In Tensions Thaw, Koreas Agree to Reopen Industrial Park

Wednesday, 11 Sep 2013 03:07 AM

 

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SEOUL, South Korea — North and South Korea agreed to reopen their jointly run industrial complex next week, the latest step in reducing tensions between the two countries that flared after a nuclear test by the North earlier this year.

The accord on a time-line to open Kaeseong by Sept. 16 will end a near six-month shutdown caused by Kim Jong Un’s regime pulling out its 53,000 workers as relations soured between the two countries. North Korea also agreed to exempt South Korean companies at Kaeseong from taxes this year. Shares of Korean companies operating at Kaeseong gained.

“Both sides’ determination to restore Kaeseong through dialog contributed to this agreement,” Yang Moo Jin, a professor at the University of North Korean Studies in Seoul, said by phone. “This is a positive signal for President Park Geun Hye’s fledgling North Korea policy.”

Kaeseong, located north of the fortified border that divides the two countries, provides cheap labor for 120 South Korean companies producing at the site and is a source of hard currency for the North.

The Kim regime shuttered the park after the United Nations tightened sanctions against the country in response to North Korea’s third nuclear test in February, followed by threats of a preemptive attack against the South and the United States.

Kaeseong represented the only vestige of cooperation between the countries before the shutdown. Since the preliminary accord on Aug. 14 to reopen the site, the two Koreas have also agreed to resume reunions of families separated by the Korean War and restarted a military hot-line to improve communication.

Later Wednesday, the North may allow the South Korean flag to be hoisted and the national anthem played for the first time in Pyongyang at the opening ceremony of an Asian weightlifting competition that the South is joining.

As part of Wednesday’s accord, the two Koreas also agreed to hold a business fair at Kaeseong next month in an effort to draw foreign investment, according to South’s Unification Ministry.

“I doubt it’ll be successful because foreign companies won’t feel comfortable moving operations to Kaeseong at a time North Korea is under sanctions,” Yang said.

Glyn Davies, the top U.S. envoy for North Korea, told reporters in South Korea Tuesday the United States ruled out the possibility of a quick resumption of six-nation talks offering the North aid in return for giving up its nuclear ambitions unless Kim Jong Un’s regime halts its nuclear weapons program.

© Copyright 2014 Bloomberg News. All rights reserved.

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