Seoul sees no headway in foreign investment issue at Gaeseong talks

South and North Korea are unlikely to make headway in the issue of foreign investment in an inter-Korean factory park during their upcoming working-level talks on revising the rules on the zone, a Seoul official said Tuesday.

The source, who declined to be identified, said setting a new date for an investor relations (IR) event scheduled for Oct. 31 that was called off is not really on the agenda at talks slated for Wednesday and Thursday.

"It is not something that we expect to accomplish (this time)," he said.

The downbeat prediction comes as Seoul and Pyongyang agreed to hold three sub-panel meetings to discuss investment protection, internationalization and better protection for South Korean workers. Left off the agenda were the issues of improving travel, communications and customs at the Gaeseong Industrial Complex.

"Travel, communications and customs are critical if Gaeseong is to attract overseas investments," the official pointed out. At present, the North maintains close control on the movement of people and materials in and out of Gaeseong, as well as barring Internet connectivity and use of mobile phones.

Seoul has maintained that the North must resolve these issues first, in order for the factory park to become globally competitive.

The official, meanwhile, said authorities are trying to confirm the exact location of a special economic zone that the North said it will set up in the greater Gaeseong area.

There has been speculation that Middle Eastern and Chinese investors may be interested in the project, yet its exact location has not been reported. It could be built adjacent to the joint complex or in another part of the border town.

The special economic zone is one of 14 Pyongyang said it will build to bolster its weak economy.

The ministry official, meanwhile, confirmed that some companies have opted to give up workers assigned by the North because they don't have the necessary workload.

This corresponds with complaints that companies have not been able to secure orders from buyers who have been concerned by the souring of cross-border relations in the past couple of months.

At least three of the 123 South Korean companies said they want to sell their assets and pull out of Gaeseong, with others contemplating similar moves if things don't improve soon. (Yonhap News)