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NORTH KOREA NEWSLETTER NO. 96 (March 4, 2010)
*** INTER-KOREAN RELATIONS

S. Korea's Policy Effective in Pressing N. Korea into Talks: Official

SEOUL (Yonhap) -- A top South Korean official on relations with North Korea on Feb. 25 touted his government's tough approach toward the socialist neighbor, saying the policy has proven effective in pressing Pyongyang to open up for dialogue.

   North Korea has been making some conciliatory gestures toward the South after it drew tough U.N. sanctions for its May nuclear test. The sanctions are believed to have deepened the impoverished North's economic woes amid the lack of assistance from the South.

   "Basically, North Korea has shown some conciliatory moves since the latter half of last year, and it is seen as a response to our policy," Vice Unification Minister Hong Yang-ho said in a radio interview.

   Since taking office in February 2008, South Korean President Lee Myung-bak tied large-scale food assistance and economic aid projects to progress in international efforts to get Pyongyang to give up its nuclear programs.

   Hong said that the South would seek a summit with Pyongyang only if progress in denuclearizing North Korea were guaranteed through such dialogue.

   North Korea has yet to return to the six-nation nuclear talks, which also include the South, the U.S., Japan, Russia and China. The country says it will rejoin them if sanctions are lifted and negotiations for a peace treaty to formally end the Korean War are launched.

   Analysts differ on the effectiveness of South Korea's policy in bringing North Korea to the table, with some arguing Pyongyang is only trying to address its economic plight through talks. Others say it has realized its brinkmanship policy has failed.

   The Unification Ministry said later in the day that it convened a meeting of civilians and government officials to discuss revising 2007 policy plans on improving relations with the North.

   The plans were set up after the divided states held their second summit that year under the previous administration. Ministry officials declined to elaborate, but Minister Hyun In-taek said ahead of the discussions that there was consensus to revise the plans because the ongoing threat of North Korea's nuclear programs made it difficult to carry them out.

  
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South Korea's Trade with North Korea in the Red for 2nd Year

SEOUL (Yonhap) -- South Korea posted a trade deficit with North Korea in 2009 for the second consecutive year since the inauguration of the Lee Myung-bak government a year earlier, a government report showed on Feb. 25.

   According to the report by the Korea Customs Service, the South's trade deficit with the North rose more than four-fold to US$200.9 million in 2009, compared with $54 million in 2008.

   South Korea's trade with the North was in the black between 1998 and 2007, when the two countries tried to mend fences.
The South's exports to the North came to $732.6 million last year, down 17.1 percent from a year ago.

   South Korean electronics products topped the list of exports to North Korea in 2009, taking up 25 percent of its overall exports to the North. Electronics products were followed by staple fabrics with 14.4 percent and cotton textiles with 9 percent.

   Two-way trade reached $1.79 billion in 2007 and peaked at $1.82 billion the following year. But it fell slightly last year to $1.66 billion.

  
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Koreas Fail to Agree on Eased Restrictions on Joint Factory Park

SEOUL (Yonhap) -- Talks between the two Koreas ended on March 2 without an agreement on ways to ease the North's border regulations that have encumbered South Korean business operations at a joint industrial complex.

   The officials from the two sides met in the North Korean border town of Kaesong, where more than 110 South Korean firms employ some 42,000 North Korean workers to produce labor-intensive goods.

   South Korea demanded that the North lift its ban on the use of mobile phones and Internet lines by South Korean firms at the complex, chief South Korean delegate Lee Kang-woo told a press briefing.

   The South also demanded the North extend the hours that South Korean workers are allowed to access Kaesong and approve the use of electronic tags on goods moving in and out of the park, he said.

   North Korea responded by demanding that the South provide equipment to help carry out its side of the 2007 agreement in which they agreed in principle to ease the border restrictions, Lee said.

   "The two sides used today's meeting as an opportunity to share their opinions on ways to ease the restrictions," he said, adding the sides will later set a date for further talks.

   The talks on the complex have been seen here as a sign that Pyongyang is relaxing its attitude toward Seoul after two years of mostly frozen ties between the two countries.

   But the impoverished North has stressed in previous meetings that wage hikes for its workers should be addressed, while the South says the profitability of the park should improve first. The Kaesong park, which began operating in 2004, was born out of the first inter-Korean summit four years earlier.
The latest meeting came amid tension after North Korea threatened last month to attack South Korea and the U.S. should the allies go ahead with their joint military drill, set to begin next week.

   South Korea and the U.S. say the annual Key Resolve and Foal Eagle exercise is purely defensive, but Pyongyang renewed its warning Tuesday that it is a precursor to invasion and would scuttle efforts to denuclearize the Korean Peninsula.

   Tension already ran high off the west coast close to Kaesong after the isolated North lobbed hundreds of artillery shells along its Yellow Sea border with South Korea in late January.

   The two Koreas remain technically in a state of war since the Korean War ended in a truce, not a peace treaty.

  (END)