Two Koreas fail to reach deal in Kaesong wage row talks

Mr Lee Sang-Min (centre), a senior South Korean Unification Ministry official, speaks to the media in Seoul on July 16, 2015, before leaving for North Korea to hold talks on a wage dispute at their joint industrial zone.
Mr Lee Sang-Min (centre), a senior South Korean Unification Ministry official, speaks to the media in Seoul on July 16, 2015, before leaving for North Korea to hold talks on a wage dispute at their joint industrial zone. PHOTO: AFP

SEOUL (AFP) - Rare talks between North and South Korean officials on Thursday over a protracted wage dispute at the jointly operated Kaesong industrial zone in the North ended Thursday without any agreement, according to Yonhap news agency.

The two sides have been mired in a months-long row over wages at the Kaesong estate, just 10km over the border in North Korea, with Pyongyang insisting on unilaterally imposing a pay rise for its workers.

Seoul had stressed that any wage change must be a joint decision.

North Korea last week agreed to reopen a joint committee in charge of running the industrial park for the first time in more than a year to discuss the wage dispute.

But delegates from the North and South failed to reach any agreement, Seoul-based Yonhap reported late Thursday, citing a South Korean official.

The official told the news agency the two sides intended to meet again but that no date had been set.

Earlier, the five-member South Korean government delegation was received by their North Korean counterparts at a conference hall at the industrial zone.

“I’m happy to see you,” said the South’s chief delegate Lee Sang-Min, a senior Unification Ministry official who also heads the South’s delegation at the joint committee, as he shook hands with his North Korean counterpart Pak Chol-Su.

“Nice to see you,” Pak replied, as the pair exchanged what appeared to be forced smiles.

The industrial estate, a joint enterprise between Pyongyang and Seoul, hosts around 120 South Korean firms employing some 53,000 North Korean workers.

The South Korean companies get cheap labour on top of preferential loans and tax breaks from their government, which also effectively underwrites their investment.

Kaesong opened in 2004 and had survived repeated inter-Korean crises that closed off every other avenue of cooperation.

But in 2013, the North effectively shut down the zone for five months by withdrawing its workers following a surge in military tensions. Many firms are still reeling from financial losses from the shutdown.

Kaesong is a key earner for the cash-strapped North. The hard currency wages are kept by the state, which passes on a fraction – in local currency – to the workers.

Cross-border tensions have remained high this year due to a series of North Korean ballistic missile tests, nuclear threats and annual US-South Korean military exercises.