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After 65 Years, North And South Korea Will Formally Bring An End To The Korean War

Sixty-five years after an armistice put the Korean War on hold indefinitely, leaders in North and South Korea have agreed to take steps to officially end the war by the end of 2018.

What Happened?

North Korean leader Kim Jong Un and South Korean President Moon Jae-in met at the border between the two countries this week and signed a historic agreement pledging to negotiate a peace treaty between the two nations by year’s end.

“The two leaders declare before our people of 80 million and the entire world there will be no more war on the Korean peninsula and a new age of peace has begun,” the resolution said.

In addition, the resolution “confirmed the common goal of realizing, through complete denuclearization, a nuclear-free Korean Peninsula.”

Why It’s Important

Kim and U.S. President Donald Trump have repeatedly traded public insults since Trump took office, with Trump referring to Kim as “Little Rocket Man” and Kim referring to Trump as a “dotard” and “frightened dog.”

Kim has claimed he's on the brink of developing missiles that could drop as many as 60 nuclear bombs on cities throughout the U.S.

Friday morning, Trump praised the leaders of Korea and China for their progress.

On Thursday, Trump said the U.S. is planning on meeting with Kim in the near future, adding that “he has been very open and I think very honorable based on what we are seeing.”

What’s Next?

While the new agreement seems to mark a step in the right direction toward and end to hostility between North and South Korea, the resolution was short on details. Previous agreements between the two nations have broken down over disagreements related to inspections, weapons tests and economic measures.

Investors seem optimistic about the prospects of the new agreement and the potential elimination of a major global nuclear threat. Equity markets around the world traded higher on Friday, and the iShares MSCI South Korea Index Fund (ETF) (NYSE: EWY) was up by 1.4 percent on Friday morning.

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