North Korea’s Trade in Latin America and the Caribbean

Part of the Trump administration’s “maximum pressure and engagement” strategy towards North Korea has been to isolate Pyongyang as much as possible on the international stage. The effort appears to be paying off as in the last few months as a number of countries have expelled their respective North Korean ambassadors, severed diplomatic ties, or cut off trade.

A few months ago, I looked at North Korea’s diminishing relations in Southeast Asia, which has a number of small but relatively important relationships for North Korea. Today, I look at North Korea’s economic relationships in the Western Hemisphere, which mirror regional trends elsewhere: North Korean trade is drying up and countries are increasingly weary of engagement with North Korea in general.

North Korea’s trade with Latin America shrunk from its peak of $979 million in 2008, to $103 million in 2016. For comparison, China conducted over $6 billion in trade with North Korea in 2016. In the graphs below, I’ve listed the top six Latin American and Caribbean countries with the highest cumulative trade from 1996-2016 as well as total figures for Latin America and Caribbean trade. Interestingly, North Korea has been running trade surpluses in Latin America in most years in this sample. This bucks the trend of North Korea’s global trade, where it has for years been running deficits—and particularly high ones recently—most importantly with China.

North Korea may be partly using exports to Latin America to pay for its imports elsewhere but that isn’t the main story the graphs above tell. The trade is small and its surplus in Latin America has been shrinking in recent years even as its overall global trade deficit increases. KOTRA estimates North Korea ran a $905 million global trade deficit in 2016. And caution is warranted in analyzing the above data for a few reasons: First, data emanating from countries such as Venezuela and Cuba should be taken with a grain (or rocks) of salt. Second, the possibility that a customs official checked the wrong Korea box is real (See recently the case of Luxembourg where I suspect this might have happened).

Caveats aside, the data show North Korea’s trade is shrinking in Latin America. These data of course exclude illicit trade, although compared to its relationships in Asia, the Middle East, and Africa, North Korea appears to have shallower illicit networks in Latin America. The recent UN Panel of Experts report from September—which tracks North Korea’s illicit activities across the world—had very little to say on Latin America. But in 2013, Panama famously seized a North Korean ship en route from Cuba to North Korea hiding military wares underneath Cuban sugar. Surely, North Korea is still in the game.

In the chart below, I’ve taken timely data from the North Korea in the World Project and listed the countries in Latin America and the Caribbean which maintain diplomatic relations with the DPRK; I count twenty-one countries. But if using the presence of embassies in each other’s country as a proxy to measure the strength of relations, the picture in Latin America looks bleaker for North Korea. There are only two Latin American countries which operate embassies in Pyongyang—Brazil and Cuba—and five that permit Pyongyang to run embassies in their countries. More, two of the countries which have DPRK embassies are cracking down: Mexico and Peru have recently downgraded their relations with the DPRK and declared their respective incumbent North Korean ambassadors persona non grata.

This reflects growing international pushback against North Korean military provocations and the recognition—indeed codified in last year’s UN Security Council resolution 2321—that North Korean embassies abroad are used for illicit activities. It really should be no surprise that North Korea has about twice as many embassies abroad as countries have embassies in Pyongyang. The metropoles are turning the screws as well as in the last month Spain expelled its DPRK ambassador and downgraded relations, and Portugal cut ties altogether.

Latin American countries that maintain diplomatic relations with the DPRK      
  Date Relations Established DPRK has embassy in? Has embassy in DPRK? Notes
Antigua & Barbuda 1990 No No  
Bahamas 1991 No No  
Barbados 1977 No No  
Belize 1991 No No  
Brazil 2001 Yes Yes  
Chile 1972 No No Relations suspended in 1973, later resumed
Colombia 1988 No No  
Cuba 1960 Yes Yes  
Dominica 1991 No No  
Dominican Republic 2007 No No  
Grenada 1979 No No Relations suspended in 1985, later resumed
Guatemala 2007 No No  
Guyana 1974 No No  
Jamaica 1974 No No  
Mexico 1980 Yes No DPRK ambassador expelled, relations downgraded in 2017
Nicaragua 1979 No No  
Peru 1988 Yes No DPRK ambassador expelled, relations downgraded in 2017
St. Kitts & Nevis 1991 No No  
St. Lucia 1979 No No  
St. Vincent & the Grenadines 1990 No No  
Venezuela 1974 Yes No  
  Source: North Korea in the World (National Committee on North Korea and East-West Center)   

As in much of the world, it’s less and less worth it for Latin American countries to maintain normal relations with Pyongyang. That said, Venezuela and Cuba are certain to remain friendly with Pyongyang and as a recent run-down on DPRK-Latin America diplomacy from Statfor notes, Brazil and Chile have particular economic interests—not with North Korea—but with China, to stay neutral. Was there any doubt that this would somehow come back to China?

Authored and published by the contributors at the Peterson Institute: https://piie.com/blogs/north-korea-witness-transformation/north-koreas-trade-latin-america-and-caribbean