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N. Korea, S. Korea agree to hold final talks on industrial complex

An undated file picture released on 06 December 2011 shows a general view of the Kaesong Industrial Complex in the North Korean border town of Kaesong. (YONHAP/EPA)

After weeks of fruitless negotiations, North and South Korea agreed Wednesday to hold one more round of talks next week in a last-ditch effort to reopen the jointly run Kaesong Industrial Complex on their border.

The agreement came after the North, breaking nine days of silence, consented to the South’s standing offer for “final talks” on the complex. Pyongyang proposed that talks be held Aug. 14, and the South accepted almost immediately.

But analysts say major obstacles remain, noting that two months of on-and-off sit-downs — some of which stretched well past midnight — have done little to thaw relations. In the most recent session, on July 25, officials briefly scuffled as the North Koreans tried to enter a press room to read a statement about the floundering talks.

When the Kaesong facility opened in 2004, it was a touchstone and symbol of Korean cooperation, pairing small- and medium-size South Korean businesses with cheap North Korean labor. But the complex was shut down four months ago during a period of heightened tensions, with the North pulling out its 53,000 workers and banning South Koreans from entering.

Tensions have since abated, but negotiators from Seoul and Pyongyang remain at odds over what must happen before Kaesong can reopen. South Korean officials say they want a guarantee that the North won’t again shut down the facility unilaterally.

The North, however, has “refused to make even the basic promises and implied that it can suspend the [Kaesong] operation over political and military issues,” the South’s Unification Ministry said in a statement July 28.

On Wednesday, the North did try to assuage a few of the South’s concerns, pledging to send its own workers back to Kaesong and to allow South Koreans safe access to the facility.

The 123 South Korean companies operating at Kaesong have lost more than $900 million because of the closure, according to South Korea’s Yonhap News Agency. On Wednesday, before the agreement to resume discussions was reached, the South approved insurance payouts to companies at Kaesong and those that provide services to them.

Chico Harlan covers personal economics as part of The Post's financial team.



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