Sanctions seen having little impact

Japan-North Korea trade already at a low level, experts say

by Eric Johnston

OSAKA — Although calls in Japan for tough economic sanctions against North Korea will no doubt grow following Monday’s nuclear test, economists say stopping the flow of goods between the two countries would have more political meaning than economic.

“Trade between Japan and North Korea has been in decline for many years. Money continues to reach North Korea from Japan through accounts in other countries,” said Mitsuhiro Mimura of the Niigata-based Economic Research Institute for Northeast Asia.

“The number of North Korean ships visiting Japan has fallen way off in recent years. Banning all North Korean ships to Japan wouldn’t have much of an economic impact, although it would send a strong political message,” Mimura said.

As North Korea’s trade with Japan has declined, its trade with other countries, particularly China and Russia, has shot up.

Japan’s trade with the communist nation has been dropping steadily since 1985, when it stood at more than 115 billion yen, of which direct exports accounted for 59 billion yen, according to a report compiled by Mimura based on trade statistics from the Finance Ministry.

By 2005, direct trade with North Korea came to about 21.4 billion yen, with exports accounting for about 6.8 billion yen and imports amounting to about 14.5 billion yen, the report says.

As the total value of Japan’s international trade in 2005 was better than 122 trillion yen, North Korea’s piece of the pie was less than a tenth of 1 percent.

Of the 6.8 billion yen in exports to North Korea last year, large and small trucks, cars, and buses accounted for nearly 2.8 billion yen, or 40 percent of the total. But many of those pushing for sanctions are more worried about smaller items.

“Certainly, trucks can be converted to military use, but Japan is also exporting items like high-quality electronic cables and basic electronic devices that can diverted to the military,” said Shiro Mizugi, a member of the Fukuoka Municipal Assembly who has lobbied hard to ban North Korean ships from entering his city.

In 2005, exports of cables and basic electronic devices accounted for roughly 350 million yen, or about 4.5 percent, of the total.

Of North Korea’s exports to Japan, seafood products totaled roughly 4 billion yen in 2005, or 26 percent of the total, making this category the largest and most important for Pyongyang.

In recent years, such products have been targeted by Japanese citizen groups for boycott. But fisherman’s unions have noted that it is nearly impossible to impose a total ban on North Korean products from the Sea of Japan because it is relatively easy for North Korean seafood to be passed off as Chinese or South Korean in origin.

Smokeless coal was the largest single imported item from North Korea in 2005, accounting for nearly 2 billion yen, or 13 percent, of the total. “Matsutake” mushrooms were in second place, accounting for about 1.7 billion yen, or 11 percent of the total.

Although Japan is more important to North Korea than vice versa, China remains North Korea’s main trading partner.

The Korean Trade-Investment Promotion Agency in Seoul estimated earlier this year that North Korean trade with China amounted to nearly 1.8 trillion yen last year.

Without active Chinese participation, most experts warn, Japanese economic sanctions will be highly limited in reducing the flow of goods and money to North Korea.