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North and South Korea reopen Kaesong industrial zone

After five months closed, the Kaesong factory complex shared by North and South Korea resumed operations on Monday.

Kaesong reopened 16 9 2013Enlarge
(Chung Sung-Jun/AFP/Getty Images)

SEOUL — An inter-Korean factory zone in North Korea began its trial-run production on Monday after a five-month hiatus, as the two Koreas discuss ways to ensure sustainable growth of the joint economic venture.

More than half of the 123 South Korean firms with factories at the Kaesong Industrial Complex in the North's eponymous city were set to start trial operations, with the aim of fully normalizing operations thereafter, and have asked North Korean workers to report to work, the Unification Ministry said.

The ministry and officials at the Customs, Immigration and Quarantine office in Paju, some 50 kilometers northwest of Seoul, said 821 South Korean managers and workers had plans to cross over the border into Kaesong during the day, with more than 400 to stay overnight to oversee production normalize there.

Most companies were set to start up their machinery in earnest in the afternoon while they cleaned and prepared the factories for the eventual normalization of operations there, the ministry said.

The resumption came after Seoul and Pyongyang agreed last Tuesday to begin operations after talks made headway on setting up safeguards to ensure that the complex will not be shut down again due to non-economic reasons.

All operations at Kaesong, which first began production in late 2004, came to a screeching halt on April 9, when the North pulled out all of its 53,000 workers from the park at the height of political and military tension on the Korean Peninsula.

As part of the agreement reached last week to ease travel to and from the complex, the North has agreed to allow a set number of crossings — 11 separate crossings into Kaesong and 10 exits during the day — although the actual number of entries may be smaller as many are expected to travel during certain preferred time slots.

Travel restrictions to and from the park have been a source of inconvenience in the past since most entries into the North Korean border town took place in the morning at a handful of pre-set hours, with those unable to keep the appointed time being turned back and told to return another day.

On the reopening of the complex, businessmen said they were relieved that cross-border talks in the past few months have reached a breakthrough in resolving differences. Some have said they are ready to start making products immediately and will only take one day off during the upcoming three-day Chuseok, or Thanksgiving, holidays, while others said they need to make repairs to equipment that have not been used for some time and need to secure new orders from buyers.

Kang Tae-hwan, an executive for an optical cable manufacturer, speculated that for his company, full production won't start until October at the earliest.

In addition to the reopening of the industrial park, the two sides began the third round of joint management committee negotiations with the aim of enhancing the rights of South Korean workers at Kaesong.

The committee gives Seoul equal say in the running of the complex that in the past was effectively run by Pyongyang.

Seoul has insisted that workers who are accused of violating rules and held by North Korean authorities be allowed to receive counsel from South Korean officials, stating that such a move is part of the critical progressive development process of building trust and ensuring sustainable operations at Kaesong.

The North has so far been slow to respond to the request and sign an affiliated agreement that would bind the communist country to respect the rights of South Koreans.

"All sides agree on the overall need to provide legal counsel and advice to offenders, but there are still working-level details that need to be worked out," a ministry official who declined to be identified said after the first round of talks were concluded in the morning.

The two sides also plan to continue talks on advancing communication links such as Internet connectivity and mobile phone use between Kaesong and South Korea, and adopting radio frequency identification tags to facilitate traffic over the demilitarized zone, a critical step to transforming the factory park into a truly international business hub.

"The talks revolve around technical matters, which is taking time," he said, without elaborating on details. He said officials have touched on issues relating to setting up a permanent secretariat, investment protection and attracting foreign investments, over which there is little discrepancy in opinions. Seoul said it wants to hold an investor relations meeting regarding the Kaesong complex next month for foreign companies operating in South Korea.

Related to the talks, Kim Ki-woong, co-chairperson for the joint committee, told reporters before heading to Kaesong earlier in the day that future talks will be centered on ensuring that Kaesong becomes internationally competitive.

"To reach this goal, there are still quite a few problems to resolve, even though the factory park itself has reopened," he said. The official said that the committee will work to resolve all outstanding issues in a step-by-step manner.

His North Korean counterpart responded at the start of talks in Kaesong that there is no reason to rush and that all matters should be discussed in a timely and thorough manner. He pointed out that besides carrying out negotiations, the North must take time to help reopen factories.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130916/kaesong-park-begins-test-run-koreas-discuss-sustainable-gr-0