North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-19-1
10/19/2009

Trade between North and South Korea has fallen more than 20 percent during the first eight months of 2009. Between January and September, exchanges between the two amounted to 929.7 million dollars, 24.1 percent less than the 1.2243 billion dollars recorded during the same period in 2008.

Inter-Korean trade has grown steadily over the past several years, marking 1.056 billion USD in 2005, 1.35 billion USD in 2005, 1.8 billion USD in 2007 and 1.82 billion USD last year. 2009 was the first year in which inter-Korean trade numbers have fallen. According to customs officials, inter-Korean trade in August, at 136.62 million USD, only registered 84 percent of that seen a year prior.

Trade numbers have continued to fall over the last 12 months. During that time, 3,399 items were exported, with a net worth of 53.81 million dollars, while 3,005 goods were imported, worth 82.8 million USD. A trade deficit of 28.99 million USD for South Korea is likely to continue through December. Sixty-four percent of goods exported from North Korea were light industrial products, the large majority being textiles. Fishery exports also made up 14 percent, or 1.24 million USD, of the North’s products sent to South Korea.

The South’s trade deficit, hitting 1.8 million USD, has been ongoing for the last 11 months. Overall, however, trade has been declining, largely due to the international financial difficulties and North Korea’s most recent nuclear test. South Korea, in accordance with UN resolution 1874, has restricted the export to North Korea of 13 different luxury goods in response to the North’s second nuclear test. Seoul has agreed to ban the export of thirteen different luxury goods, including wine, liquor, cosmetics, leather goods, furs, rugs, pearls and other jewelry, electronic goods, cars, boats, optics, clocks, musical instruments, art supplies and collectibles.

That said, as the South Korean economy recovers from the current global financial woes, it also appears that inter-Korean relations may improve. With the recent reunion of separated families and other North Korean moves to reengage Seoul, it may be possible for inter-Korean exchanges to again grow.

This entry was posted on Tuesday, October 27th, 2009 at 10:47 pm and is filed under Foreign aid statistics, International trade, Statistics, Trade Statistics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.