Monday, January 2, 2012

North Korea’s nuclear program, suspected weapon proliferation, counterfeit of U.S. currency, hostility towards U.S. journalists, and rampant human rights violations have heightened tensions between the adversaries.  Most recently, An Executive Order issued in April 2011, prohibited the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea, and as of February 2011, the U.S. has not provided any aid to North Korea other than a small medical assistance initiative. As Kim Jon Un assumes the leadership position of his late father, policy analysts must reevaluate whether to push for improved communications and trade with North Korea. While there are always gains from trade, trade with North Korea at present offers little utility. With an economy that mirrors the nation’s general volatility, trade with North Korea would be unreliable given the market’s high elasticity. Further, income inequality plagues North Korea, as millions live in poverty while party supporters prosper. With many North Koreans living in destitution, the U.S. would make negligible profit as there is insignificant demand and North Korea's stagnant economy produces limited goods, few of which have potential to benefit U.S. consumers. Given the instability of the North Korean market and limited gains, the U.S. should not open trade with North Korea. 

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