COLLEEN MCEDWARDS, WORLD NEWS: Establishing diplomatic relations with North Korea is also on the agenda of the Japanese government. Talks aimed at breaking North Korea's self-imposed isolation were held in Pyongyang on Wednesday. And CNN's Seoul bureau chief Sohn Jie-Ae has that.</s>SOHN JIE-AE, CNN SEOUL BUREAU CHIEF (voice-over): The outcome of talks between North Korea and Japan expected to have major impact on South Korea, which shares the world's most fortified border with the North and affect the political future of the South's president, Kim Dae Jung, and his policy of active engagement, the "sunshine policy." President Kim has advocated the North's forming of diplomatic relations with Japan and openly welcomed Pyongyang's cautious advances into the international community, at times sounding like a diplomat from the North, as at a recent Seoul meeting of the Asia Pacific Economic Cooperation Forum.</s>KIM DAE JUNG, SOUTH KOREAN PRESIDENT (through translator): I hope that it's time for business in the APEC member economies to fully consider entering into the North Korean market.</s>JIE-AE: But even as the North tests the waters with Tokyo and some Western countries, it has been unresponsive to President Kim's calls for direct South-North talks, causing conservative forces to raise a critical question.</s>MOON CHUNG-IN, YONSEI UNIVERSITY: Can really Washington and Tokyo go ahead of Seoul in making normalization with Pyongyang? If that happens, there can be enormous political and diplomatic burden on the part of the Kim (ph) government.</s>JIE-AE: Especially as the president's party heads into tough parliamentary elections in mid-April. The ruling party has claimed there has been progress in inter-Korean talks behind the scenes. But the opposition says the claim is all political rhetoric. (on camera): While the ruling party may feel the short-term fallout of being left out of the North's ventures into the outside world, analysts say President Kim is determined to maintain his position of cheering at the sidelines. Sohn Jie-Ae, CNN, Seoul.
North Korea's Talks With Japan Expected To Have Major Impact On  South Korea