Kim Jong Un, North Korea’s leader, left, and Moon Jae-in, South Korea’s president, embrace after signing a deal to end a seven-decade war. Source: Inter-Korean Summit Press Corps/Pool via Bloomberg

What an End to the 68-Year Korean War Would Mean: QuickTake

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(Bloomberg) -- As neighborly disputes go, this one really has dragged on. Some 65 years since open hostilities ended, North and South Korea are still technically at war. However, after a sudden warming of relations this year, Kim Jong Un became the first North Korean leader to visit South Korea on April 27. He held talks with his South Korean counterpart, Moon Jae-in, together reaching an agreement to put an end to hostilities this year.

1. Why is the Korean War still not over?

Because the parties involved in talks to end the war -- North and South Korea, China and the United Nations (representing the international community, including the U.S.) -- never were able to agree on a peace treaty. What was signed in 1953 was only an armistice, or truce, and only among three of the four parties, as South Korea held out. That’s why the border between the two nations has been one of the world’s tensest for decades.

2. What did Kim and Moon agree on?

They announced plans to formally declare a resolution to the war and turn the current armistice into a peace treaty by year’s end, as well as aiming for full denuclearization of the Korean peninsula.

3. Have the two countries come close to peace before?

It’s seemed that way. At a 2007 summit in Pyongyang, President Roh Moo-hyun and Kim Jong Il (Kim Jong Un’s father) settled on dozens of agreements aimed at supporting North Korea’s economy and recommitted to a declaration made at a summit in 2000 -- the first between leaders of North Korea and South Korea -- that the two sides would seek peaceful reunification.

4. What came of that peace effort?

Negotiations -- known as the “six-party talks” -- broke down in 2008 after North Korea refused to allow international inspectors to visit nuclear facilities. Around the same time, South Korea elected a conservative president, Lee Myung-bak, who favored a harder line and abandoned his predecessor’s so-called "Sunshine Policy" toward North Korea. The sinking of a South Korean corvette, killing 46 sailors, by a suspected North Korean torpedo prompted the newly elected president to cut off all ties.

5. Would peace lead to economic ties?

Not necessarily. South Korea would be unlikely to agree to economic aid until the U.S. agrees to relax sanctions in return for North Korea agreeing to denuclearize. Those figure to be among the major issues for U.S. President Donald Trump and Kim at their planned meeting in the next couple of months.

6. How far apart are the two Koreas economically?

The gap between the North Korea and South Korea today is far greater than that between East and West Germany when the Berlin Wall came down. A 2015 report from the National Assembly Budget Office estimated that even under a peaceful scenario in which Seoul expanded humanitarian support ahead of a hypothetical reunification in 2026, it could cost about $2.8 trillion to help bring North Korea’s gross domestic product to two-thirds that of South Korea’s. That’s almost 8 times South Korea’s 2017 annual budget.

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