Seoul, Nov 08: South and North Korea agreed today to establish a joint office aimed at facilitating direct trade between the two sides, a statement from both countries said. The two Koreas will build the trade office by July next year in the North Korean city of Kaesong, where the South is building an industrial park, said the statement issued at the end of four-day economic talks in Pyongyang.

Last year, inter-Korean trade reached USD 642 million, including the South's food, fertiliser and other aid to the North. Direct trade accounted for less than 10 per cent of that amount, and most trade between the Koreas goes through China. The Koreas also agreed to construct a model of the planned Kaesong industrial park by the first half of next year to lure South Korean businesses.
During the talks, the two Koreas sparred over the impoverished north's request that the south provide badly needed energy aid.

Seoul rejected the request, saying it could put financial strains on other inter-Korean projects including the industrial park and cross-border railways and roads. Bureau Report