South and North agree on Kaesong Complex normalization

Posted on : 2013-08-15 14:36 KST Modified on : 2019-10-19 20:29 KST
The South Korean side takes internationalization of complex over insisting that the North take responsibility for closure
 heads of the South and North Korean delegations to the seventh round of talks on normalizing operations at the Kaesong Industrial Complex
heads of the South and North Korean delegations to the seventh round of talks on normalizing operations at the Kaesong Industrial Complex

By Park Byong-su and Kim Kyu-won staff reporters

South and North Korea have reached an agreement to normalize operations at the Kaesong Industrial Complex,133 days after the complex was shut down by North Korea. The South Korean government softened on its demands that North Korea take full responsibility for the closure, while North Korea accepted a number of key demands, including internationalization of the complex, measures on transit, communications, and customs, and the creation of a joint committee for the complex.

They agreed to hold some discussions to decide the specific day operations will resume.

The seventh round of working-level talks took place on Aug. 14 at the complex’s general support center, with Kim Ki-woong serving as head of the South Korean delegation. The North Korean delegation included the deputy director of the Central Special Zone Development Guidance Bureau.

The signed agreement includes five items: a guarantee on normal operations of the complex under any and all circumstances; protections of South Korean employee safety, investments, transit, communications, and customs; internationalization of the complex; the establishment of a joint committee for the complex; and active efforts to resume operations.

The focus of the agreement was on preventing either side from unilaterally shutting the complex down. The issue of one side accepting responsibility for this year’s closure - which had been the subject of strenuous demands from Seoul - was left out entirely.

The agreement did not point to either North or South as being responsible for the shutdown. Instead, it guaranteed that the complex would operate normally “without being affected by the political situation under any circumstances.”

It is not immediately clear why South Korea suddenly backed off on its previous demand, a key area of disagreement, after bringing it up consistently at the first six rounds of talks.

“South and North jointly agreed to guarantee normal operations for the complex, but in reality you have to see it as North Korea’s guarantee,” said Yang Moo-jin, a professor at the University of North Korean Studies. “It may be that domestic political issues factored into the decision to leave out the responsibility issue and focus on preventing future shutdowns.”

The agreement also made the “guarantees” more enforceable by spelling them out: unhindered passage for South Korean workers, consistent attendance by North Korean workers, and protections on company assets. The two side also agreed to set up a joint committee as a way of enforcing the guarantees, with subcommittees set up as needed.

“The joint committee will be a permanent discussion body between South and North Korean authorities to address issues related to the complex’s operations, including enforcement of this agreement,” said a senior official with the Ministry of Unification.

The official said the committee would be chaired by someone with director general-level status.

“The joint committee is a safeguarding institution meant to prevent arbitrary actions such as North Korea unilaterally deciding to close the complex,” the official explained on condition of anonymity.

From a different perspective, though, the agreement is only a general statement that the two sides will work toward normalizing and developing the complex’s operations. The agreement left the joint committee to handle the sensitive issues that have caused friction between South and North: compensation for damages from the shutdown (including electricity fee cuts and tax breaks), as well as guarantees on transit, communications, and customs.

Previously, the two sides had also agreed to form a joint committee to address related issues when they signed their Jan. 2004 agreement on access and visits to Kaesong and the Mt. Keumgang tourism zone. Operation of the committee was lax and its functioning was more or less symbolic.

The fact that no agreement was reached on a specific date or procedure for resuming operations shows that some practical concerns remain.

Speaking about the date issue, Kim Ki-woong said, “It will take time for the government to set up the institutional safeguard of the joint committee, and for the companies to service their infrastructure. The committee will be holding discussions during that process.”

Kim’s explanation hinted that the two processes - setting up the committee and starting the complex up again - would go on simultaneously, with decisions on the latter made according to the progress of the former. This leaves some mountains yet to climb before the complex is running again.

The references to developing Kaesong into a “globally competitive” complex appeared to reflect the wishes of President Park Geun-hye. The two sides agreed to work to attract foreign companies, apply global business standards to the complex’s management, and hold overseas investment briefings.

“If the complex is internationalized, this would also function to prevent North Korea from arbitrarily deciding to shut it down,” the Unification Ministry official explained.

But experts said the agreement only has the effect of a statement, since attracting foreign businesses would first require that the complex be functioning effectively enough to draw in foreign capital.

In any case, the agreement, however general, appears likely to have a favorable impact in thawing frosty inter-Korean and North Korea-US relations and paving the way for a resumption of the six-party talks on the North Korean nuclear program.

In past months, experts said success in getting the complex back to normal would be a touchstone for inter-Korean relations.

Now that the rocky road has finally led to an agreement, the stage has been set for attempts at future cooperation to address humanitarian aid and reunions of separated families, as well as economic cooperation issues, such as an end to the May 24 measures taken by the South Korean government in the wake of the 2010 sinking of the ROKS Cheonan warship and the resumption of tourism at Mt. Keumgang.

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