Koreas agree in principle to normalize suspended

South and North Korea agreed in principle to normalize operations at the inter-Korean industrial complex that has been idle for nearly three months, helping to keep alive the only viable economic link between the two countries, the government said Sunday.

Seoul's Ministry of Unification said after 16 hours of negotiation, the two sides were able to find middle ground on various outstanding issues.

The talks followed months of high tensions jacked up by the North's third atomic weapons test in February and its threats of launching nuclear attacks against South Korea and Washington. The industrial complex subsequently came to a halt in early April, becoming a prominent casualty of the spike in tension on the Korean Peninsula.

It said under the agreement signed at 4:05 a.m., inspections of manufacturing facilities will be carried out at the Kaesong Industrial Complex starting on Wednesday. South Korean businessmen with factories in the North Korean border town will carry out the

inspections with the help of engineers.

The ministry said Pyongyang agreed to discuss ways to implement safeguards to prevent another shutdown of the industrial park in the future. This meeting is scheduled to take place in Kaesong on the same day the facility inspections kickoff.

Seoul said from the outset, that normalization must be contingent on the North pledging not to unilaterally disrupt operations at the complex again, and the introduction of international standards of doing business.

The two sides, moreover, concurred on allowing South Korean businessmen to collect finished goods and raw materials needed to make products from the border town, with the North agreeing to extend safe passage over the demilitarized zone for South Korean personnel.

The agreement comes after marathon talks conducted at Tongilgak, in the North Korean-controlled part of the joint security area. Earlier in the talks, negotiations made little headway due to very different priorities expressed by the two countries. Such developments caused some to worry that negotiations will fall through.

South Korea made clear Pyongyang must take responsibility for the disruption in operations and guarantee such problems will not be repeated. It also wanted the right to permit the retrieval of finished goods from Kaesong that can alleviate the plight of local companies, which have been hit hard by the work stoppage.

North Korea, on the other hand, wanted operations to resume as soon as possible at the complex that was created as a result of the historic 2000 summit meeting between the leaders of the two Koreas.

Related to the talks itself, Suh Ho, director of the unification ministry's exchange and cooperation bureau, told reporters the North showed considerable aggressiveness in trying to iron out differences.

"I received the impression that they were committed to tackling the issue," the chief delegate to the working-level talks said. He said that while the South Korean delegates brought up the issue of fingering who was to blame for the work stoppage, his counterparts did not share the same view.

Suh added that the checkup of facilities and retrieval of finished goods and other manufacturing materials needed to be seen as one package, with the normalization of Kaesong being an entirely different issue.

"While the agreement reached is vague and broad on the safeguard issue, Seoul is determined to touch on this issue in the next meeting set for Kaesong," he said, pointing out that in some areas negotiators left the agenda open for future talks, because they didn't have time at the Panmunjom meeting. The official emphasized that "constructive development" of the complex is needed to ensure Kaesong long-term health.

The official, moreover, said that the South will comment on the need to ensure better protection for personnel, property and movement to and from Kaesong at the upcoming meeting.

South Korean presidential office Cheong Wa Dae on Sunday said it was a "significant development" that the Koreas finally had talks over Kaesong.

"There has been a preliminary agreement between the Koreas for the positive normalization (of the industrial park)," a Cheong Wa Dae official told reporters. "(The suspension of the Kaesong

complex) should never have happened in the first place, but the two sides have made some progress in their efforts to resolve the issue."

The South's two major political parties also welcomed the inter-Korean agreement. The ruling Saenuri Party lauded the two Koreas' determination to resolve the Kaesong problem and urged both sides to honor the terms of their agreement.

The main opposition Democratic Party said the two Koreas have taken an important first step toward the normalization of the Kaesong complex and of the inter-Korean ties, and called for further talks and exchange between the countries.

The start of the talks, meanwhile, were delayed for nearly two hours as telephone lines to the South needed repairs.

The meeting came after North Korea sent invitations to South Korean businessmen with factories in Kaesong, assuring them of safe passage to the border city.

The South countered this move by calling for government-to-government negotiations, while putting off allowing visits by businessmen until after officials hold talks.

North Korean watchers said that the understanding reached has kept alive hope for the complex. where operations came to a screeching halt on April 9. Pyongyang citing provocations by the South pulled out its 53,000 workers from the 123 South Korean plants at the complex. South Korea responded by subsequently withdrew its own manpower. 

"There has been mounting concerns that time was running out with the onset of monsoon rains that could damage production facilities and raw materials left behind at the plant," a researcher for a state-run think tank said. He pointed out that if proper maintenance is not carried out on some machinery, such assets may have to be replaced, which could incur serious losses from Kaesong companies.

Companies claimed losses amounting to 1.05 trillion won

(US$919.4 million), although the government said that actually losses hovered at around 706.7 billion won. (Yonhap News)