U.S. lifts sanctions on North Korea

A North Korean flag flies over its embassy in Beijing.

TEXT OF INTERVIEW

Bob Moon: The Bush Administration took a first step today toward relaxing certain economic sanctions on North Korea.

Now that the country has finally handed over an accounting of its nuclear activities, the White House has decided to ease some restrictions on imports and on financial transfers to North Korea.

Still, foreign policy experts say the move is largely symbolic and won't have much effect on trade right away.

David Kang is a professor of government at Dartmouth College. He studies U.S. policy in Asia, including North Korea.

Professor Kang, thanks for joining us.

David Kang: My pleasure.

Moon: What exactly will the United States be giving to North Korea? Is it a good deal for both sides?

Kang: This stage is a good deal for both sides. What the United States is going to do is in many ways more symbolic than actual. They're going to take them off the Trading with the Enemy Act and the State Sponsors of Terror which won't actually change North Korea's economic life because North Korea will remain sanctioned under a whole bunch of other sanctions the U.S. has on them -- they're still going to concerned with trying to find something to eat tomorrow. What it does do is raise the possibility that down the road the World Bank or actually just regular businesses could begin to start getting involved in North Korea's economy. And of course, the U.S. has gotten what is supposedly a complete declaration of North Korea's nuclear program and its activities.

Moon: When it comes to the complexity of getting these sanctions lifted, is this the first domino? Is there going to have to be more to come?

Kang: Yeah, it's not as if President Bush can sort of wave a magic wand and tomorrow North Korea is off the Trading with the Enemy Act and the State Sponsors of Terror. It's a long bureaucratic process and all the different agencies -- State Department, Defense, CIA -- have to weigh in and go through their own processes to determine that they think North Korea is no longer a state sponsor of terror. They actually began this process last year, but it still has to go through a number of steps. A number of the sanctions are put in place by Congress and so if Congress has put them in, Congress has to pass another law to take them out.

Moon: A lot of Pyongyang's economy has been driven by the black market, from nuclear energy to counterfeit dollars. Is there going to be more legitimate trade now, less shady stuff, going on?

Kang: In many ways, what I would call the black market is really sort of goods that come in from China, some from South Korea, where the citizens are now concerned about trying to get enough to eat and survive the coming winter and there's suspicions that this summer's harvest will not be actually that good. So some of this is "illegal" or "illicit" activities, but a lot of it is simply activity that's going on outside of the North Korean government.

Moon: Even if the easing of the trade restrictions allows North Korea to borrow from the World Bank and other international institutions, will they lend to them?

Kang: Probably not, again in the short term. There's so many other issues that North Korea has in front of it that I don't think any of the international institutions or private businessmen are actively looking at North Korea right now. I mean, the long-term goal is to actually make North Korea sort of this place where you could actually have trade that would go between China, Japan and Russia and there's talks about a railroad, relinking a railroad that would run through North Korea to South Korea, but all of that is very much down the road. Right now, I think people are cautiously optimistic, but the economic prospects in North Korea are, at this point, very minimal.

Moon: But at least there's some engagement now.

Kang: Yeah, this should also be seen as a positive step forward and so I don't want to minimize the success, but this is not an ultimate transformation.

Moon: David Kang is a professor of government at Dartmouth College. Thanks for your insights.

Kang: My pleasure.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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