North and South Korean envoys failed today to resolve a dispute over Pyongyang's demands for salary and rent increases at a joint factory park in the communist state that is one of its few sources of hard cash.
The talks came a day after American officials said the US Navy was tracking a North Korean ship under new UN sanctions that bar Pyongyang from trading in weapons, including missile parts and nuclear material.
Destitute North Korea may be looking to launch a long-range missile toward Hawaii in the coming weeks, news reports also said, which could further stoke tensions after its May 25th nuclear test that put it closer to having a working atomic bomb.
The rocket launch would be in defiance of UN resolutions but could be part of efforts to consolidate leader Kim Jong-il's power in preparation for succession in Asia's only communist dynasty, South Korean officials say.
Previous rounds of talks between North and South Korean officials over the Kaesong Industrial Complex have hit snags over money and Pyongyang's refusal to meet Seoul's demands to release a South Korean worker held at the park for supposedly insulting the North's communist system.
North Korea repeated its demand for higher wages and lease payments but offered to lift some of the traffic restrictions that slowed the movement of materials and workers, said Chun Hae-sung, a South Korean Unification Ministry spokesman.
Officials will meet again on July 2nd for more talks.
North Korea has demanded wages of $300 (€215) a month per person for the about 40,000 North Koreans employed in Kaesong, up from around $70 (€50) now. The North also wants lease payments of $500 million (€359 million) over 50 years, an increase of more than 30 fold from the current deal.
North Korea in May said it was cancelling all wage, rent and tax agreements at Kaesong in what analysts said was likely a bid to squeeze more money out of the more than 100 South Korean firms that use the cheap labour and land there.
Reuters