This study seeks to examine trade between South Korea and North Korea in the following perspectives: background of its discussion; the South Korean government’s process of reaction; necessity of gaining international recognition; advantages and disadvantages. Ultimately, the study seeks to discuss the feasible policy directions of inter-Korean trade.
With South Korea’s initial agreement to the WTO negotiations planned on April 1994, claims for South Korea and North Korea’s trade to be internationally recognized as an “inter-Korean trade” are increasing. Designating South Korea and North Korea’s trade as “inter-Korean” and domestic in its nature is a very important issue which practically decides both the trade scale and the future economic relations between the two Koreas.
As the customs-free transaction system between South Korea and North Korea may face objection by a third country, gaining international recognition is advantageous in preventing such opposition beforehand, especially at a time when South Korea is in the process of accession to the WTO. Trade between South Korea and North Korea can both be approached from a “local” and “international” perspective, but it is difficult to judge which is absolutely right as both have their own legal grounds in international law.
However, working to receive international recognition of inter-Korean trade at this stage not only means South Korea denying its current position, but also dilutes the seriousness of the North Korea’s nuclear issue. Furthermore, without any third country filing an objection, the Koreas working to gain international recognition may complicate the issue. And should the Koreas fail in gaining international recognition, the economic relationship between the two Koreas will receive a negative impact. And finally, there is a limited time to work on an agreement between stakeholders and North Korea.
From a practical perspective, the core of the problem lies at the way other countries recognize trade between South Korea and North Korea. Since there is no need for the Koreas to judge its trade as that “between separate countries,” a more desirable way for the government is to adhere to the current stance in viewing the trade as domestic in nature instead of raising problems on the issue.
This however, does not mean that the government can take a passive role and wait for another country’s objection. Instead, the government needs to be well-aware of the countries that are likely to raise objection, and actively work to persuade them in case their support is needed. At the same time, an organized rationale behind inter-Korean trade and countermeasures on all possible cases will have to be developed beforehand.
남북한 교역의 내국간 거래 승인문제와 우리의 입장(Study on the international recognition of inter-Korean trade as domestic trade and South Korea’s position)
[서울] : 한국개발연구원
|Series Title; No||정책포럼 / 제35호(9405)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|