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North, South Korea agree to re-open joint industrial park

North and South Korea reached an agreement Wednesday to re-open the Kaesong joint industrial zone — closed by Pyongyang in April at the height of soaring military tensions.

The five-point agreement that came out of a seventh round of talks committed both sides to making “active efforts” to resuming normal operations as soon as possible after inspecting the shuttered plants in Kaesong.

A joint committee will be set up to discuss compensation for economic losses suffered as a result of the complex’s closure, according to a copy of the accord released to reporters.

The agreement will help lower tensions ahead of the launch of joint South Korea-US military exercises on Monday which the North had warned could bring the divided peninsula “to the brink of war”.

Established in 2004 as a rare symbol of inter-Korean cooperation, Kaesong was a key hard-currency earner for the North and the decision to shut it down took many observers by surprise.

The project had managed to ride out previous North-South crises without serious disruption, but it eventually fell victim to an extended period of heightened tension following the North’s third nuclear test in February.

Pyongyang initially barred access to the park, which lies 10 kilometers (six miles) inside the North Korean border and then withdrew its 53,000-strong workforce from the 123 South Korean firms based there.

The previous six rounds of talks had foundered on the South’s insistence that North Korea provide a binding guarantee that it would not close the complex again.

Wednesday’s agreement suggested a compromise had been reached where the North accepted the worker pullout had closed Kaesong, while both sides promised to ensure it remained open in the future.

“The South and the North will prevent the current suspension of the Kaesong industrial complex caused by the workers’ withdrawal from being repeated again,” the agreement said.

It also included a pledge to promote foreign investment in Kaesong — a key South Korean demand.

The North had proposed the seventh round of talks last week, just hours after Seoul announced it was going to start compensation payments totalling $250 million to businesses impacted by Kaesong’s closure.

The payout move was widely seen as the first step towards a permanent withdrawal from the zone.

Wednesday’s accord was immediately welcomed by the South Korean company owners who had complained that both Seoul and Pyongyang were using their livelihoods as a political football.

“We will do our best to help the Kaesong industrial park boost its international competitiveness and become a globally viable place for investment,” the association representing the owners said in a statement.

Monday’s annual South Korea-US drill, dubbed “Ulchi Freedom Guardian”, involves about 50,000 South Korean and 30,000 US troops practising a North Korean invasion scenario.

Although largely computer-simulated, it is viewed as highly provocative by North Korea, which has already issued dire warnings of its impact on stability on the peninsula.

“If the drill takes place, conditions in the region will become unpredictable and escalate to the brink of war,” the North’s ruling-party newspaper Rodong Sinmun said last month.

The North had cited similar joint exercises earlier this year as the main trigger for Kaesong’s closure. AFP


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