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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > International > Article Home Business & Finance News U.S. Politics International Technology Entertainment Sports Lifestyle Oddly Enough Environment Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Two Koreas square off over arms trade and border Wed Apr 22, 2009 7:44am EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Jon Herskovitz SEOUL (Reuters) - North and South Korea squared off over Seoul's plans to crack down on Pyongyang's suspected illicit arms trade at rare and acrimonious talks on their one remaining major area of economic cooperation, an official said. North Korea added to tension on the heavily armed peninsula a day after the talks by accusing the South of moving a border marker several dozen meters, saying on Wednesday the move "is a vicious criminal act" that could lead to a military response. Russia's foreign minister was due to arrive in Pyongyang on Thursday in a bid to reduce tensions raised by the North's defiant launch of a long-range rocket this month, its threat to boycott nuclear disarmament talks and plans to restart a plant that makes bomb-grade plutonium. The rival Koreas held their first economic talks in more than a year on Tuesday at the Kaesong Industrial Park, where South Korean firms use cheap North Korean labor and land to make goods at the complex located just north of their border. North Korea said it wanted to revise the terms of operation to increase the wages for its workers, whose basic minimum monthly salary of $70 is paid to the North Korean state, and renegotiate land lease terms. Analysts said the North may be looking to squeeze more money out of Kaesong after it lost aid from the South equal to about 5 percent of its yearly GDP due to political wrangling. It also stands to feel a greater pinch on its finances after the United Nations approved a call to tighten existing sanctions on the reclusive state to punish Pyongyang for its April 5 launch, widely seen as a disguised test of a long-range missile. "The flow of aid from the South has stopped. Now it has fewer incentives to keep the unfavorable terms (at Kaesong) intact amid the souring inter-Korean relations," said Koh Yu-hwan, a professor of North Korea studies at Dongguk University. ARMS TRADE South Korea could cut down on another source of hard currency for its cash-strapped neighbor if it joins a U.S. plan, called the Proliferation Security Initiative (PSI), to halt the flow of weapons of mass destruction. The South's delegation at the talks in Kaesong called on the North to refrain from criticizing Seoul's participation, after Pyongyang had said it saw joining PSI as a declaration of war, a South Korean Unification Ministry spokesman said. The North's delegates warned the South not to join PSI, the South's Yonhap news agency reported an informed source as saying. Yonhap also said South Korea may announce its decision to take part in the initiative this weekend. South Korea for years had avoided joining PSI out of fear of antagonizing the prickly North but government officials said Seoul was moving closer after Pyongyang raised regional tension with the launch and its nuclear threats. North Korea, angered by South Korean President Lee Myung-bak's decision after he took office a year ago to cut the aid flow to his impoverished neighbor, has disrupted work at the Kaesong enclave to put pressure on Seoul to drop its hard line. Continued... 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