Attention on North Korean external trade tends to focus on the numbers, the import-export balance or earnings from specific export commodities, such as coal. The most recent spate of United Nations Security Council (UNSC) sanctions was designed to limit export of commodities on the grounds that earnings from these have been funding the Democratic People’s Republic of Korea’s (DPRK or North Korea) weapons programs.

However, in this piece, we will examine trade from the perspective of underlying internal policy discussions, and to some extent, the differences in view about trade as both an economic and a political act. As we have done throughout this series of articles, we rely on Kyo’ngje Yo’ngu and the Journal of Kim Il Sung University, which is also known as Hakpo, as our primary resources.¹Note: 38 North has launched the second phase of the “Understanding Kim Jong Un’s Economic Policymaking” series, which will focus on the external elements of North Korea’s economic policies. This is the first in this series. To review the first phase of the “Understanding Kim Jong Un’s Economic Policymaking” series, which dealt with North Korea’s domestic economic policies, see https://www.38north.org/2022/03/understanding-kim-jong-uns-economic-policymaking-a-review-and-implications/. For those interested in more background on tourism in North Korea, see Dean J. Ouellette, “Understanding the ‘Socialist Tourism’ of North Korea Under Kim Jong Un: An Analysis of North Korean Discourse,” North Korean Review 16, no. 1 (Spring 2020): 55-81, https://www.jstor.org/stable/26912705. These journals have been the North Korean regime’s premier economic journals in which new ideas have been introduced and discussed.

To some extent, trade has been the easiest of the various topics that we have tackled thus far. This is because the discussions in the journals are more straightforward and, with few exceptions, are less centered on ideological axles than others.

In this article, we review these journals’ invocation of the socialist enterprise responsibility management system (SERMS)—Kim Jong Un’s key reform initiative meant to give greater latitude to individual economic units across planning, production, and management of resources and profits—to justify new ideas on foreign trade. We then examine the journals’ handling of diversification, one of Kim’s key instructions related to foreign trade and the sensitivities involved in trading with capitalist countries. Although the views supporting economic reform prevailed for a time in the economic journals, the North’s shift to conservatism in recent years has taken a toll on its trade policy.

Decentralizing Trade

The arguments for and against new ideas about trade that are presented in these journals follow familiar lines. They usually start with providing some orthodox views before pushing against the boundaries of what has been considered acceptable thus far.

Notably, several articles are built on Kim Jong Un’s economic reform initiatives to justify new ideas on trade. For example, two articles in 2015—one published in the July edition of Kyo’ngje Yo’ngu and the other in Hakpo later that year—cited SERMS as supporting the decentralization of the external trade sector and giving greater trade autonomy to individual enterprises. As we noted in an earlier piece, SERMS was mentioned for the first time in a Hakpo article at the end of 2014, but it was not until the spring of 2018 that the two journals started discussing SERMS and its specific aspects in earnest. As such, these two aforementioned articles on foreign trade are among the earliest to use SERMS as a way to advocate for additional new policies.

You can read the full analysis on 38 North.