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(4th LD) Koreas agree to reopen joint factory park next week

2013/09/11 17:39

(ATTN: UPDATES with more details, comments in paras 3, 8, 18; ADDS last five paras, new photo)

SEOUL, Sept. 11 (Yonhap) -- South and North Korea agreed Wednesday to resume operations at a joint industrial complex in the communist country next week after a five-month hiatus, Seoul's unification ministry said.

The deal, which was reached after more than 20 hours of negotiations, will revive the last-remaining major inter-Korean venture that has been shuttered since early April. The complex is viewed as the crowning achievement of the historic summit meeting between the leaders of the two countries in June 2000 that ushered in an era of detente between the two Koreas.

Under the agreement, South Korean firms will be allowed to restart operations at the site just north of the border after a trial run on Monday, said the ministry, which handles all North Korean affairs. It added that with the date for the resumption of operations set, the two sides can now strive for the "progressive development" of the complex and lay the foundation for building trust and sustainable growth in cross-border relations.


The agreement ends the standoff surrounding the Kaesong complex that began with the unilateral pullout of North Korean workers from the factory zone on April 9. Pyongyang had pulled its roughly 53,000 workers from the park citing political and military provocations from South Korea.

"The understanding reached is significant because it shows various efforts to revise operations systems are making progress and can transform Kaesong into a globally competitive industrial park," said Kim Ki-woong, co-chairman at the committee and Seoul's top negotiator at the talks.

He added the agreements reached will allow normal operations to resume and meet the wishes of local companies that want to return to work at Kaesong.

Under the deal, South Korean firms will be exempt from paying taxes for the rest of 2013 and the communist country agreed it will not ask for taxes that went unpaid in 2012 until the end of the year. Originally companies were due to pay taxes for last year in May.

"The North said it will waive taxes to compensate losses," Kim said.

The Kaesong Industrial District Management Committee and the North's General Bureau for Central Guidance to the Development of the Special Zone will hold separate talks to resolve the issue of unpaid wages for North Korean laborers who worked several days in April before all operations came to a halt.

He said the two sides also adopted an affiliated agreement calling for the realization of a dispute arbitration panel that was never previously established despite existing provisions for such a mediation body. Kim said the Koreas concurred on easing access to the complex by introducing radio-frequency identification devices (RFID) within the year.

Even before the RFID system is set up the two sides will work together to make it easier for businessmen to move across the Demilitarized Zone that separates the two countries. At present, the North insists on vehicles forming caravans and strictly regulates the time when crossings can occur. Previously, failure to arrive in time for the crossing can mean being barred from going into Kaesong for three days.

"Using RFID tags can make it possible for people to travel to the North within a given day according to his or her schedule, and can greatly reduce administrative inconveniences," the top negotiator said.

The agreement also calls for holding an international investor relations session in October to highlight the merits of the Kaesong complex to potential foreign companies, and the establishment of a permanent secretariat by the end of the month.

Seoul and Pyongyang said they will continue discussions on allowing South Korean businessmen to use mobile phones and the Internet in the factory park as part of the broader effort to transform the mainly Korean economic zone into a true global manufacturing hub. Lack of Internet connectivity has been cited as a major drawback to Kaesong's growth.

The unification ministry official then said that while only a draft proposal was exchanged calling for adherence to rules governing the rights and safety of South Koreans at the industrial park, he claimed headway was made on this crucial issue. In the past, concerns have been raised about the North disregarding the rights of South Koreans accused of breaking its laws. Seoul has demanded notification of anyone detained and the right for South Korean officials to be present during questioning.

"This issue will be touched on in future talks (so an agreement can be reached)," he said.

The two countries said that another round of sub-committee sessions will be convened on Friday with the joint committee to meet for its third session on Monday to check development and set a timetable for pushing forward agreements reached.

Related to the agreements reached, the unification ministry pointed out that even in areas where there was no agreement, considerable progress was made to reduce the gap. It said that due to the progress made, remaining issues should be resolved at the sub-committee meetings scheduled for the end of the week so it can be confirmed at the next joint committee talks.

Sources said that with repairs underway, full electric power and other utilities should all come back online within the week so that companies can begin production.

Meanwhile, with the advent of the Kaesong agreement, attention has turned toward the resumption of tours to the Mount Kumgang resort, which have been suspended for more than five years. Tours were halted after a North Korean solider shot and killed a South Korean tourist in July 2008.


Unlike Kaesong, Seoul is remains cautious on the Mount Kumgang issue, with officials making clear that the North must give government-to-government guarantees that tourists will not be harmed in the future and Pyongyang must rescind its decision to confiscate South Korean property at the scenic resort.

Others said that while the shooting took place before Seoul implemented sweeping sanctions against the North for the sinking of one of its warships in March 2010, the two incidents are broadly linked.

Government officials added that United Nations sanctions following the North's third nuclear test that bars countries from providing "bulk cash" to the communist country could become an obstacle to normalization.

Despite such reservations, Pyongyang may opt to accept all demands raised by the South when the two sides meet on Oct. 2 to discuss the tour issue, North Korea analysts said.