Night Watch

North Korea-South Korea:TheKorean Central News Agencyreported a proposal by North Korea'sCommittee for the Peaceful Unification of the Fatherlandfor renewingtalksaboutthe Kaesong industrial complex(KIC).

It noted that North Korea is ready to take four actions:

--withdraw its temporary closure of the KIC and allow South Korean enterprises unrestricted entry;

--guarantee the provision of labor to enterprises that are ready to resume production;

--guarantee the security of South Korean personnel and assets; and,

--ensureno future repeats of the closure.

If South Korea responds positively to the proposed conditions then the seventh round of talks can take place, the North Korean statement declared.Talks would take place on 14 August. The North saidthat the date would allow for "joyful news" to be given to the people of the two Koreas on August 15th. This is the day Korea was liberated from Japanese colonial rule in 1945, and is a holiday in both Koreas.

South Korea accepted the North's offer.

Comment:It is premature to raise expectations, but the North's capitulation on the major issues is a significant concession and an enormously positive development, depending on actual implementation. The task of reassembling the 53,000 workers at Kaesong is a huge challenge for North Korea, but that is what North Korea has agreed to undertake. The lesson is that Kaesong is important and forget the North's bluster.

The North injected a face-saving qualifier that both North and South Korea would ensure uninterrupted operations at Kaesong. The North's counter-offer tends to confirm that it needs the revenue from Kaesong. It also tries to place some burden on South Korea to not take actions that jeopardize operations at the complex.

The North's offer coincided with a demonstration in Seoul by South Korean businessmen over the Seoul government's effort to make reimburse businesses for the permanent closure of Kaesong. This is tonight's good news.

Night Watch

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