In the year of 2000, a historic summit was held between the two Koreas that produced the June 15 Joint Declaration, which defined the South-North economic relations and expressed North Korea's official agreement to engage in economic cooperation with the South.

The Declaration has since paved the way for further communication with the North and the facilitation of both official and private exchanges between the two Koreas in a number of areas including: sightseeing of Mt. Geumgang, reopening of inter-Korean railways and building of the Gaesong Industrial Complex(GIC). In February 2007, an agreement was reached at the six-party talks as North Korea agreed to resolve existing nuclear hostilities and reduce military tension by shutting down its main Yongbyon nuclear plant in return for 50,000 tons of fuel.

On October 4, 2007, another declaration was signed between the two Koreas at the second inter-Korean summit. This represented another key milestone in nearly 20 years of the South-North economic cooperation. Both sides agreed to open freight rail services between Munsan and Bongdong and embark on the second development stage of the GIC backed by the financing of South Korean businesses.

The October 4 Declaration also reaffirmed the commitment to simplify passage, communication and customs clearance procedures between the two Koreas and agreed to further their discussion on repairing the Gaesong-Shinuiju railway and the Gaesong-Pyongyang expressway. In addition, decisions were made to establish a "Special Peace and Cooperation Zone in the West Sea” in a way to push ahead with the utilization of the Haeju Harbor, establishment of a special economic zone and the joint use of the Han River estuary.

Some items in the agreement were discussed in the talks by prime ministers of South and North Korea met in Seoul from November 14-16, 2007. The focus of the meeting was full implementation of the October 4 Declaration issued at the end of the summit between the two Koreas. The talks proceeded amicably, resulting in 49 agreements under eight articles, reflecting the strong desire of both sides to cement progress. They revolve around further high-level contact and advancing economic cooperation, central pillars of the October summit Declaration.

By virtue of these ongoing efforts, the two Koreas have attained substantial progress in their economic cooperation. Since ground transportation to the North became possible through the reconnected Donghae and Gyeongeui lines, annual visitors via land have steadily increased to reach the 1.8 million mark(including tourists to Mt. Geumgang) in 2007. Cross-border visitors, excluding the tourists to Mt. Geumgang, reached 159,214 in 2007, a 56.5% increase from the previous year.

Trade volume between the two Koreas increased by 33.1% from USD1,350 million in 2006 to USD1,797 million in 2007. In particular, commercial transactions increased remarkably thanks to the facilitation of GIC projects, processing-on-commission, and general trade.

Gaesung Industrial Complex(GIC) is a model case and a challenge to form a Korean exonomic community by combining South Korea's capital and technology with North Korea's labor force. The construction of infrastructures such as electricity supply facilities and communication networks was completed as of 2005. The GIC has shown a steady increase in production, resulting from a rise in the number of enterprises and stabilization of their operations. As of the end of 2007, 65 enterprises were in operation in the complex. Production at the GIC recorded USD15 million in 2005, USD74 million in 2006 and USD184 million in 2007, reaching about USD274 million in total as of the end of 2007.