Two Koreas hold talks on joint industrial site

SEOUL (AFP) - Seoul and Pyongyang were to start fresh talks on reopening a joint industrial complex on Wednesday as a group of South Korean factory owners visit the mothballed site.

The sensitive talks follow a rare weekend meeting in which the two sides agreed in principle to reopen the Kaesong industrial complex, which shut down three months ago as relations between the two neighbours hit a low.

Pyongyang, citing military tensions and the South's hostility toward the North, in April withdrew its 53,000 workers from the 123 Seoul-owned factories at the complex, which is seen as the last remaining symbol of cross-border reconciliation.

The South withdrew managers from most of the operations in early May.

The latest round of talks, which were expected to begin later Wednesday, follow months of friction and threats of war by Pyongyang after its February nuclear test attracted tougher UN sanctions, further squeezing its struggling economy.

High on the agenda will be a demand from Seoul that Pyongyang guarantees it will never again unilaterally shut down the South Korean-funded site, a key source of hard currency for the impoverished North.

The South also wants a pledge to safeguard uninterrupted movement in and out of the complex, as well as compensation for losses stemming from the suspension, a demand that the North is unlikely to accept.

"We will not accept circumstances reverting back to the way they were before the crisis," Unification Ministry spokesman Kim Hyung-Suk told reporters in Seoul on Tuesday.

At the end of gruelling 15-hour talks, the two sides said in a joint statement on Sunday that they had agreed to let South Korean firms restart their shuttered plants at the complex near the border when conditions are ripe.

The statement was viewed as a crucial step forward in winding down months of high tension.

On Tuesday, more than 20 visitors from the South, including government officials and workers, went to the complex to restart power supplies.

Dozens of South Korean businessmen were expected to inspect their factories on the sidelines of the talks on Wednesday.

However, some factory bosses have threatened to withdraw from the complex, complaining they have fallen victim to political bickering between the two rivals, which are still technically at war following their 1950-53 conflict which ended only in a ceasefire.

The Kaesong complex - built in 2004 about 10km north of the border - had previously remained largely resilient to turbulence in relations.