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Foreign Trade Policy

The DPRK government established diplomatic ties with foreign countries all over the world under the ideal of independence, peace and friendship, promoted trade and other economic exchange with them and consolidated the foundation of the national economy, thus contributing to the development of the world economy and international trade relations. "The develop foreign trade is not incompatible with self-sufficiency in the economy but provides an important guarantee for consolidating the economic self-sufficiency of the country and its might and speeding up the drive to make the national economy Juche-orientated, modern and scientific." In keeping with the changed international environment and the requirements of the growing national economy the DPRK government renewed the interim law oh trade adopt the Foreign Trade Law on December 10, 1997 as a decision of the then Standing Committee of the Supreme People's Assembly. The keystone in the trade policy pursued by the DPRK government is to expand and develop foreign trade on the basis of consolidating the foundation of the independent national economy, which provides a material guarantee for promoting foreign trade on the principle of full independence and equality between countries.  The independent national economy does not mean "closed economy".

  Over the past decades the DPRK has consistently maintained the policy of carrying on foreign trade by relying on the self-supporting national economy and consolidating its foundation through foreign trade. The government has maintained the principle of independence, equality and mutual benefit and the credit-first principle in foreign trade relations. It set forth the credit-first policy and has ensured that all the companies strictly maintain credit to improve the trade environment of the country. To make foreign trade multilateral and diverse, the government is expanding the scope of foreign trade and bolstering up economic relations with other countries.  Article 3 of the Foreign Trade Law stipulates; "Multilateral and diverse trade is the fundamental way of expanding foreign trade.

To develop multilateral trade the DPRK promotes economic exchange and cooperation with three provinces in Northeast China, far eastern Russia and other neighbors and deals with different countries in Asia, Africa, the Americas and Europe. In the new century the DPRK has conducted wide ranging economic exchange and developed trade relations with EU nations, the DPRK's economic and trade relations with the EU nations are developing constantly. In pursuit of diversified trade the government encourages processing export and bonded processing trade and carries on export and import of software and other technological goods as well as transit and consignment trade.

The basic aim in its export policy is to produce and export goods that are in great demand in international markets and constantly improve the country's export structure by reducing the export of raw materials and increasing the export of processed goods.

At present the export of technological goods, especially information technology, is on the increase. The government encourages local companies in export to strengthen export trade. Bases for producing export goods are built while various preferential steps are taken. The basic aim in its import policy is to import raw materials and other materials that the country lacks to consolidate the foundation of the independent national economy and improve the people's living standards and purchase machinery and technologies that are needed in updating and computerizing the national economy.

The government promotes international cooperation and takes necessary measures to improve the country's foreign trade environment and create favorable condition for bolstering up trade relations with other countries on the principle of independence, friendship, equality and mutual benefit.

The DPRK has long cooperated with the UNCTAD, UNDP, ICC and other international economic and trade-promoting organizations.

The government established the D.P.R. of Korea Chamber of Commerce, which is working in close cooperation with the ICC and local chamber of commerce and industry across the world. It has concluded trade agreements, agreements on the promotion and protection of investment, agreements for avoiding double taxation and various international conventions with different countries in the efforts to establish a legal framework for the promotion of trade and investment.

True to the socialistic economic construction policy in the Songun era set forth by the Workers' Party of Korea, the government is speeding up the modernization of the national economy in line with the requirements of the Information Technology(IT) age to bring about surge in the economic construction and, on the basis of this, developing foreign trade constantly.

It will further cement the foundation of the economy and expedite the building of a great prosperous powerful socialist nation by dealing with foreign countries on the principle of independence, mutual respect and equality.

Economy

Economic Growth Rate of the DPRK

1. Overview : In 2001, the Democratic People's Republic of Korea saw 3.7% growth in its economy based on real GDP, attaining positive economic growth for the third consecutive year from 1999.

In 2001, the country focused its efforts on rehabilitation of its economy under such major economic policies as normalization of the infrastructure, expansion of expendables production and nurturing of the IT industry. Thanks to these efforts, social overhead capital and manufacturing facilities in the country were improved, and production in most industries, except for the government service industry, went up across the board.

In the meantime, its crop-raising industry turned for the better as crop yield soared due to favorable weather conditions during the period of maturity, recording a growth rate of 8.2%. The industry recorded a negative growth rate of 7.9% in the preceding year.

2. Trend by Industry The farming, forestry and fishing industry grew 6.8% from the previous year (negative 1.9%). This is ascribed to the following factors. First, the crop-raising industry, which takes up a large portion in the farming, forestry and fishery industry, grew a whomping 8.2% thanks to crop yield expansion caused by favorable weather conditions and increasing foreign fertilizer supply. Second, the fishing industry grew 6.9%, up from negative 1.9% in the previous year, thanks to growth of inland cultivation, in particular.

The country recorded 3.95 million tons of crop yield (based on polished grain), up 10.0% from the previous year (3.59 million tons) as its rice harvest increased 18.0% from the preceding year to 1.68 million tons, and its corn and barley yield also rose. However, its crop yield is much short of its crop requirements.*

* Estimated Crop Requirement of the DPRK for 2002: Approximately 5.36 million tons assuming a 22%-reduction in ration (546g/day per adult) and about 6.26 million tons assuming normal ration (700g/day per person) The overall mining industry grew 4.8% (5.8% in the previous year) as production of nonferrous minerals including limestone and magnesite increased 9.4% and production of coals edged up 1.9%.

The manufacturing industry grew 3.5% from the preceding year (0.9%) on the strength of the efforts to normalize production of the manufacturing industry including modernization and expansion of manufacturing facilities.

In terms of production by sector, the light industry recorded a 2.3-percent increase, driven by increasing manufacturing of beverage, food and footwear. Manufacturing by the heavy industry rose 4.1% thanks to thriving production of industrial chemical products, steel, industrial machinery and nonferrous mineral products.

The utilities industry grew 3.6% from the previous year (3.0%) because of improved operation rates of thermal power plants aimed at overcoming its power crisis, 4.0-percent increase in power generation due to construction of new power plants and expansion of the gas and water industry.

The construction industry grew 7.0% (13.6% in the preceding year) since construction of residential buildings including apartments sharply increased, and civil engineering works including irrigation ditches and electric facilities and construction of non-residential buildings including factories, farms and ranches were also boosted.

The service industry shrunk 0.3% from the previous year (1.2%) due to contraction of the food and lodging industry (negative 5.8%) caused by decreasing tourists, together with the government service industry (negative 0.4%), despite growth of the wholesale/retail industry (4.6%) and transportation industry (3.2%).