North Korea and the Politics of International Trade Law: Kaesong Industrial Complex and WTO Rules of Origin
6 Pages Posted: 5 Apr 2010
Date Written: January 6, 2010
The Kaesong Industrial Complex (KIC), a new joint economic venture between the Democratic People’s Republic of Korea (North Korea) and the Republic of Korea (South Korea), is a manufacturing center in North Korea that uses North Korean labor and South Korean capital to produce labor-intensive products like clothes, shoes and watches. These goods are then shipped to South Korea and either consumed there or exported. The export of KIC goods could be problematic under the World Trade Organization’s (WTO) Rules of Origin and rules on preferential treatment. North Korea is not a member of the WTO, and its human rights record and isolationism make it a highly polarizing state. Through South Korea’s membership in the WTO and South Korean Free Trade Agreements (FTAs), the goods produced in the KIC bypass many of the trade sanctions placed upon North Korean goods. While the issue of the KIC has received some attention in the literature, scholars have yet to scrutinize WTO law and the other legal issues that surround the topic. This piece presents an overview of the KIC and the legal issues it raises, provides preliminary analysis of these issues, and raises awareness of the important policy implications that the U.S. government should consider.
Keywords: International Trade, WTO Rules of Origin, Kaesong Industrial Complex, North Korea, KIC, KORUS FTA
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