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S. Korea Demands North Respond Today on Joint Factory Talks

Photographer: Jung Yeon-Je/AFP/Getty Images

The inter-Korean industrial complex of Gaeseong is seen from a South Korean observation tower in Paju near the demilitarized zone (DMZ) dividing the two Koreas. Close

The inter-Korean industrial complex of Gaeseong is seen from a South Korean observation... Read More

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Photographer: Jung Yeon-Je/AFP/Getty Images

The inter-Korean industrial complex of Gaeseong is seen from a South Korean observation tower in Paju near the demilitarized zone (DMZ) dividing the two Koreas.

South Korea demanded North Korea agree by today to negotiations aimed at re-opening a jointly-run industrial park that has been shuttered for more than two weeks or face reprisals.

North Korea hadn’t responded as of 10:47 a.m. local time to yesterday’s offer by Park Geun Hye’s administration to hold talks on the Gaeseong industrial zone, Unification Ministry spokesman Kim Hyung Suk told reporters in Seoul. The South will wait until noon to take “serious measures” if there is no reply, Kim said, declining to elaborate.

The Korean peninsula has been on edge since February, when Kim Jong Un’s regime detonated an atomic bomb in defiance of United Nations sanctions then threatened preemptive nuclear strikes against its enemies. The North on April 8 recalled its workers from Gaeseong, the last point of inter-Korean exchange and a source of hard currency for its impoverished nation.

The complex, about 10 kilometers (6 miles) north of the demilitarized zone between the two countries, employs more than 53,000 North Koreans at 123 South Korean companies. North Korea generates $100 million in annual profits there, while South Korea makes quadruple that amount, according to Yang Moo Jin, a professor at the University of North Korean Studies in Seoul.

Jeopardizing Efforts

With the U.S. and South Korea calling on North Korea to return to negotiations, Park’s options in pressuring Kim over Gaeseong “are very limited,” said Kim Young Yoon, a research fellow at the Korea Institute for National Unification in Seoul.

“Removing South Korean workers, assets and companies from Gaeseong or taking some military action against the North for not responding to calls for dialogue will jeopardize all diplomatic efforts and what little that’s left to salvage deteriorated ties,” Kim said.

North Korea has blocked South Koreans from accessing the complex while allowing them to leave. Currently 176 South Korean executives and managers remain in Gaeseong voluntarily, and none plan to return to Seoul today, Unification Ministry spokesman Kim said.

South Korean companies operating there have urged the government to break the impasse and address damages from the loss of operations. The association representing them yesterday issued a statement calling for talks between the two countries “as soon as possible.”

Inducements Rebuffed

The warning from Park’s government is probably “in response to domestic public opinion, which is souring over the concerns for the losses being incurred,” analyst Kim said.

Kim Jong Un, who took over as leader in December 2011 following the death of father Kim Jong Il, has rebuffed international inducements to abandon nuclear weapons development. The Obama administration has rejected claims North Korea possesses the ability to launch nuclear-armed ballistic missiles while warning Kim’s inexperience raises the possibility of errors.

The risk of a miscalculation in the dispute over North Korea’s nuclear and missile programs has increased, the chairman of the U.S. Joint Chiefs of Staff said April 24 in Beijing. China, North Korea’s biggest ally, regards the situation “very seriously,” General Martin Dempsey told reporters after meeting officials including President Xi Jinping.

“We think there is still time for North Korea’s leaders to back away from provocations and we hope they take the opportunity to do so,” Dempsey said.

Strategic Buffer

China regards its neighbor as a strategic buffer with U.S.- backed South Korea. Secretary of State John Kerry said ahead of meetings this month in Beijing that Xi’s government needs to “put some teeth” into restraining Kim’s regime.

In a sign of greater cooperation, China’s North Korea envoy, Wu Dawei, visited Washington and discussed North Korea with Undersecretary of State Wendy Sherman, Foreign Ministry spokeswoman Hua Chunying said yesterday. U.S. Deputy Secretary of State William Burns is visiting Beijing and Seoul this week.

The North is ready to conduct another nuclear test “at any moment,” South Korean Defense Ministry spokesman Kim Min Seok said April 23. North Korea vowed to strengthen its nuclear program after a U.S. State Department report found the country guilty of “egregious and pervasive” human rights abuses.

South Korean Foreign Minister Yun Byung Se met Chinese counterpart Wang Yi April 24 in Beijing. The talks paving the way for the start of a three-way “strategic dialogue” with the U.S. over issues including North Korea, Foreign Ministry spokesman Cho Tai Young told reporters yesterday in Seoul.

To contact the reporter on this story: Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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