North Korea and South Korea have reportedly concluded working-level talks to release Mr. Yu, a Hyundai Asan employee in the Kaesong Industrial Complex, as early as Thursday. The matter of Mr. Yu’s detention has been weighing heavily on inter-Korean relations, and after 136 days is now virtually settled.

A source on North Korea said Wednesday that working level talks on the Yu issue were wrapped up on Wednesday, and that Yu would be allowed to return to South Korea when Hyun Jung-eun, chairwoman of Hyundai Group, returns this Thursday or Friday. In preparation for Yu’s release, Hyundai Asan CEO Cho Kun-shik will reportedly visit Kaesong on Thursday.

On the issue of how Yu will be released, an official with the Unification Ministry says based on North Korea’s investigation into Yu’s case, he will most likely be deported in accordance with inter-Korean travel and residence agreements.

Observers believe Yu’s release may allow for some breathing room in inter-Korean relations. The South Korean government has now been given cause to expand the distribution of grants from the inter-Korean economic cooperation fund to private groups to provide humanitarian assistance to North Korea. The fund’s use has been extremely limited. Observers also anticipate that restrictions on visits to North Korea by social and cultural exchange groups and businessmen may become relaxed. Since April, such visits have been completely banned due to what South Korea’s government has cited as a lack of personal security guarantees. At the very least, it is likely the South Korean government’s wall against North Korea, which has been erected since Mr. Yu’s seizure (March 30) and North Korea’s long-range rocket test (April 5), will be lowered.

It is being said that whether securing Yu’s release will affect full-scale improvements in inter-Korean relations depends on Hyun’s meeting with North Korean leader Kim Jong-il. In particular, focus is on whether an agreement is reached on restarting the Mt. Kumgang and Kaesong tourism projects, both of which are run by Hyundai Asan. If this occurs, analysts suggest it could serve as a turning point towards normalizing inter-Korean relations.

A North Korean source says if Kim Jong-il expresses regret about the suspension of the Mt. Kumgang project and Hyun returns with an agreement on the need to resume operations, the South Korean government, which is the party that halted the project, would need to seriously consider restarting it. The source also says North Korea could propose a reconvening of family reunions, and resuming tourism to Mt. Kumgang could serve as the first steps for facilitating inter-Korean government cooperation on humanitarian issues.

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