North and South Korea agree talks over Kaesong factory park

The complex generated nearly $2 bn a year in cross-border trade

The Kaesong factory park was the last remaining vestige of inter-Korean rapprochement (AP)

North and South Korea have agreed to hold talks on the jointly run factory park where work was suspended in April.

The industrial complex in the North Korean city of Kaesong, just north of the Demilitarized Zone dividing the estranged neigbours, was the last remaining vestige of inter-Korean rapprochement until Pyongyang pulled out its workers amid diplomatic tension.

As South Korea held military exercises with the US not far from the border, North Korea pulled its 53,000 workers in protest. South Korea then ordered its managers to leave as well, against their wishes.

But yesterday the South's Unification Ministry announced plans for low-level talks on restarting the plant, taking place on Saturday in the village of Panmunjom on the heavily armed border.

The closing of Kaesong - which facilitated nearly $2 billion a year in cross-border trade - dealt a symbolic blow to reconciliation on the Peninsula.

It also meant a loss of salary for tens of thousands of North Koreans employed in factories run by 123 South Korean companies, and a loss of goods and orders for business managers who relied on Kaesong to churn out everything from shoes and watches to cables and electrical components.

On Wednesday, North Korea had responded to a plea to visit the factory from South Korean business managers who wanted to move their goods and equipment out of the park.

In a statement, the representatives of the managers said they hope the working-level talks will be held successfully. They said they are asking the two governments to approve a visit to North Korea on Tuesday.

Last month, senior-level talks between the two sides - intended to focus on stalled joint projects like the factory - had to be scrapped over a dispute about delegates.

Aimed at improving co-operation after a tense few months, which culminated in threats of nuclear war from the North, the talks had seemed like a major diplomatic breakthrough.

The last few years have seen North Korean nuclear tests, long-range rocket launches and attacks blamed on the North that killed 50 South Koreans in 2010.

Earlier this year the North Korean leader Kim Jong-un threatened nuclear war, and was greeted by a pledge of retaliation from the South.

The armistice which ended the 1950-53 Korean War has never been replaced with a peace treaty, leaving the neighbours technically at war.

Analysts say Pyongyang is trying to improve ties with Seoul because it very much wants dialogue with the United States, which could give the North aid, ease international sanctions and improve its economy in return for concessions.