(LEAD) Koreas to resume talks on joint venture park

(ATTN: UPDATES with delegation's departure, quote)
By Kim Hyun
SEOUL, June 19 (Yonhap) -- South Korea's government delegation traveled to North
Korea on Friday for talks over a joint business park, now at a critical juncture
amid sharpened confrontation between Pyongyang and the outside world over new
U.N. sanctions.

The third round of talks follows a tough message from South Korean President Lee
Myung-bak, who called for a stronger alliance between Seoul and Washington and
vowed not to compromise with Pyongyang in a summit with U.S. President Barack
Obama earlier this week.
Despite the grim outlook, Seoul officials expressed hope. "The weather is good
today, so wouldn't the talks go well?" Kim Young-tak, senior representative for
inter-Korean dialogue at the Unification Ministry and head of the 14-member
delegation, told reporters before crossing the border. The talks are scheduled to
start at 10 a.m. at the park in the North's border town of Kaesong.
Watchers doubt there will be any room for negotiations, with few signs of
compromise from both sides. At issue are North Korea's demands that South Korean
firms quadruple monthly wages for its workers to US$300 from the current $70-80
and raise collective land rent to $500 million, a 31-fold increase from the $16
million paid when the park opened in 2004.
Kim said South Korea will press for the release of an engineer from Hyundai Asan
Corp. who was detained at the joint park in March on charges of "slandering" the
North's political system.
Unlike the previous two rounds, Seoul heads to the talks with a clear position
after Lee rejected the North Korean demands as "unacceptable."
"We will not accept such demands being laid out by the North Koreans," Lee said
in a joint press conference with Obama at the White House.
"I urge the North Koreans not to make any unacceptable demands because we cannot
really know what will happen if they continue on this path," he said.
His stern remarks spurred speculation at home that Seoul may be considering
withdrawing from the park as a worst-case scenario option, a shift from its
earlier position to keep the last remaining inter-Korean venture open under any
circumstances.
Cho Bong-hyun, a North Korea analyst with the Seoul-based IBK bank, said Lee's
message will draw a tit-for-tat reaction from North Korea, as its hardline
military is believed to be willing to terminate the joint park.
"North Korea has heard South Korea's response (by way of Lee's summit remarks),
and it will come to the talks with a tougher position, with extra demands like
tax charges. The talks may end with no word about the next round," he said.
Cho Myung-cheol, a former economics professor at Pyongyang's Kim Il Sung
University who defected to the South in 1994 and is now a think tank analyst,
presented a rare optimistic view.
In the face of U.N. financial sanctions for its recent nuclear test, North
Korea's cash-strapped economy will become needier, he said. He also noted that in
the previous round, the North asked the South to build dormitories and nurseries
and expand roads for the park, a possible sign it intends to expand the venture
for profit.
"After the U.N. sanctions, the meaning of cash income has become greater. North
Korea won't artificially cut off the rare source of cash," Cho said.
South Korean firms paid $26.8 million in wages alone last year to the North
Korean government.
Unification Minister Hyun In-taek has said Seoul is willing to build the dorms
and nurseries for North Korean workers, mostly women in their 20s and 30s, should
North Korea prove its willingness to develop the park.
The joint park was born out of the first historic inter-Korean summit in 2000 and
has continued to grow under liberal governments, despite the North's first
nuclear test in 2006. More than 100 South Korean firms currently operate there,
making clothes, kitchenware, electronic equipment and other labor-intensive goods
with about 40,000 North Korean employees.
But unraveling political relations have taken their toll on the businesses. North
Korea curtailed cross-border traffic this year and at times completely banned it
to protest Seoul's conservative policy. Safety concerns also emerged, with the
Hyundai worker now being held for over 80 days.
As a sign of increased stress on companies there, a clothing firm withdrew this
month in the first pullout by a South Korean firm from the industrial park.
hkim@yna.co.kr
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