South Korea and Russia will conduct a joint study to check the feasibility of cross-border energy projects involving North Korea and prepare negotiations for a trade deal to bolster bilateral economic ties, Seoul's trade ministry said Friday.
The Ministry of Trade, Industry and Energy said it signed eight memorandums of understanding (MOUs) with Russia's energy ministry and state utility firms to expand cooperation in energy, industry and investment between the two nations.
The agreements were reached while President Moon Jae-in was on a three-day visit to Moscow to strengthen ties with Russia.
Minister of Trade, Industry and Energy Paik Un-gyu (second from right) sit with Finance Minister Kim Dong-yeon and Foreign Minister Kang Kyung-wha at Russia's Kremlin during the Moon-Putin summit. (Yonhap)
"South Korea and Russia will jointly conduct studies on connecting the power grid between the two nations," the ministry said in a release. "It is expected to provide a blueprint for connecting a power grid between two Koreas and Russia when conditions are met in the future."
Under Moon's "New Northern Policy," Seoul has been exploring ways to step up economic cooperation with the vast Eurasian country in various areas, including energy, shipbuilding, fisheries and transportation.
The mood of detente in the wake of North Korean leader Kim Jong-un's recent summits with Moon and U.S. President Donald Trump has raised expectations that cross-border projects that link South Korea and Russia's Far East can become a reality.
Potential projects include the connection of a cross-border inter-Korean railway with the Trans-Siberian Railway, as well as the establishment of a power grid that connects Russia with the Northeast Asian electricity network that would include South Korea, China and Japan.
The initiative moreover outlines the building of "nine bridges" between South Korea and Russia, including natural gas, railroads, seaports, electricity, Arctic shipping routes, shipbuilding, agriculture and fisheries.
As part of the initiative, Moon also proposed a free trade agreement (FTA) with Russia to boost trade and investment to the benefit of all sides."If a bilateral FTA is struck, it would pave the way for Korean companies to get ahead in the logistics, medical, tourism, construction and IT service markets in Russia and improve their competitiveness in the service sector," the ministry said.
His proposal came as trade between the two countries had been on a steady decline amid a global economic downturn and the spread of global protectionist trends.
Bilateral trade between South Korea and Russia plunged 38 percent from $25.8 billion in 2014 to $16 billion the following year, and fell another 16.2 percent on-year to $13.4 billion in 2016, according to the ministry.