North and South Korea 'agree Kaesong talks'

Empty gates for North Korea's Kaesong city are seen at the customs, immigration and quarantine office near the border village of Panmunjom, that separates the two Koreas, 3 May 2013 Kaesong, which opened a decade ago, is seen as a symbol of inter-Korean co-operation

The two Koreas appear set to hold talks on a jointly-run industrial zone, weeks after operations were suspended there.

North Korea proposed talks with Seoul in a statement early on Thursday carried by state news agency KCNA.

South Korea's Unification Ministry said it "positively views" the proposal, which follows months of high tension on the peninsula.

The Kaesong industrial zone, just inside North Korea, is a key source of revenue for Pyongyang.

But North Korea pulled out its workers in early April as its relations with the South - and regional neighbours - deteriorated in the wake of its 12 February nuclear test.

Since then operations at the zone, where more than 120 South Korean manufacturers employ some 53,000 North Korea workers, have been fully halted for the first time since the project began a decade ago.

North Korea said late last month it would invite South Korean businessmen back to discuss the resumption of operations but Seoul ruled that out, saying working-level government talks should be held.

'Normalisation'

The KCNA statement, attributed to the Committee for the Peaceful Reunification of Korea, said that hotlines cut during the period of high tension would be reconnected if South Korea agreed to the talks.

Kaesong Industrial Zone

  • Launched in 2003, largely financed by the South to increase co-operation
  • More than 120 factories employ North Koreans in manufacturing industries, with goods exported to the South
  • Complex as a whole produced $470m worth of goods in 2012 - the biggest contributor to inter-Korean trade
  • South Korean companies pay more than $80m a year in wages to North Korean workers

"We propose holding talks between authorities of the North and the South for the normalisation of the operation in the KIZ [Kaesong Industrial Zone] and the resumption of tour of Mt Kumgang," it said.

The Mount Kumgang resort is a joint tourism project that has been suspended since a South Korean tourist was shot dead there by a North Korean guard in 2008. North Korea has since seized assets of the resort's South Korean operator.

Restarting reunions of separated families could also be discussed, the North Korea statement said, adding: "The venue of the talks and the date for their opening can be set to the convenience of the South side."

South Korea appeared to welcome the move, saying it "positively views North Korea's proposal".

"We hope that South and North Korea can build trust through this opportunity," the Unification Ministry said, adding that the agenda and schedule would be announced after discussions.

Deciding on the agenda could present hurdles, observers cautioned.

It follows several months of threats and rhetoric from the communist North.

Apparently angered by the US sanctions imposed after its third nuclear test and annual South Korea-US military drills, it warned of attacks on regional targets and cut key economic and communications links with Seoul.

In recent weeks, however, tensions appear to have lessened somewhat. Late last month, North Korea sent an envoy to Beijing - seen as having the greatest degree of influence on Pyongyang - for talks, for the first time since its nuclear test.

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