N. Korea, Hyundai agree to resumption of inter-Korean business projects: KCNA

(ATTN: RECASTS headline, lead; UPDATES with more background, details in paras 5-7,
Seoul official's reaction, experts' views at bottom; CHANGES spelling of Hyundai
chairwoman to Hyun Jeong-eun)
SEOUL, Aug. 17 (Yonhap) -- North Korea and South Korea's Hyundai Group on Monday
agreed to resume their inter-Korean tourism projects and facilitate operation of
the joint industrial park in the North's border town of Kaesong, the North's
media said.
In a joint press release issued by Hyundai and the North's Korea Asia-Pacific
Peace Committee, which handles inter-Korean business ties, the sides also
"decided to arrange the reunions of separated families and relatives from the
North and South in Mount Kumgang on the day of Chuseok (Korean thanksgiving) this
year."
The agreement comes one day after North Korean leader Kim Jong-il met with
Hyundai chairwoman Hyun Jeong-eun in Pyongyang in another gesture of
rapprochement between the North and the outside world after his meeting with
former U.S. President Bill Clinton earlier this month.
The South Korean government suspended Hyundai's major tour program to Mount
Kumgang in North Korea's east coast last year after a North Korean soldier shot
dead a South Korean tourist who allegedly strayed into an off-limits military
zone.
North Korea has rejected an on-site investigation into the shooting death in the
North's eastern Mount Kumgang resort. South Korea subsequently suspended the tour
program indefinitely, rapidly sending Inter-Korean relations into a downward
spiral.
A separate Hyundai tour program to Kaesong was shut down by North Korea in
December of last year in retaliation against the South's hard-line posture.
The relations of the two Koreas have been virtually severed since President Lee
Myung-bak took office in February last year with a vow to link cross-border
rapprochement with North Korean denuclearization efforts.
"Both sides decided to resume the suspended tours to Mount Kumgang as soon as
possible and launch the tour of Pirobong, the highest peak on the mountain," the
release said. "Both also agreed to resume tours of Kaesong soon and to energize
the operations of the Kaesong Industrial Zone as the land passage through the MDL
(Military Demarcation Line) is put back on a normal basis."
The release also noted the possible launch of another tour project to the North's
Mount Paekdu, the highest peak on the Korean Peninsula, "in accordance with the
progress of its (Hyundai's) preparations."
To facilitate operations of the tour and the industrial park projects, the North
agreed to "restore land passage of the South side's personnel through the
Military Demarcation Line and their stay in the north side's area as they were
according to the spirit of the historic October 4 Declaration."
The October agreement was signed in 2007 between the two Koreas during the
administration of the South's late former President Roh Moo-hyun to foster
inter-Korean cooperation. It followed an earlier June 15 Joint Declaration signed
in 2000 between the North and Roh's predecessor, Kim Dae-jung.
"Both sides expressed willingness to improve north-south relations and further
develop cooperation for the common prosperity of the nation under the historic
June 15 joint declaration and the October 4 declaration," the release said.
South Korean officials, however, seemed to have been caught off guard by the
surprise announcement, saying that consultation with Seoul officials hadn't taken
place prior to the agreement between the private company and North Korea.
"The government has not been consulted over this issue. The government has to
review the agreement and its position will be announced by the Unification
Ministry," a senior government official said, requesting anonymity.
The official said that the government and relevant parties must review the
conditions for resuming tour programs to Kumgang, adding that the government will
engage in talks that are based on principled positions and flexibility.
Hyun was scheduled to return to the South at around 2 p.m. and issue a brief
press statement at the border.
Despite the lack of prior consultations, experts say that South Korea will
ultimately consent to the agreement and use it to lure North Korea back to
high-level inter-Korean talks.
"The government won't be able to flip the agreement and I believe prior
communication between Hyundai and the government was likely. South Korea will
likely try to bring North Korea back into high-level meetings," said Kim
Young-hyun, a professor of North Korean studies at Dongguk University.
Cho Myung-chul, researcher at the Korea Institute for International Economic
Policy, saw North Korea's move as laying preparatory groundwork for the
normalizing of ties with the U.S., given Washington's traditionally close
relationship with Seoul.
"Recent developments suggest that North Korea has the intent to improve their
relationship with the U.S. The North Korea-U.S. relationship cannot move forward
given the current chilly state of North-South relations," said Cho.
odissy@yna.co.kr
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