Inter-Korean trade up by 300%
Joong Ang Daily
Hwang Young-jin
6/19/2007
Trade volume between North and South Koreas has increased more than threefold since the historical June 15 Declaration in 2000.
With an average increase of 24.3 percent, annually, the total amount will reach $1.7 billion by the end of the year, according to the report on inter-Korean Trade from the Korea International Trade Association, also known as KITA.
Annual trade volume in 2000 was $425 million, which increased to $1.3 billion last year. Trade volume so far this year until May has already reached $563 million, which is a 31.3 percent increase year-on-year.
Besides the overall growth, what is healthy about the trade quality is that commercial trade accounts for almost 70 percent of the total trade. That figure was below 60 in 2000, according to the report. Non-commercial trade refers to aid including items such as rice, clothing and fuel. In other words, they are products that were sent to North Korea free of charge.
“The success of the Kaesong Industrial Complex is the biggest reason [for the rise],” said Roh Sung-ho, head of the Inter-Korean trade support team at KITA. “We are accepting bids for additional space at the Kaesong complex, and three times more companies bid than there are lots available.”
With more and more companies establishing factories in Kaesong, more material is exported from the South, and more manufactured goods return, said Roh.
The value of goods leaving South Korea was higher than the value of goods returning. However, about 30 percent of those goods were aid and were given free of charge. When that is taken into account, the North made more money from its exports to the South than the South made in exports to the North.
This allows the North to record a profit in trade account books.
“The nuclear incident last year, didn’t affect inter-Korean trade. There might be minor falls, but I expect trade volume between the two Koreas to increase for the time being,” Roh said.
