SKorea, US to discuss whether to include products from Kaesong in FTA

SEOUL (Xinhua) - South Korea and the United States planned to discuss next month whether to entitle products manufactured in the Kaesong industrial complex to preferential tariffs under the South Korea-US free trade agreement (FTA) framework, Seoul's commerce ministry said Sunday.

The first meeting of the Committee for Offshore Processing Zone on the Korean Peninsula will be held on Nov. 4 between Seoul and Washington, according to the Ministry of Trade, Industry and Energy (MOTIE).

The agreement on the scheduled meeting came after South Korean Trade Minister Yoon Sang-jick and US Trade Representative Michael Froman met on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meeting in Bali, Indonesia to assess the bilateral FTA between Seoul and Washington that took effect in 2012.

The ministry said that the two nations had been closely talking about schedules for the offshore processing area meeting, noting that the fixed date came after the normalization of the inter- Korean factory park in Kaesong, the border town of the Democratic People's Republic of Korea (DPRK).

Seoul and Pyongyang reopened the jointly operated factory park in mid-September, ending the five-month-long suspension caused by the DPRK's withdrawal of its workers from the industrial zone in protest against the joint military drills between South Korea and the US

If Seoul and Washington agree to include Kaesong in the offshore processing zone under the bilateral trade deal, products made by South Korean companies in factories in Kaesong would be entitled to preferential tariffs when they are exported to the US

Preferential tariffs are applied solely on products manufactured in territories of countries who signed the FTA, but the agreement on the offshore processing zone would widen the advantage to offshore regions agreed upon.

China and South Korea also agreed to discuss the offshore processing zone in the upcoming talks after wrapping up the first- stage negotiations on the bilateral trade pact. It was expected to help develop the Kaesong industrial complex into an international factory park.

Investor relation (IR) session will be held in Kaesong in late October to encourage foreigners to invest into the joint factory park just north of the heavily armed border. The investment briefing would be subject to foreigners belonging to foreign Chamber of Commerce and Industry stationed in Seoul, but details had yet to be decided.