- The Washington Times - Tuesday, June 11, 2019

A group of South Korean businessmen who own factories inside a shuttered joint industrial complex between North and South Korea is pressing the Trump administration to allow the complex to reopen as a way to boost detente on the divided Korean Peninsula and spark movement in stalled denuclearization talks with Pyongyang.

While the administration has held that U.N. sanctions prohibit any activity at the Kaesong Industrial Complex, a collection of textile factories on the North Korean side of the border, the businessmen claim that an exemption should be made.

“Our argument is that peace efforts and cooperative economic efforts between the South and the North are supposed to be exempt from U.N. sanctions as they currently stand,” said Kim Ki-mun, who is heading the business delegation to Washington this week to lobby lawmakers on reopening Kaesong.

The Trump administration declined to comment on the visit. Mr. Kim’s delegation briefed House Foreign Affairs Committee members behind closed doors Tuesday.

Mr. Kim, who owns a shuttered watch factory at Kaesong and heads the Korea Federation of Small and Medium-Sized Entities, told The Washington Times in an interview that “the factory infrastructure is still in place” and could restart relatively quickly.



Kaesong, he argued, could one day grow into a massive multinational industrial investment in the North, boosting the prospects of detente on a much broader scale.

“Our plan and our vision is that it won’t just be a two-country complex but multinational industrial complex, where U.S., Japanese and other European countries and their companies can participate,” he said.

Mr. Kim said the economic stakes are particularly high for thousands of small- and medium-sized South Korean firms.

“About 5,000 South Korean businesses were involved in bringing base materials into Kaesong for producing things at the factories. So, after Kaesong closed, about 100,000 South Koreans in South Korea have lost jobs because they are no longer supplying the primary materials for these companies.”

Kaesong opened in 2004 and at its height employed some 54,000 North Koreans, as well as about 800 South Koreans at factories representing roughly 125 businesses. But after a surge in missile and nuclear testing by Pyongyang, South Korean officials pulled out of the complex in 2016, citing fears that the North was taking a cut of workers’ pay and diverting goods to gain hard currency for military programs.

Analysts urge the Trump administration to tread carefully on the matter because Kaesong’s reopening now could be read as a major concession to Pyongyang at a moment when North Korean leader Kim Jong-un has made little movement toward abandoning his nuclear arsenal.

At issue is U.N. Security Council Resolution 2375 — the central pillar of the Trump administration’s ramping-up of economic sanctions against Pyongyang in 2017. Although it does not explicitly mention Kaesong, the resolution clearly prohibits “joint ventures or cooperative entities, new and existing” with North Korea.

Sources say the language has made South Korean President Moon Jae-in reluctant to push too hard on Kaesong, despite a feeling among some in his government that a reopening could dramatically ease tensions with Pyongyang.

Moon Chung-in, a special adviser to the South Korean president, told the Seoul-based news outlet NK News last month that certain “measures” could be put into place to allow Kaesong to move forward without violating sanctions. “We can resume the Kaesong Industrial Complex by providing the wages to North Korean workers individually, that wouldn’t violate the U.N. sanctions resolutions,” said the special adviser, who also argued that a third-party-run escrow account could be set up in a South Korean bank to ensure “the transfer of other expenses, such as for land use,” is not misappropriated by Pyongyang.

It remains to be seen whether the Trump administration will bite.

Joe DeTrani, a former CIA official who served as the State Department’s special envoy for North Korea talks before their collapse nearly a decade ago, said in an interview that “it’s fallacy to assume North Korean workers who come to Kaesong will actually retain everything they receive in terms of wages.”

“If the government in Pyongyang wants a percentage, or a good percentage, it will exact that percentage,” Mr. DeTrani said.

“Until there’s some resolution of how North Korea is going to move forward with complete, verifiable, irreversible denuclearization,” he said, “it should not be allowed to carve out other issues like this. Kaesong should be part of the whole package tied to nuclear negotiations.”

The delegation of South Korean business owners disagreed.

“I know the U.S. is worried about the North Korean government taking part of the wages,” said Chang-seop Moon, chairman of a South Korean textile firm that employed 3,000 North Korean workers making footwear at Kaesong.

“But from my experience … the North Korean workers individually check the hours that they work and they won’t sign off their wage check unless they know it reflects the hours that they worked.”

Kim Ki-mun, the delegation leader, pointed to the symbolic value of a successful reopening of Kaesong.

“If we were to build such an industrial complex all over North Korea, we think it would be a great step toward expanding market economy, as well as democracy within North Korea,” he said. “We hope that it will be a positive step towards opening up the country, and we hope that people in the U.S. will think about this in a favorable light and consider it in those terms.”

Maggie Garred contributed to this report.

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