[imText1]In 2006, North Korea’s trade deficit was over $110mn.
On the 14th, the Korea Trade-Investment Promotion Agency released a report on North Korea’s foreign trade stating, “Last year, North Korea’s imports totaled $2.049bn, an increase of 2.3% compared to 2005. However, exports decreased 5.2%, approximately $1.102bn worth of trade deficit.”
North Korea’s total foreign trade figures were close to $2.996bn, a decrease of 0.2% compared to the previous year.
KOTRA analysts said North Korea’s foreign economic situation worsened following the world attention it caused by its long range missile test last July and the subsequent October nuclear test.
Following the 2002 July economic reforms, North Korea’s foreign trade steadily increased, even peaking at $3bn, a considerable achievement compared to the early 90s. However, a sudden decrease in Western investment led to a significant reduction in overall trade.
Furthermore, North Korea’s number 1 trading partner is China with 56.7% of the total trade. That is followed by Thailand, the EU, Russia and Japan. Then again, trade by these countries including China cover 90% of North Korea’s total trade.
Whenever trade between North Korea, China and Thailand increased, there was a significant decrease in trade with Japan and the EU. Also, as North Korea’s foreign trade situation worsened, greater emphasis was placed on trade with China.
KOTRA’s report stated that a decrease in trade with the EU resulted from the implementation of economic sanctions by western countries which came about after North Korea launched a missile test that has the potential of hitting the United States and then tested a nuclear bomb underground several months later.
Consequently, there was an increase in trade with its traditional friendly nations, China and Thailand, KOTRA added.
KOTRA forecasts that as U.S.-North Korea relations improve, improvements in relations with the other nations will also occur providing a friendlier environment for North Korea’s economic situation. We may see reinvigorated North Korean foreign trade, however that will depend on how well the North Korean nuclear issue is resolved.
