(LEAD) Wage talks between 2 Koreas fails again

(ATTN: CHANGES headline, lead; UPDATES with wage talks results in paras 1-5)

SEOUL, April 19 (Yonhap) -- Inter-Korean talks to resolve an ongoing row over wage hikes for North Korean workers at a joint industrial park in the North ended in vain, with only one day remaining until the deadline, the Seoul government said Sunday.

"(The South's) quasi-governmental committee and its North Korean counterpart had a meeting on the minimum wage issue, as the North side accepted our proposal on Saturday," said the Ministry of Unification which handles North Korean affairs in the Seoul government. "They had not made any agreements or improvements."

The two Koreas have been in dispute since the North unilaterally decided in February to raise wages by 5.18 percent to US$74 per month starting in March for about 53,000 North Korean workers hired by South Korean firms at the Kaesong Industrial Complex in the North's border city of the same name. None of the 124 South Korean firms have paid March wages to North Korean workers yet.

The meeting was the second contact between the South and North authorities since their first fruitless meeting on April 7. The deadline for the March wage payment is due on Monday.

The ministry said the government will keep holding quasi-government level talks and encourage North Korea to come to the government-level table to discuss the issue.

Due to the stalled talks, South Korean firms in the joint industrial park in North Korea have been sandwiched between North Korea's unilateral pay hike and South Korea's refusal to honor it.

North Korea has threatened to impose an arrears charge of 15 percent per month if South Korean companies do not pay the wages on time.

The South Korean government would not accept the North's unilateral move, saying Pyongyang violated a 2004 agreement that calls for two quasi-government committees from each side to set the wages together. The wage cap has been set at 5 percent.

Seoul has warned the South Korean firms operating in the Kaesong Industrial Complex that they will face punitive measures if they pay the wages that were raised single-handedly by the North.

South Korea does not want the wage row to serve as a precedent for the North to make unilateral decisions on the operation of the industrial complex.

During the April 7 meeting, North Korea insisted the pay hike is a "sovereign issue," which should not be subjected to negotiations.

"We are still sending messages to North Korea for further consultations on the issue," a Unification Ministry official said. "Our position is to resolve the issue through dialogue."

The official asked South Korean firms in the Kaesong complex to join forces with the Seoul government, expressing concerns that "some companies think they are ready to pay the wages raised by the North to help facilitate the production of goods in a smooth manner."

"What is the most important thing is the companies involved join hands with the (South Korean) government."

The industrial complex, which opened in the early 2000s, is the last remaining symbol of inter-Korean reconciliation. It has served as a major revenue source for the cash-strapped communist North.
(END)