ASEAN countries accept N. Korean park in free trade deal with S. Korea

Gaeseong (Kaesong) industrial complex.

ASEAN countries agreed to accept South Korea's request to recognize some products from a North Korean industrial park as South Korean as part of their plan for a free trade pact, officials here said Thursday.

Under the agreement, nine out of the 10-member Association of Southeast Asian Nations will give preferential tariffs on 100 items manufacturered in the inter-Korean business complex in the North Korea's border city of Kaesong, the Ministry of Foreign Affairs and Trade said in a statement.

South Korea and ASEAN agreed on the liberalization of merchandise trade between the two sides by 2010 in May, but the signing was made on the same day in an economy-related ministers' meeting in Kuala Lumpur, the ministry said.

"We feel this is an important step in integrating North Korea into the international community and ... I would like to express my gratitude to ASEAN," AFP quoted South Korean Trade Minister Kim Hyun-chong as saying at a press conference in Kuala Lumpur.

The agreement allows ASEAN countries to choose 100 Kaesong-made goods each for the preferential tariff treatment, the Korean ministry said. Thailand, the ASEAN member country that stayed out of the agreement in May due to differences over the rice market opening, didn't sign the Thursday agreement, the ministry said.

Still, to finalize the proposed free trade accord, South Korea and ASEAN have to have open talks on other deals, trade in services and investment.

South Korea is also engaging in talks for a proposed free trade accord with the United States and the so-called Kaesong issue is poised as one of key stumbling blocks.

Seoul demands Washington recognize the Kaesong-made goods as originating from South Korea, as part of its efforts to boost inter-Korean trade and bring market economy to the communist neighbor. However, Washington's trade officials have been cool about the idea, saying the agreement should cover goods only from South Korea and the U.S.

The Kaesong complex is a key product of the landmark summit between the two Korean leaders in 2000, a meeting that boosted reconciliation and cooperation programs involving the two countries. South Korea began building the Kaesong complex in mid-2003. Now 15 South Korean companies produce clothes and kitchenware there, and employ about 6,000 North Korean workers.

South Korea and the U.S. plan to open their third round of talks from Sept. 6-9 in the U.S. West coast city of Seattle.

Seoul, Aug. 24 (Yonhap News)