Seoul officials travel to N. Korea for talks on troubled joint venture

(ATTN: RECASTS headline, COMBINES with previous story slugged "inter-Korean
talks-preparation," ADDS details)
By Kim Hyun
SEOUL, June 9 (Yonhap) -- An advance team of Seoul officials left for North Korea
Tuesday to prepare for the second talks on a joint industrial park, as concerns
about its future grew after a South Korean firm decided to withdraw.
A clothing firm, Sskin Net, said it was pulling out of the joint venture in the
North's border town of Kaesong by the end of this month, the first withdrawal by
a South Korean company since the park opened in 2004.
The decision came as an additional burden for the South Korean government, which
is set to face North Korea in the government-level talks at the joint park on
Thursday.
"Our government will consider various measures to sustain stable production
activities. North Korea also should stop unilateral actions that make the park
unstable," Unification Ministry spokesman Chun Hae-sung said in a briefing.
The four-member advance team traveled to North Korea to prepare for the upcoming
talks, but there were few signs that there will be a breakthrough. Little has
changed since the previous talks ended bitterly in April, as the two sides could
not narrow differences on agenda.
Pyongyang is demanding wage hikes and land use payments from South Korean firms
at Kaesong but refuses to discuss Seoul's major concern, a South Korean worker
detained at the Kaesong complex in March for "slandering" the North's political
system.
In a follow-up statement last month, the North declared all contracts regarding
the joint park "null and void," saying it will unilaterally revise them. It told
South Korean firms that could not accept the new terms to leave. Watchers say
North Korea will use the upcoming talks to present its terms on the wages and
land fees.
Tensions are high along the inter-Korean border, and South Korea's military is on
a heightened alert throughout the western sea border, the site of naval
skirmishes in 1999 and 2002, following the North's warning of clashes.
Seoul officials say North Korea also appeared to be preparing to launch an
intercontinental ballistic missile following its May 25 nuclear test.
The Sskin Net owner, Kim Yong-gyu, said growing anxiety over his workers' safety
drove him to pull out. Buyers were also cutting orders in face of the military
tension, he said.
"We used to have five workers stay there to manage the factory, but now we manage
with only two," Kim said over the telephone. "Even if the possibility (of a
worker's detention) is just 0.1 percent, I feel it would be a crime to send my
employees there."
The Kaesong Industrial Council that represents the businesses investing in the
zone ruled out the possibility of a greater exodus, saying the first withdrawal
is more of an isolated case. Most of the 106 firms at the venture are small
manufacturers who reportedly have put all their resources into the joint park.
"It's true that there's anxiety, but I don't think all of the businesses need to
be disturbed by a single company's withdrawal," Yoo Chang-geun, vice chairman of
the council and owner of SJ Tech Co., an electronic equipment firm, said.
Yoo said it was relatively easier for the Sskin Net to withdraw than others. The
clothing factory opened in 2007 on a space leased from an apartment-type,
five-story building supplied with electricity and basic equipment at the joint
park. Earlier developers started from scratch by constructing their own factories
and bringing in electricity.
North Korea on Tuesday sent to Seoul the list of its five-member delegation,
headed by Pak Chol-su, vice chief of the Special District General Bureau, the
North's government agency overseeing the joint park. Pak represented the North's
delegation in the April 21 talks, for which Pyongyang did not disclose the names
in advance.
Seoul notified Pyongyang of its delegation, headed by Kim Young-tak, director
general of the Kaesong Industrial Complex Project Bureau under the Unification
Ministry, over the weekend.
The joint venture is the last remaining inter-Korean economic project to come out
of the historic summit between then South Korean President Kim Dae-jung and North
Korean leader Kim Jong-il in 2000. With low wages -- between approximately
US$70-$80 a month -- and free land use guaranteed until 2014, the park has
continued to grow in size and output until recently.
According to ministry data, political tensions were dampening business
performance. Combined overseas shipments out of Kaesong park were US$7.15 million
in the January-April period, down 56 percent from $16.27 million during the same
period a year ago.
The companies' output also slipped 6.6 percent from last year's $79.83 million to
$74.54 million, despite the increase in the number of firms at the joint park
from 72 to 106.
hkim@yna.co.kr
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