Seoul: South and North Korea will resume talks to discuss revitalising a Seoul-funded joint industrial estate despite tension over days of a border artillery fire, officials said on Sunday.
They will meet in the Kaesong estate, just north of the heavily fortified border, on Monday for a follow-up to talks that ended in failure on January 21, the South`s Unification Ministry said.
The North at the weekend informed the South of its participation in the talks, approving a plan by southern delegates to cross the border into Kaesong, it said.
Previous talks broke down as Pyongyang insisted on discussing a sharp pay increase for 42,000 North Koreans working for 110 South Korea-funded plants in Kaesong, which Seoul still refuses to discuss.
The South instead demanded that talks should focus on easier cross-border access to Kaesong and housing for northern workers there.
The talks follow the communist North`s live fire which sent hundreds of shells near the disputed sea border in the Yellow Sea from Wednesday to Friday.
No one was hurt but the drill prompted the South to fire warning shots in response and further raised tension between the two neighbours which remain technically at war since the 1950-1953 conflict.
The sea border, drawn at the end of the war but never recognised by the North, has been a source of tensions between the two sides which had bloody naval clashes in November and in 1999 and 2002.
The North has stopped artillery fire but the South closely monitors the communist neighbour which already declared two "no-sail" zones that straddle the disputed sea border, effective until March 29.
On the eve of the talks in Kaesong, Seoul had little expectations for the upcoming round to produce any tangible results.
"We have remained unchanged. The North`s demand for a pay rise should be excluded from agenda to be discussed at Monday`s talks," a Unification Ministry spokesman said on Sunday.
Pyongyang had stunned Seoul by demanding a wage rise to USD 300 per month for the employees in Kaesong, from around USD 75 currently.
Kaesong, the only cross-border reconciliation project still functioning since 2004, is designed to bring together the North`s cheap workforce and the South`s capital and expertise.
But its operations have often been hit by political tension.
It produces kitchenware, textiles, electronics and other light industrial goods.