North and South Korea agreed on Wednesday to reopen their Kaesong joint industrial park next week, five months after it was shut during soaring military tensions.
Following a marathon negotiation session, the two sides set a date of September 16 for restarting the shuttered complex, the South’s Unification Ministry said.
South Korean firms in Kaesong, which lies 10 kilometres over the border in North Korea, will be allowed to resume operations after a trial run on Monday, the ministry said.
The agreement came at a second round of talks between the two Koreas in a newly created Kaesong joint committee that began on Tuesday morning and stretched through the night.
Born out of the “sunshine” reconciliation policy initiated in the late 1990s by then-South Korean president Kim Dae-Jung, Kaesong was established in 2004 as a rare symbol of inter-Korean co-operation.
It has provided an important hard currency source for the impoverished North through taxes, other revenues, and its cut of workers’ wages.
It had appeared immune to previous downward spirals in North-South relations, but finally fell victim to two months of intense military tensions that followed the North’s nuclear test in February.
Both sides blamed the other for its closure, with the North insisting that its hand was forced by hostile South Korean actions - in particular, a series of joint military exercises with the United States.
As military tensions eased, the two Koreas agreed last month to work together to resume operations at the zone.
As part of the deal, the North accepted the South’s demand that Kaesong be opened to foreign investors - a move seen by Seoul as a guarantee against the North shutting the complex down again in the future.
Wednesday’s agreement included plans to host a road show for foreign investors at Kaesong in October.
Once Kaesong is reopened, Pyongyang is likely to step up pressure on Seoul to revive another cross-border project - South Korean tours to the North’s Mount Kumgang resort.
The South suspended the tours - another important source of hard currency for the North - after a North Korean soldier in 2008 shot dead a female tourist from the South who strayed into a restricted zone.
In response the North scrapped a deal with the resort’s developer - Seoul’s Hyundai Asan company - and seized its properties there.
Seoul has agreed to discuss resuming the Kumgang tours but has delayed the date for talks to begin.
In the meantime, Kumgang will play host at the end of this month to the first reunion in three years of family members separated by the 1950-53 Korean War.
The reunion programme began in 2000 following an historic inter-Korean summit. Sporadic events since then have seen around 17,000 relatives briefly reunited.
But it was suspended after the North’s shelling of a South Korean border island in November 2010.
Millions of Koreans were left separated by the Korean War, which sealed the peninsula’s division. Most have died without having had a chance to reunite with family members last seen six decades ago.