DATE=6/20/2000
TYPE=BACKGROUND REPORT
TITLE=SANCTIONS / U-S BUSINESSES
NUMBER=5-46520
BYLINE=ALISHA RYU
DATELINE=HONG KONG
CONTENT=
VOICED AT:
INTRO: The United States partially lifted decades-old
economic sanctions against North Korea Monday,
allowing U-S companies to seek out investment
opportunities. But -- as V-O-A's Alisha Ryu explains
from our Asia News Center in Hong Kong -- experts are
skeptical about communist North Korea's readiness to
embrace even a limited form of capitalism.
TEXT: U-S sanctions against North Korea date partly
from the early days of the Korean War, 50 years ago,
when the North invaded South Korea. Since then, nearly
all U-S trade, travel and financial transactions with
North Korea had been banned.
Last September, when the Clinton administration
announced it was willing to ease sanctions as a reward
for a North Korean freeze on long-range missile tests,
U-S companies viewed it as a long-awaited opportunity
to penetrate one of the last closed economies left in
the world.
The president of the American Chamber of Commerce in
South Korea, Jeffrey Jones, says there are good
reasons why American companies would want to invest in
a country that is emerging from years of political and
economic isolation.
/// JONES ACTUALITY ///
One, it is a new market. Consumers will be loyal to
those companies that go first and establish their
brands and images in the minds of the consumer.
U-S companies have billions of dollars invested in the
economy here in South Korea and for the good of the
economy here in the event of reunification, it is in
our interest to ensure that the economy in the North
is properly developed.
/// END ACTUALITY ///
Mr. Jones says his office in Seoul has already
assembled a group of well-known U-S companies ready to
open talks with North Korean officials.
/// JONES ACTUALITY ///
Included among those who have indicated that they
might be interested are Motorola, Procter & Gamble and
a textile manufacturer, P-B-M-S, which supplies
garments to the Gap, Liz Claiborne and other retail
outlets in the United States.
/// END ACTUALITY ///
Monday, former U-S ambassador to South Korea, Donald
Gregg, confirmed that six other large U-S firms are
planning a trip to Pyongyang in the near future to
discuss launching commercial projects in the North.
But long-time North Korea watcher and consultant
Michael Breen thinks what those companies will likely
encounter in North Korea are not endless opportunities
but stubborn resistance.
/// BREEN ACTUALITY ///
In terms of longer-term actual business, I am
wondering how much will actually get done. North
Korea has not suddenly opened its door. The U-S has
actually decided to allow American companies to do
business with North Korea. So, those companies will
find themselves dealing with communist officials who
view capitalists and their profit-motives with deep
suspicion and dislike. What the North Koreans really
want is our money but they really do not want us
coming along with it.
/// END ACTUALITY ///
Even if U-S companies can overcome the bureaucratic
obstacles, Mr. Breen predicts investment and trade
with the United States will pick up very slowly, at
best. He says widespread poverty will limit how many
goods and services North Koreans can afford. And the
inferior quality of goods the North produces will have
few buyers for them in the United States.
Mr. Breen warns Americans should not view North Korea
and its leader, Kim Jong Il, with the same type of
optimism as they did when China threw open its doors
to trade in the 1980s under the late Chinese Premier
Deng Xiao Ping.
/// SECOND BREEN ACTUALITY ///
Kim Jong Il is not Deng Xiao Ping. He has not
rejected the past, turning to a more capitalist
future. He is still, for all intents and purposes, a
socialist leader of a communist country. And that
fact alone will make it very difficult and very
frustrating for companies.
/// END ACTUALITY ///
Still, Jeffrey Jones at the American Chamber of
Commerce says he believes the rewards of dealing with
North Korea could outweigh the risks.
/// JONES ACTUALITY ///
We are not being unrealistic about what to expect up
there, but we have to start the process at some point.
/// END ACTUALITY ///
According to the South Korean Trade Ministry, some 135
South Korean companies are currently doing business
with the North, generating a modest 330-million
dollars in trade per year. (Signed)
NEB / AR / WD
NEB/
20-Jun-2000 07:17 AM EDT (20-Jun-2000 1117 UTC)
NNNN
Source: Voice of America
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