Opportunities in North Korea?

Companies are eyeing the market for if and when sanctions are relaxed.

Taiwanese businesses are among many around the world that watching to see whether the prospective U.S.-North Korean denuclearization deal is successful, and if so whether the North Korean market will be opening up for international trade, an expert on North Korea said at an AmCham Taipei briefing.

Before American, United Nations Security Council, and other sanctions on North Korea were tightened in recent years, Taiwan and North Korea conducted a modest amount of trade. Taiwan imported US$12.2 million worth of goods from North Korea in 2016, making it the country’s fourth largest trading partner. According to a report by Taiwan’s Bureau of Foreign Trade (BOFT), Taiwan’s main imports from North Korea from 1989 to April 2017 include minerals (72%), metals (13%), and vegetable products (7%). Taiwanese companies were mostly exporting chemicals, textiles, and machinery.

Taiwanese businesspeople “want to be ready for when the North Korean market opens up,” said Seong-hyon Lee, Director of Unification Strategy Studies at the Sejong Institute, a think tank outside of Seoul. “When it does, they’ll rush in.”

Map of the Korean peninsula including North and South Korea and major cities.

Many observers believe that despite the fanfare sparked by the Trump-Kim talks in Singapore, the current negotiations will fall apart eventually as they have many times before. But Lee is optimistic about North Korean leader Kim Jong-un’s latest peace offensive, saying Pyongyang will opt for denuclearization if he views it as more beneficial than maintaining a nuclear arsenal.

“Kim is 34. He’ll be around for the next 50 years or more,” Lee said. “However, he doesn’t want to rule an impoverished nuclear country for the next 50 years.”

At the Singapore summit, President Trump tempted Kim with images of what North Korea’s economic development could look like if it gave up its nuclear weapons. “They have great beaches,” Trump said to reporters shortly after the summit. “You see that whenever they’re exploding their cannons into the ocean. I said, ‘Boy, look at that view. Wouldn’t that make a great condo?’”

Although Taiwan is not a member of the United Nations, President Tsai Ing-wen’s government has complied with the punitive U.N. measures against Pyongyang – a move that has drawn praise from the United States.

Earlier this summer, Taiwan announced that it will stop the employment of North Korean workers on Taiwanese fishing boats, promising to drop off the last three workers at convenient ports by the end of July.

Taiwan will continue to obey the international sanctions as long as they are in effect, said Wu Wan-fang of BOFT’s Japanese, Korean and Oceanian Affairs Section. “We currently stand by this commitment,” she said. “How we proceed in the future depends on the international climate.”

Amid the current restrictions, some of the most prominent local and multinational companies are waiting for an opportunity to enter East Asia’s last undeveloped market.

A Taiwanese travel agency, Chung Hsing Travel Service, recently teamed up with a North Korean travel company, the Korean Heritage International Travel Co., to offer package tours to North Korea for Taiwanese travelers. Korean Heritage is a joint venture of a North Korean government agency and a Chinese travel company.

“It’s a world of business,” Lee said. “Even if North Korea is a bad guy, if you can make money, people are looking for an opportunity.”