North Korea Opens Areas To Processing Trade Deals

In a move reflecting Kim Jong-il's emphasis on "new thinking," North Korea has adopted a law that would allow all its regions to engage in foreign trade, according to South Korea's intelligence agency.

At a meeting of the National Assembly's Intelligence Committee, the National Intelligence Service unveiled details of North's enactment of a processing trade law that would allow all regions to import raw materials, process them and export manufactured goods. Until now, such trade was limited to the Rajin and Sunbong districts near the Tumen River.

The intelligence agency said the law was designed to increase economic exchanges with foreign countries. "With the new measures, we believe that the environment for foreign companies to enter North Korea has improved," an official said.

Analysts in South Korea took the North's move as another signal that the Communist state was preparing to open its economy to the outside world. Early this year, the North Korean leader visited China, visiting its primary commercial center and showing interest in how its biggest ally adopted reforms.

The law, ratified early this month, was also seen by analysts as a move to designate the western port of Nampo as a foreign trade zone. Other laws approved concern vessel movements at the port as well as copyright laws concerning the introduction of information technology.

"The three laws are aimed at the Nampo region," said Cho Myung-chul, a research fellow at the Korea Institute for International Economic Policy.

by Lee Young-jong