Koreas fail to reach agreement on Kaesong

North and South Korea failed Monday to reach agreement on reopening a jointly-run industrial estate, dimming hopes of an early improvement in ties after months of friction. A third round of talks about the complex, which followed two failed attempts this month, again ended without agreement, Seoul's chief delegate Kim Ki-Woong said. But the two sides will meet again on Wednesday, he told reporters. The latest meeting was held at the suspended Kaesong industrial complex, which opened in 2004 10 kilometres (six miles) north of the heavily-fortified border as a rare symbol of cooperation. The zone had long remained resilient to turbulence in ties but eventually became the most high-profile victim of the latest flare-up following Pyongyang's February nuclear test. The North, citing perceived hostility by the South and its joint army exercises with the US, in April withdrew all its workers and banned entry by southerners, prompting Seoul to pull out its managers in early May. At a rare meeting earlier this month, the two sides agreed in principle to reopen the estate, where 53,000 North Koreans worked in 123 Seoul-owned factories producing textiles or light industrial goods. But little progress has been made since then amid squabbles over which side will take responsibility for the suspension, and Pyongyang's refusal to accept Seoul's demand for firm safeguards against another unilateral shutdown. Seoul also wants to allow foreign firms to operate in Kaesong in an apparent bid to make it more difficult for Pyongyang to shut the estate if relations worsen. "(We) should develop Kaesong into an international industrial complex by allowing... business activities of foreign companies as well as South Korean firms," the South's chief delegate said in opening remarks. The North has called for an unconditional and quick restart, blaming Seoul's "hostile policy" for the suspension and the current deadlock in negotiations. "The South came up with the ludicrous idea of 'internationalising' Kaesong. It is not even worth discussing because lack of foreign firms... is not the reason behind the current crisis," its official website, Uriminzokkiri, said in an editorial Monday. The talks -- even though fruitless so far -- are a contrast to months of cross-border friction and threats of war by Pyongyang after its nuclear test attracted tougher UN sanctions. Pyongyang last Wednesday proposed separate meetings to discuss the resumption of suspended cross-border tours to its scenic Mount Kumgang resort, and the reunion of families separated since the Korean War. But it retracted its proposal a day later after Seoul only accepted the offer of talks on family reunions while refusing to discuss the Mount Kumgang tours -- once a valued source of hard currency for the impoverished communist state. On Saturday North Korea said the outcome of the Kaesong talks would affect overall relations. "Unless the Kaesong Industrial Complex issue is resolved, there cannot be any progress in inter-Korean relations," it said in a statement on official media. Many Seoul businessmen with factories in Kaesong, facing millions of dollars in damages due to the shutdown, have threatened to leave the complex permanently if the current suspension continues.