Koreas fail to agree on steps to improve joint factory park

(ATTN: UPDATES throughout)
SEOUL, Feb. 1 (Yonhap) -- The two Koreas failed Monday to agree on steps to boost
their joint industrial park, an official here said, amid tension raised by days
of artillery fire last week by the communist state.
The South Korean delegation protested the shelling during the talks in the North
Korean border town of Kaesong, Unification Ministry spokesman Chun Hae-sung told
reporters. The North Korean side retorted, saying it was "a due military drill,"
he said.
North Korea fired hundreds of artillery shells into its waters along the western
sea border, called the Northern Limit Line (NLL), with South Korea for three
days last week, prompting the South to respond with warning shots on the first
day.
North Korea refuses to honor the NLL that has served as the de facto maritime
border between the two Koreas. It was drawn by a U.S. commander of the U.N.
forces, which fought on the South Korean side in the Korean War, at the end of
the three-year conflict.
Further raising tension, North Korea declared five additional maritime areas off
the country's east and west coasts as "no-sail" zones over the weekend, South
Korean military sources said earlier in the day.
This week's talks in Kaesong were the second this year focusing on ways to boost
the profitability of the park, the most tangible symbol of reconciliation efforts
made in the first inter-Korean summit in 2000. Some 110 South Korean
manufacturers employ about 42,000 North Korean workers at the complex to produce
labor-intensive products.
The sides met for three days in Kaesong last month but failed to reach an
agreement on mutual objectives, as the South refused to accept North Korea's
demand that pay raises be discussed during the meetings.
Chun said the South Korean delegation pressed the North to sideline the issue and
first discuss border restrictions that have slowed South Korean transportation
and communications in and out of the complex.
The South Korean delegation, led by Kim Young-tak, also pushed the North to focus
on the planned construction of a facility to house North Korean workers, a move
that Seoul says would help boost productivity at the factory park, he said.
"It is our stance that without these issues first being resolved, productivity at
the park cannot improve, and pay raises cannot be negotiated," Chun said.
The industrial park, which began operating in 2004 and exported nearly US$10
million between 2005 and 2008, came under scrutiny last year as inter-Korean ties
fell to their lowest level in recent years.
In a reversal of its stance toward Seoul, however, Pyongyang has in recent months
proposed talks aimed at improving cross-border relations. In December, delegates
from the two sides participated in a joint survey of industrial parks in China
and Vietnam, which led to the Jan. 19-21 talks that served as a follow-up to the
trip.
Analysts say the North Korean offer of talks is part of a peace offensive aimed
at raising the standard of living for North Koreans and achieving its goal of
becoming a "strong and prosperous nation" by 2012.
The smoothing of relations with the outside world, which would pave the way for
foreign investment and trade, is also key for the North to attain that goal, they
say.
North Korea, which drew harsh U.N. sanctions for its nuclear test last year, also
seeks to return to six-nation talks that could bring economic and political
compensation for progress in its denuclearization. But it has insisted the
sanctions first be lifted and that talks aimed at formally ending the Korean War
be launched.
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