is contemplating ways to ship 3,000 tons of steel pipe promised to North Korea as part of the six-party deal after a verification protocol is formally adopted in the soon to be held nuclear talks," one of the sources said.

Seoul also plans to approve the protocol only if it contains crucial elements for nuclear inspections of North Korea, the sources said.

"The government would welcome it if the protocol to be adopted in the six-party talks includes all the contents of the deal between Pyongyang and Washington," a source said. "But if not, our position can be changed."

Inter-Korean ties have been chilly since conservative South Korean President Lee Myung-bak took office in February and vowed to link inter-Korean cooperation programs to denuclearization.

The U.S. State Department announced on Oct. 11 that the North agreed to verification of all of its nuclear activities, including an alleged covert highly enriched uranium program and suspected proliferation.

However, visits to sites not included in the North's nuclear declaration will require "mutual consent," it said.

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