ROK firms hurt by inter-Korean trade restrictions

According to Yonhap:

Hundreds of South Korean companies doing business with North Korea are teetering on the edge of bankruptcy due to a prolonged cross-border trade ban, the head of the first inter-Korean joint venture said Sunday.

Inter-Korean trade flourished following a summit between the divided countries in 2000, but has been banned by South Korea since last May in response to the sinking of the Cheonan corvette two months prior, which Seoul says a North Korean submarine torpedoed.

According to the South’s unification ministry, about 860 South Korean companies are operating in North Korea.

“South Korean companies, which invested about 200 billion won (US$179 million) in Pyongyang and Nampo, North Korea, are on the brink of bankruptcy because of the suspension of the inter-Korean trade,” Kim Jung-tae, head of Pyongyang Andong Hemp Textiles, said in an interview with Yonhap News Agency.

Pyongyang Andong Hemp Textiles is the first inter-Korean 50-50 joint venture between the South’s Andong Hemp Textiles and the North’s Saebyol General Trading Co., which was established in October 2008.

Kim said the companies posted a combined $150 million in operating loss due to Seoul’s ban on inter-Korean trade.

In June, Kim formed a body consisting of about 200 South Korean businessmen to seek solutions to the prolonged inter-Korean trade suspension. In its opening ceremony, the body called for the government to implement measures to resume inter-Korean trade.

However, the unification ministry holds firm to its position that the trade ban will remain intact until the North takes responsible measures for the sinking of the Cheonan.

Read the full story here:
S. Korean firms reeling from inter-Korean trade ban
Yonhap
3/6/2011

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