They both have a common interest in manipulating Kaesong Industrial Region to grow economic at both ends. South Korea needs North Korean’s labor resource and cheap land to build plants that catering low-end products market across the world while North Korea needs to jump-start the nearly bankrupt economy because of deep expenses in nuclear system. North Korea has shown their intention to forge a rapprochement by having a broadcast from the leader of Pyongyang in January 2013 to sit and come for a solution later in 2013. North Korea made their points very clear about asking U.S stay out of the business and stop influencing South Korea’s economic growth because the obstacle raised in Kaesong Industrial Region was that U.S wouldn’t support South Korea’s private sectors investing technology but just low-end products like apparel, shoes, etc…
If comparing BATNA of two parties, North Korea has a stronger BATNA since they have nuclear, cheap labors and share the borders with China. While its counterpart’s military in the South needs supports from The States and has to compete with China on the world’s economic market share. South Korea’s sole interest is to do business in a peaceful environment and cut 50% variable cost from employing their sibling’s workers than paying Chinese to do the work. Therefore, China wants to support North Korea to pull back the collaboration between the siblings and constraint South Korea’s manpower alternatives. U.S in another hand wanted to reduce dependent on China and look for new manufacturing ground. Hence, U.S has supported South Korea to push forward the Kaesong Industrial Zone in manufacturing low-end Product. If South Korea doesn’t come along with U.S’s requirement, it will slow down its economic growth dramatically and even worst, U.S may not back up their military system and stay away from the dispute.
Therefore, South Korea should have softened their attitudes towards its counterpart on June 12th, 2013 for a happy talk and come into a win-win discussion on the win-win game for the two nations.
But South Korea leader’s ego was too high and causing the collapse of the talk in 2013. So, if I were the facilitator, I would start this principled negotiation by an outcome framing process and leverage positioning and interests info that I collected to get them come to an agreement as follow:
1. North Korea brings workers back to work in Kaesong Industrial Zone and sign an agreement for operation suspense in which North Korea will pay all the loss caused by the idle of operation.
2. Both parties discuss and come to an agreement on what type of products Kaesong Industrial Zone can fabricate and a potential launch of the 2nd collaborative economic development focusing on a wide range of technological products.
3. This particular negotiation will not be the nuclear-oriented issue. It’s another story on another day ☺