North, South Korea agree to reopen joint industrial park

North and South Korea have reached an agreement on the re-opening of a shuttered industrial park on a trial basis starting on Monday, according to a statement by the South Korea's unification ministry, a sign of a further thaw between the two countries that remained technically at war, Reuters reports.

The development is being seen as a softening of Pyongyang's tone after it threatened Seoul with retaliatory nuclear attacks earlier this year for what it termed "provocative" joint military exercises with the US, the report said.

The Kaesong industrial complex, lies a few kilometers inside North Korea and was closed with Pyongyang pulling its 53,000 workers out in April increasing tensions.

The two countries have agreed to meetings between  families separated by the 1950-53 Korean War for the first time since 2010, in a sign that Pyongyang and Seoul were taking tentative steps towards confidence-building measures.

February saw, North Korea set an immediate challenge to incoming South Korean president Park Geun-hye with its third nuclear test responding to stricter sanctions imposed by the UN following after a long-range missile test by the North.

Cutting off all links with the south following the condemnation of the tests, Pyongyang said it was ready for war.

The two sides last month agreed to tentatively re-open the facility, closed by the North in April, though  South Korea was still looking for compensation for its companies, which took a hit from the closure also for assurances a shutdown would not happen again.

According to the statement, the two sides agreed that South Korean companies would not pay taxes for this year, and they also agreed to open the complex to foreign investors, which could make it harder to shut down operations in the future.

Though North Korean state media confirmed the 16 September reopening, it offered no further details, Voice of America (VOA) reports.

Kaesong, has since its setting up in 2004, symbolised cooperation between Seoul and Pyongyang, which continue to remain in a technical state of war since cessation of conflict in 1950s conflict following a truce, the report said.

The complex with more than 120 South Korean businesses serves as a source of vital foreign currency to the impoverished North, which supplies cheap North Korean labour to manufacture a variety of products.

According to Troy Stangarone, the senior director of the Korea Economic Institute of America, who spoke to VOA, the deal was an important step for Korean relations, though he remained sceptical of the willingness of foreign companies to invest in Kaesong under the current circumstances.