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(LEAD) S. Korea voices hope for reasonable outcome at Kaesong talks

All Headlines 16:07 August 09, 2013

(ATTN: RECASTS lead; UPDATES with more details throughout)

SEOUL, Aug. 9 (Yonhap) -- The future of a troubled joint inter-Korean factory zone in North Korea will hinge on whether the communist North accepts its responsibility over the current work stoppage and promises never to close it again, a Seoul official said Friday.

After failing to reach agreement on the issue in six rounds of talks, the two Koreas earlier this week agreed to hold a fresh round on Wednesday, raising hope that a breakthrough can be made this time.

South Korean officials said they are more hopeful than before that the negotiations would be successful, but they also voiced caution against optimism.

"Seoul hopes that the talks (will) lead to a reasonable plan that can fuel growth of the Kaesong Industrial Complex," said Unification Ministry spokesman Kim Hyung-suk. "South Korea will focus on securing a guarantee that could help normalize the industrial complex in a progressive way in accordance with common sense and norms."

The two Koreas have been unable to resolve their differences as both sides had insisted on their own terms to resuming the joint complex. South Korea has demanded solid assurances that North Korea will not unilaterally stop operations there, while the North instead urged for an immediate resumption of operations.

As the talks stalled over the issue, the North this week offered talks, saying the complex should not be closed down for political reasons and not outright blaming the South for the shutdown, a stance seen by some as a step forward.

Seoul has made clear that the North must show sincerity in trying to resolve the impasse surrounding Kaesong and proposed final talks to show that it has changed its stance on the safeguards issue, he said.

Kim, however, declined to say whether the upcoming talks will be the final meeting between the two countries on the factory zone, which was created as a result of a historic 2000 summit between South and North Korea.

South Korea has demanded Pyongyang take responsibility for the shutdown and called for solid guarantees to make certain that another work stoppage does not occur in the future.

The North, meanwhile, had called for an immediate reopening of the factory park and skirted responsibility for its decision to pull its workers from the zone in April that effectively halted operations at Kaesong.

The communist country has so far said it can close down the complex again if Seoul engages in political and military provocations that occurred in March and April of this year, apparently referring to the U.S.-involved South Korean military drills.

Another joint annual military drills by the U.S. and South Korea are scheduled to take place this month starting Aug. 19.

The ministry spokesman said that Seoul's position has always been to separate Kaesong from political and military developments on the Korean Peninsula.

The ministry cautioned that despite some upbeat predictions that an agreement can be reached, there are many pitfalls that must be resolved first.

"The North did not mention South Korea's political and military actions that it claimed triggered the current work stoppage when it requested talks this time around," said an official source, who declined to be identified, adding that this may not be the case when talks actually begin.

He pointed out that there is still a danger of the talks stalling since there remains skepticism over whether the North is sincere in its latest offer.

"Pyongyang may have taken a step forward, yet there is skepticism over the outcome of the talks, especially since the government is interested in content and not empty words," the source said.

Highlighting the precarious nature of the talks, the unification ministry belatedly disclosed that the North has asked the South not to "pour cold water" on their generosity and broad-minded offer of talks with words. The warning that was sent late Thursday was part of the broader message showing that Pyongyang wanted upcoming talks to bear fruit.

"Seoul sent its own message past noon today cautioning the North to refrain from making remarks that are not in accordance with showing mutual respect," the ministry source said.

He said the North's warning did not say why they took offense, but hinted it may be due to media reports that proclaimed the upcoming talks were a result of Seoul's firm adherence to principle and threat of permanent closure of Kaesong, which some said provided much needed cash to the North.

The North's about-face on talks, meanwhile, came shortly after South Korea announced its plans to begin insurance payments to the South Korean companies in Kaesong for their losses incurred, a move seen as presaging a permanent closure of the complex. Seoul earlier in the week approved payments of 280.9 billion won (US$252.3 million) in insurance to Kaesong companies.

A total of 109 companies had initially asked for coverage under the special inter-Korean insurance policy.

After the North's announcement, however, all but four firms decided to take a wait-and-see approach until the planned talks take place, with three more companies saying that they're still inclined toward collecting the insurance.

The four firms will receive a combined 17.7 billion won in insurance payments.

Once the payment is made, the government will acquire subrogation rights to control factories and assets in Kaesong.

The insurance payment has been viewed by many as the first step by Seoul to implement grave measures against Kaesong that can eventually result in the permanent closure of the industrial park, the last remaining symbol of inter-Korean rapprochement.


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