S. Korea keeps trying to hold talks with N. Korea on troubled joint venture

(ATTN: UPDATES throughout with S. Korean government's move, opposition party's
position, expert's comments, U.S. stance, other details)
SEOUL, May 16 (Yonhap) -- South Korea will continue efforts to hold talks with
North Korea on the fate of their troubled joint industrial complex despite
Pyongyang's unilateral nullification of all existing wage and rent contracts,
officials here said Saturday.
"Given the analysis of the contents of North Korea's letter (to the South) and
attitude, North Korea seems to be moving to shut down the Kaesong industrial
zone, but not immediately," a government official said. "Accordingly, the
government will first make utmost efforts to resume talks on it."
The unpredictable communist nation announced Friday it was invalidating contracts
with South Korea on the operation of the joint venture. Opened in 2005 as a
symbol of reconciliation and funded by Seoul, the complex located in a North
Korean town just north of the heavily fortified border now faces its biggest
crisis yet.
More than 38,000 North Koreans work at Kaesong for 101 South Korean firms,
producing items such as garments, kitchenware and watches at the complex that
combines the capitalist South's technology with the North's cheap land and
labor.
The North said it can no longer provide South Korean firms with "preferential
treatment," claiming the conservative South Korean government pursues a
confrontational policy toward Pyongyang.
Pyongyang said new laws and regulations will be established for the operation of
the complex, adding South Korean companies may leave the area if they do not
accept the changes.
The surprise announcement came as South Korea was struggling to set a date for
another formal meeting with the North following their first government-level
talks in more than a year on April 21, at which the North demanded land-use fees
and wage hikes for its workers at the Kaesong complex.
South Korea proposed that the follow-up meeting be held next Monday, saying
agenda items should include the fate of a South Korean manager detained by North
Korea for nearly seven weeks on charges of denouncing the North's political
system and trying to persuade a local worker to defect. The North refuses to
discuss the issue, while the South says it is a matter fundamental to the
operation of the industrial town.
A South Korean official said the offer for talks next week is still valid, adding
that although "for now, we can't be optimistic that North Korea will respond to
talks on May 18," the possibility that it will respond cannot be ruled out.
He pointed out that North Korea is still allowing South Koreans to visit Kaesong.
"Today, 212 South Koreans crossed the border to visit Kaesong on Saturday as
scheduled," he said. "A total of 593 people are scheduled to return to the South
later today."
South Korea's main opposition party said Saturday the conservative Lee Myung-bak
administration is to blame for the crisis at Kaesong, into which the Seoul
government and South Korean businesses have invested 730 billion won (548 million
dollars) since construction began in 2002.
"The Kaesong industrial complex is in peril due to the government's North Korea
policy that lacks principles and philosophy," Democratic Party spokesperson Kim
Yoo-jung said. "The government and the ruling party should map out measures to
maintain the complex, which is the last bastion of inter-Korean reconciliation,
instead of focusing on criticizing North Korea's step."
The government should resume talks with the North through the implementation of
the two inter-Korean summit deals signed by its liberal predecessors, Kim added.
After a decade-long reconciliatory mood, inter-Korean relations chilled when Lee
took office early last year seeking a more reciprocal relationship with the
North. Lee said he will implement the summit deals on expanding the two Koreas'
economic cooperation in tandem with progress to denuclearize the communist
neighbor.
The U.S. said the North's abrupt action is "unhelpful."
"We have seen reports that North Korea may cancel the contracts at the Kaesong
industrial complex," State Department spokesman Ian Kelly said at a regular press
briefing in Washington. "Such a precipitous action by North Korea would be
unhelpful and a step in the wrong direction. The U.S. supports dialogue between
North Korea and South Korea, which is in the interests of all concerned."
Many experts say the cash-strapped North is unlikely to immediately shutter the
facilities.
"Based on the pattern of the most recent North Korean moves, North Korea had an
opportunity to shut down Kaesong, but they didn't," John S. Park, researcher at
the U.S. Institute of Peace said on Radio Free Asia, a Washington-based radio
station.
The North appears to be seeking to gain more cash through pressure on the South,
he added.
(END)