(2nd LD) Koreas end talks without agreement, to meet again next month

(ATTN: UPDATES with chief delegate's remarks, details throughout)
By Kim Hyun
SEOUL, June 19 (Yonhap) -- South and North Korea failed to agree on wage and rent
hikes demanded by Pyongyang at a joint industrial park on Friday, but left room
for negotiation by scheduling the next meeting, officials said.
North Korea rejected Seoul's call to release a factory worker who has been held
for months, said chief of the South Korean delegation, Kim Young-tak, to
reporters upon returning from the joint park in the North's border town of
Kaesong. But the two sides agreed to meet again on July 2 to continue
negotiations, he said.
The inter-Korean talks came amid growing confrontation between North Korea and
the outside world. The U.N. Security Council punished North Korea for its May 25
nuclear test by sharpening financial sanctions and allowing searches of North
Korean ships suspected of carrying missile and nuclear materials at sea. In
response, Pyongyang vowed to bolster its nuclear deterrence and threatened
military clashes in the case of any search attempt.
In the talks held for two hours and 40 minutes, North Korea reiterated the
demands it presented at the previous round on June 11, Unification Ministry
spokesman Chun Hae-sung said. The North wants South Korean firms to quadruple
monthly wages for its workers to US$300 from the current $70-80. The businesses
paid $26.8 million in wages alone last year to the North Korean government.
Pyongyang also seeks to raise the 50-year rental fee for land to $500 million.
South Korean developers already paid $16 million when the park opened in 2004.
Seoul rejected North Korean demands as "unacceptable," as they override existing
contracts, officials said.
North Korea gave no word about the fate of the Hyundai Asan Corp. employee,
identified only by his family name of Yu, and refused Seoul's request to deliver
a letter from his family, Kim said. Yu was detained at the joint park on March 30
on accusations of "slandering" the North's political system.
"We strongly urged the release of the detained worker and demanded access to
him," Kim said. "But the North's delegation only said there was no problem with
him and told us to convey its word to Mr. Yu's family."
Many feared the North may try to shut down the joint park, but it left room for
further negotiations. In an unexpected gesture, North Korea offered to lift a
traffic curfew on South Korean businessmen traveling to the joint park, officials
said. The restriction was imposed in December to protest Seoul's conservative
policy.
"There were no strings attached. The North said it intends to do so to ease
business operation," Kim said.
South Korea proposed holding joint surveys in foreign industrial zones in China,
Vietnam and eventually in the United States, officials said, to seek ways to
improve Kaesong park's competitiveness. It was not known yet whether North Korea
accepted.
North Korea complained about Lee's stern remarks in the Washington summit, a
senior ministry official said, requesting anonymity.
With Obama at his side at the White House, Lee said South Korea will pursue
reunification with the North "on the principles of a free democracy and a market
economy." Watchers said that call is certain to provoke North Korea, sending a
signal that the affluent South intends to absorb the impoverished communist
state.
The joint park, just an hour's drive from Seoul, was born out of the first
historic inter-Korean summit in 2000 and continued to grow under South Korea's
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. As a
sign of increased stress, a clothing manufacturer withdrew this month in the
first pullout by a South Korean firm from the industrial park.
hkim@yna.co.kr
(END)