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North Korea abruptly withdrew from a liaison office with South Korea on Friday, in a major setback for Seoul just hours after Washington imposed the first new sanctions on the North since the U.S.-North Korea summit broke down last month.
The office, which opened last year, had marked renewed cooperation between the North and South that were until then only in contact through telecommunications.
The second U.S.-North Korea summit in Vietnam collapsed due to disputes over U.S.-led sanctions on the North. Senior Trump administration officials said on Thursday that "the door is wide open" to more talks but at the same time, added the U.S. plans to ramp up enforcement of the disputed sanctions and other economic measures.
A recent United Nations report found that Pyongyang was evading sanctions designed to limit its funds for nuclear weapons and ballistic missiles through sophisticated schemes that include the deception of global banks and maritime smuggling.
Seoul's Unification Ministry said that North Korea informed South Korea of its decision to recall its staff during a meeting at the liaison office at the North Korean border town of Kaesong.
The North said it "is pulling out with instructions from the superior authority," according to a Unification Ministry statement. It didn't say whether North Korea's withdrawal of staff would be temporary or permanent.
According to the South Korean statement, the North added that it "will not mind the South remaining in the office" and that it would notify the South about practical matters later. Seoul's Vice Unification Minister Chun Hae-sung told reporters that South Korea plans to continue to staff the Kaesong liaison office normally and that it expects the North will continue to allow the South Koreans to commute to the office. He said Seoul plans to staff the office with 25 people on Saturday and Sunday.
The South Korean statement calls the North's decision "regrettable." It said South Korea urges the North to return its staff to the liaison office soon.
The liaison office opened last September as part of a flurry of reconciliation steps. It is the first such Korean office since the peninsula was split into a U.S.-backed, capitalistic South and a Soviet-supported, socialist North in 1945. The Koreas had previously used telephone and fax-like communication channels that were often shut down in times of high tension.
The town is where the Korea's now-stalled jointly run factory complex was located. It combined South Korean initiatives, capital and technology with North Korea's cheap labor. Both Koreas want the U.S. to allow sanctions exemptions to allow the reopening of the factory park, which provided the North with much-needed foreign currency.
The North has been reversing on other markers of cooperation as well. Kim vowed last summer to dismantle facilities a long-range rocket site a Sohae, but researchers analyzing the facility say it is once again in normal operating status after being rebuilt.
Trump said earlier this month that the situation with North Korea was a "very nasty problem" but reiterated that relations remained "good" and would "ultimately get solved."