South Korea revealed Wednesday it had been courting IKEA to set up shop in the jointly-run Kaesong industrial park, a proposal rebuffed by the Swedish home furnishing company.
IKEA has stores in over 40 countries, with plans to expand into the West Bank and the South Korean proposal could have paved the way for a market it has never entered before.
But its refusal proves a problem for South Korea which has been keen on developing Kaesong into a global industrial complex to help safeguard the park from another unilateral shutdown by North Korea.
The South Korean government said it had been seeking to bring in foreign investment to Kaesong long before it was shuttered as ties with the North deteriorated.
According to the Wall Street Journal, South Korea sees the park as a peace-building tool and looked to bring in Western firms to dissuade Pyongyang from closing the facility.
Marathon talks between the two Koreas revived hopes of Kaesong reopening but little progress has been made over Seoul’s demand for a concrete North Korean guarantee not to repeat an abrupt shutdown which crippled 123 South Korean-owned factories.