Small- and medium-sized enterprises commended the two leaders for agreeing to resolve three major issues -- travel, communications and customs clearance. But other businessmen are concerned, with some corporations saying the declaration isn't enough. There are still pressing issues that need to be addressed, they say, including the North's removal from the U.S. list of state sponsors of terrorism and the possibility that South Korean businesses will see their global reputations tarnished by trading with the North.

Other businessmen are worried that they might have to pay for infrastructure construction. And above all there's the issue of whether North Korea intends to keep its promises. "If the declaration is put into practice, North Korea could become an attractive investment destination," said Lee Seung-chul, vice president of the Federation of Korean Industries. "But the two Koreas have signed agreements in the past and failed to put them into practice. So the most important thing is how strongly North Korea stands behind the declaration."

Night view of Kaesong Industrial Complex from Dorasan station. President Roh Moo-hyund and delegation came back to Seoul after three-day visit to North Korea on Thursday. / Yonhap

South Korean business leaders said the declaration is more progressive than expected. A senior executive with Samsung Group said, "The declaration reflects most of the demands from the enterprises participating in cross-border trade, including the use of the Kaesong-Shinuiju railway. This will serve as an opportunity to galvanize inter-Korean cooperation."

Of the four largest business groups, Samsung is the most aggressive in cross-border trade. Samsung advanced into North Korea in 1992 and has been producing apparel, color TVs and radio cassette players on a processing-on-commission basis. Taedonggang TV factory in Pyongyang produces some 20,000 color TVs per year.

If cross-border cooperation proceeds according to the declaration, it will be possible to offer information and communication and service activities in North Korea, advancing from just simple processing-on-commission trade, Samsung Group believes. With the lack of infrastructure in the North, the Group believes it will be easier to advance into the service industry rather than more complex manufacturing.

Hyundai-Kia Automotive Group and POSCO are interested in Korea's natural resources. Minerals are abundant in North Korea, including iron ores and limestone which can be used for the iron and steel industry. Rotem and Glovis, subsidiaries of Hyundai-Kia Automotive Group, are also considering advancing into rolling stock and logistics.

LG Group is looking for opportunities to expand its current processing-on-commission project for electronics. An executive with Ssangyong Motor, whose largest shareholder is Shanghai Automotive Industry, said, "So far, 24 Chairman sedans have been imported into North Korea through Pyongwha Motors. Though we haven't received any instructions from the head office yet, we can play an intermediary role between the South and the North."

A clothing company executive at the Kaesong Industrial Complex said, "At present, we're limited to just 21 trips across the border per day, and we have to report our travel schedule three days ahead. If these restrictions were eased we would be able to freely schedule our production and delivery."

The proposal for railway cargo transport between Munsan and Bondong will also likely play a major role in increasing cross-border trade. Many businessmen have high expectations for a special economic zone in Haeju. Kim Jae-jin from the International Trade Team of the Korea Federation of Small and Medium Business said, "With North Koreans having no freedom to travel, the Kaesong Industrial Complex is currently suffering from a lack of labor. If a special economic zone is established in Haeju, it would be helpful in securing a new labor force."

However, it won't be easy for North Korea to open its telecommunications or Internet industry -- one of the three major sectors under the declaration -- considering that most of the equipment needed is banned under international agreements, South Korean business leaders said. Even if the two Koreas were to reach an agreement on telecoms development, it won't be easy for either side to get by the international rules.

Another stumbling block is the U.S. designation of North Korea as a state sponsor of terrorism. Because of this, products made in North Korea cannot be exported to the U.S.

"There are still many political and international variables," said Prof. Kang Suk-hoon of Sungshin Women's University. "It's still hard to secure guarantees for sustainability and security of investments in North Korea, so the private sector is still faced with limits on cross-border trade and investment."

(englishnews@chosun.com )