Bloomberg News

South Korea Agrees to North Offer for Talks on Shut Complex (3)

June 06, 2013

North Korea Proposes Talks With South on Closed Industrial Park

The road connecting Gaeseong Industrial Complex with South Korea's customs, immigration, quarantine office is seen in Paju, South Korea. Photographer: Chung Sung-Jun/Getty Images

North and South Korea agreed to hold negotiations on reopening a jointly run industrial park, in what will be their first government-level talks since the complex was shut in April.

After North Korea made the overture, South Korea Unification Minister Ryoo Kihl Jae proposed holding the talks June 12 in Seoul and asked the North to restore a border hotline it cut in March. The agreement, a day before President Barack Obama meets with Chinese President Xi Jinping, follows prodding by China for the North to resume disarmament talks.

“We hope this can be an opportunity to build trust between the North and the South,” the Unification Ministry said in a text message. The South made its own proposal in April that was rejected.

The offer is the biggest concession from Kim Jong Un’s regime since its rocket launch in December and nuclear test in February set off a succession of United Nations sanctions and threats of nuclear war. The closing of the Gaeseong industrial park deprived the impoverished state of a source of much-needed hard currency.

“North Korea has made this conciliatory gesture earlier than expected, and it seems that they are more desperate to boost the economy than anticipated,” said Jo Dong Ho, North Korean Studies professor at Ewha Womans University.

‘No Choice’

China, North Korea’s biggest ally and benefactor, has pushed the totalitarian state to resume nuclear disarmament talks, leaving it “no choice but to cooperate with the South to get the economy going,” Jo said by phone.

In a speech today, South Korean President Park Geun Hye called on Kim’s regime to abandon its isolationist path, work to build trust with the South and become a “responsible member” of the international community.

North Korea’s overture was characterized as a “bold decision and sincere proposal,” by the official Korean Central News Agency, which quoted an unidentified spokesman for the Committee for the Peaceful Reunification of Korea. Reuniting families on both sides of the border can be discussed as well, KCNA said.

The North proposed including discussions on re-opening North Korea’s Mount Geumgang luxury resort, which was closed in 2008 after soldiers killed a South Korean guest.

Obama Meeting

Xi and Obama meet tomorrow in California, their first summit since the Chinese leader took office in March. Obama has urged China to use its influence to get North Korea to abandon its atomic weapons program, and Xi last month told an envoy of Kim’s to return to the negotiating table. General Choe Ryong Hae told Xi his country wants to resolve its conflicts via talks.

“The scheduled meeting of Obama and Xi Jinping is an important fact in understanding this gesture,” said Kim Yong Hyun, a Seoul-based professor of North Korean Studies at Dongguk University. “It once again shows that China is our key when it comes to North Korea strategies.”

China Foreign Ministry spokesman Hong Lei told reporters in Beijing today that the government was optimistic that “the relevant parties can cherish this change that has not come easy.”

“China expresses happiness and welcome to this development,” Hong said.

At the same time, the agreement contains no mention of nuclear issues, which benefits North Korea, analyst Francois Godement said.

Main Issue

“We can see tension going down but without any sign of the main issue being discussed again,” Godement, a senior policy fellow at the European Council on Foreign Relations in Paris, said by phone. “Clearly there is a bonus for North Korea in this.”

North Korea suspended operations indefinitely at the Gaeseong complex April 8, a month after threatening preemptive nuclear strikes in response to U.S.-South Korea military drills.

The complex employed more than 53,000 North Koreans working for 123 South Korean companies. Production has generated $100 million in annual profits for North Korea and four times that for the South, according to Yang Moo Jin, a professor at the University of North Korean Studies in Seoul.

Kim’s regime last month proposed that South Korea businessmen visit Gaeseong for discussions while rejecting government-level talks.

To contact the reporter on this story: Cynthia Kim in Seoul at ckim170@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net


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