Both Koreas agree to reopen Kaesong industrial complex

North and South Korea have agreed in principle to reopen a joint industrial zone seen as the last remaining symbol of cross-border reconciliation, Seoul said Sunday after wrapping up rare talks.

Officials agreed to "revive operations of the firms" at the Kaesong complex "when ready," according to an agreement signed by both sides after marathon talks held near the border wrapped up early Sunday.

The complex – built in 2004 about 10 kilometres north of the border as a rare symbol of inter-Korea cooperation – had previously remained largely resilient to turbulence in relations.

But the North, citing military tension and Seoul's hostile policy, pulled out all its 53,000 workers from the Seoul-owned factories in April, prompting the South to withdraw the managers of around 120 companies in early May.

Neither side declared the complex officially closed, instead referring to a temporary shutdown, while blaming each other for its suspension.

The two rivals will discuss ways to reopen the zone and how to guarantee the prevention of another shutdown in a meeting to be held on Wednesday at the complex, the agreement said.

They also agreed to allow Seoul businessmen to visit their factories in Kaesong to check on production machinery beginning Wednesday, and to retrieve finished goods and raw materials in a nod to key demands by business owners.

The North will guarantee safe passage for the South Korean managers and their vehicles when they carry out the inspection, according to the agreement.

"Most of the demands made by the South have been reflected in the agreement," said an unnamed official quoted by the South's Yonhap news agency.

Suh Ho, Seoul's chief delegate for the latest talks, told Yonhap the North's officials had appeared "very enthusiastic" in negotiations to revive the complex – a valuable source of hard currency for the impoverished communist state.

"I could feel that the North was making very active efforts to solve the issue of the Kaesong complex," Mr Suh was quoted as saying after the meeting.

The latest deal, struck after 15 hours of gruelling negotiations, comes after the zone became the most high-profile casualty of elevated tensions on the peninsula after the North carried out its third nuclear test in February.

Representatives of the South Korean companies in the zone have repeatedly urged the two sides to open talks to revive the moribund industrial park.

Some firms have threatened to withdraw from Kaesong, complaining they have fallen victim to political bickering between the two rivals.

After repeatedly threatening Seoul and Washington with conventional and nuclear attack, Pyongyang has appeared in recent weeks to want to move towards dialogue.

Analysts say North Korea is mindful of a US demand that it improve ties with Seoul before there can be any talks with Washington.

The North made a surprise move last Wednesday by restoring a cross-border military hotline and promising to let South Korean businessmen visit the Kaesong complex.

* AFP