A Study On the Introduction of Electronic Commerce Between South and North Korea

남북한 교역 확대를 위한 전자상거래 도입 방안에 관한 연구

Since July 7 mutual declaration in 1988 which is a landmark for South-North Korean relations, Inter-Korean Trade has been set out. During the period, the Inter-Korean Trade has been ups and downs depending on the Inter-Korean relations and economic situation of both countries. South Korea became one of the major three trading countries of North Korea's trading partners in 2000, when the sum of annual trade volume reached the record 425million US dollars. A rapidly increasing number of countries including North Korea are developing national policies and strategies to promote the digital economy, recognizing the potential benefits of e-business as an engine of growth and development. However, the trade structure of South-North Korea remains very simple in terms of its contents. Furthermore trade procedure many limitations especially electronic commerce in North Korea has many obstacles to working properly. The information in Inter-Korean trade cannot be shared in common. South Korean firms have suffered repeatedly trial and error and excessive competition took place among South Korean firms. Institutional inertia related to mutual trade, political and military Impacts on Inter-Korean economic relations, abnormal industrial structure of North Korea and insufficiency of SOC could be mentioned as major problems in Inter-Korean trade as well. Several measures should be taken in order to cope with those problems. First of all, South Korean government should provide valuable information to business firms about North Korean economy and business environments. It is suggested that forums related to inter-Korean trade hold in regular base between South and North Koreas and establish the system of business information sharing. Second, the government should improve various laws and regulations to respond to the realistic needs of inter-Korean trade. That is, detailed measures should be taken to guarantee investment in electronic commerce. Third, it is desirable to start with the mutual agreement between South and North Korea.