Wednesday, June 17, 2009

South Koreans prepare for talks with North

S. Koreans prepare for talks with North

Thursday, June 18, 2009

SEOUL -- A South Korean delegation left for North Korea Wednesday to prepare for talks on the future of a jointly-run industrial estate, amid low expectations for agreement.

The South's President Lee Myung-Bak, speaking after a summit with President Barack Obama in Washington Tuesday, rejected the North's new financial demands for the Kaesong estate as excessive.

The communist state last week stunned Seoul by demanding a wage rise for its 40,000 workers to US$300 per month from around US$75 dollars currently.

It also demanded an increase in rent for the Seoul-funded estate to US$500 million, compared to the current US$16 million for a 50-year contract.

The estate is the last functioning reconciliation project between the two countries, which have remained technically at war since their 1950-53 conflict.

A four-member unification ministry delegation travelled to the estate just north of the border where they will check preparations for Friday's talks, said ministry spokeswoman Lee Jong-Joo.

"There is no change to the government's position that Kaesong industrial zone must be sustained and developed amid stability," she said.

"On the basis of this principle, pending issues will be discussed. And we will continue stressing the North must not make excessive demands."

Seoul also says the fate of a South Korean estate manager detained since March 30 must be a priority in the negotiations.

The North accuses him of defaming its political system and of trying to persuade a female employee to defect.

"The North is now making excessive demands concerning the Kaesong industrial zone. We will not accept them," Lee said in Washington.

"If Kaesong shuts down, 40,000 North Koreans would lose jobs. This is why the North must stop making excessive demands for its own interest."

The 106 South Korean firms at the estate have also refused to accept the demand.

They complained many of them were teetering on the brink of bankruptcy, with orders plunging amid international tensions over the North's April rocket launch and its second nuclear test last month.

Inter-Korean relations have been hostile for the past year. The North has intermittently restricted access to Kaesong and expelled some South Korean staff.

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