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Inter-Korean Trade Declines

  • Kim Yonho

FILE - North Korean employees, shown in December 2013, sew in a South Korean-owned company at the Kaesong industrial park just north of the demilitarized zone.

FILE - North Korean employees, shown in December 2013, sew in a South Korean-owned company at the Kaesong industrial park just north of the demilitarized zone.

Inter-Korean trade volumes fell more than 10 percent in April amid growing tensions over a wage dispute at the Kaesong Industrial Complex.

According to figures released by South Korea’s Customs Service, trade between North and South Korea reached $211 million last month, a 12 percent drop from March.

The decline in trade is mainly due to a decrease in shipments through the Kaesong complex. The inter-Korean park accounts for 99 percent of the bilateral trade, according to government figures.

South Korean businessmen who run factories at the complex say orders are dropping significantly because of the months-long standoff over a wage increase for North Korean workers there.

“The overall atmosphere is not positive. Some companies are turning to other countries for production,” said Yoo Chang-keun, vice chairman of the South’s Kaesong Industrial Complex Business Association, in a phone interview with the VOA Korean Service Tuesday.

Yoo said buyers are seeking alternatives for production despite increased costs because of concern that the complex might be shut down. In 2013, the complex was shut down for several months over political disputes between two Koreas. Yoo expected that orders would continue to drop unless the two sides narrow differences soon.

The two Koreas have been at odds over the wage hike since last November, when the North unilaterally decided there should be an increase in the monthly minimum wage for its workers at the complex. In February, Pyongyang notified Seoul of tis decision to raise the wage from $70.35 to $74 starting in March. Seoul rejected the demand, calling on Pyongyang to comply with an inter-Korean agreement on the complex. The agreement calls for wage increases to be determined through mutual agreement.

On Wednesday, the North cancelled U.N. Secretary-General Ban Ki-moon’s planned visit to the complex without providing any reason. The visit had raised hope that the U.N. chief could broker a deal to settle the dispute. Earlier, the North rejected the South’s fresh offer of talks to discuss the issue.

Jee Abbey Lee contributed to this report.

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