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Seoul may cut trade with N. Korea

Seoul may cut trade with N. Korea

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Published : 2010-04-25 21:28
Updated : 2010-04-25 21:28

Seoul is weighing its options of how to respond to North Korea’s planned seizure of South Korean facilities within the mountain resort just north of the inter-Korean border.

Among them is restricting inter-Korean trade of agricultural and marine products such as garlic, mushrooms, prawns and clams.

North Korea has said that it will seize the South Korean assets and deport all South Korean staff from the Mount Geumgang resort this week.

Unification Ministry spokesperson Lee Jong-joo said Seoul will take firm measures against the North’s infringement on property rights.

“The decision on what kind of measures to be taken will be made shortly,” Lee said.

Seoul, however, doesn‘t have many options left.

The government is reportedly considering limiting the volume of agricultural and marine products from North Korea or tightening regulation of imports in other ways.

Certain North Korean items, such as sand, hard coal and mushrooms, already require the unification minister’s approval each time someone wants to bring them into the South. Seoul could expand the number of such items, making the import process more troublesome.

Currently, South Korean materials going into the joint industrial park in the North’s border town of Gaeseong and products rolled out from factories there account for more than 60 percent of inter-Korean trade.

Last month’s inter-Korean trade volume amounted to $202 million, 63 percent of which were goods going in and out of the Gaeseong park.

Since cross border tours to Mount Geumgang have been stalled, most of the remaining inter-Korean trade volume (35 percent) consists of agricultural and marine products.

Although the growth of inter-Korean trade has slowed under the Lee Myung-bak administration, South Korea is still the North’s second largest trading partner after China, according to the Unification Ministry.

Inter-Korean trade accounts for about 30 percent of the North’s trade with other countries, while China takes up about half.

The Seoul government could also further restrict nongovernmental aid to the North, which it has limited ever since Pyongyang launched a rocket in April last year.

It could also engage to the international community about the North’s “wrongful measures.”

On Friday, the day the North said it would deport South Koreans from the mountain resort and seize five South Korean assets and freeze others owned by private companies, Seoul warned that the North’s “illegal and wrongful measure” would “fundamentally harm inter-Korean relations.”

Meanwhile, a Chinese tourist train entered North Korea for the first time on Saturday, carrying some 421 passengers including a group of Finnish students, Beijing’s state news agency Xinhua reported.

The train embarked on the four-day tour from the Chinese province of Liaoning under a new arrangement with North Korea, which is expected to attract tens of thousands of tourists, the agency said.

The North has warned that it will look for new business partners for the Mount Geumgang tours, adding to the difficulties of South Korea’s Hyundai Asan Corp., which has the exclusive right to run the resort it developed around the scenic mountain.

By Kim So-hyun (sophie@heraldcorp.com)

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