International sanctions have been placed on North Korea by a number of nations and organizations. Following its first nuclear test in 2006, North Korea’s nuclear weapons program is currently the subject of numerous sanctions. Before Russia invaded Ukraine, North Korea was the most sanctioned nation in the world.
Numerous nations, including the United States, the European Union, the United Nations, Canada, Australia, Switzerland, Norway, India, Israel, Russia, China, South Korea, and Japan, have imposed numerous sanctions on North Korea. Following international bombings of South Korea by North Korean operatives in the 1980s, such as the Rangoon bombing and the 1987 bombing of Korean Air Flight 858, the United States reinforced sanctions that had been in place since the 1950s. North Korea was listed by the US as a state sponsor of terrorism in 1988.
Introduction to the UK-North Korea economic relations
The prioritization of this cooperation may be explained by more recent changes in the UK’s diplomatic and strategic orientation, even though bilateral relations with South Korea have existed for 140 years. The 2021 Integrated Review (IR) outlined the necessity of implementing an “Indo-Pacific tilt,” which the 2023 IR Refresh stated had been accomplished in the near term but required a longer-term strategic foundation. These texts conveyed the idea that changes in the Indo-Pacific region will disproportionately impact supply lines, the global economy, strategic stability, and state behavior norms.
The fact that the Downing Street Accord comes after similar agreements were signed with Japan and Singapore earlier this year is no accident. However, the possibility of a deeper collaboration with South Korea has some qualities that should distinguish it as an Indo-Pacific priority.
“As two nations focused on innovation, harnessing new technologies, and defending the international rules-based order, the UK and ROK are natural partners,”
according to Prime Minister Keir Starmer. He believes that the intersection of technology and global security is a good place to start when exploring the value proposition.
Overview of trade volume and composition
The administrations of both nations have prioritized technology innovation and policy over the past 12 months. The UK is regarded as a leader in this area in South Korea, especially in light of its increased emphasis on AI safety leadership and its diplomatic achievement of enlisting 28 nations to sign the Bletchley Declaration, which reaffirms a shared commitment to the responsible and safe development of cutting-edge AI systems.
The next Global AI Safety Summit is the ideal platform for showcasing the results of the South Korean government’s desire to collaborate closely with the UK on these challenges over the upcoming months and years.
A notion that dates back to David Ricardo’s work in the early 19th century holds that nations profit from commerce by concentrating on producing or doing the things that they are best at. However, strong and reliable international alliances are essential to meeting governments’ economic and national security goals in a highly specialized field like the semiconductor supply chain. There will probably be a number of chances for the UK industry to profit from the expensive practice of “friend-shoring” in the semiconductor supply chain.
But caution must be taken to prevent the few distinct advantages that the UK does have in semiconductors from spreading to other nations through a well-meaning wish to increase cooperation.
This year has seen significant progress in the bilateral relationship between the UK and South Korea. Because of its ceremonial elements as well as the numerous official agreements, partnerships, and collaborations that are highlighted, a state visit is the pinnacle of any diplomatic mission.
Both nations must refrain from becoming complacent and assuming that the relationship will now work itself out. Such initiatives require bipartisan backing and ongoing cultivation. While some of the agreements made public in the Downing Street Accord are almost instantaneous, others are still pledges or declarations of purpose. In order to sustain the positive momentum created by the State Visit, it is crucial that those comments be formalized into concrete initiatives in the upcoming year.
Recent trends and changes in trade dynamics
Recent patterns in the dynamics of commerce between the UK and North Korea indicate a slight rise in the overall value of trade, along with notable changes in the proportion of imports to exports. In the four quarters ending Q1 2025, the total value of goods and services traded between the UK and North Korea was £33 million, up 3.1% from the year before.
Because fewer products and services were sold to North Korea, UK exports to the country fell 22.7% to £17 million. The amount of products and services the UK purchases from North Korea has surged, as seen by the steep 60% increase in imports to £16 million.
With trade accounting for less than 0.1% of all UK commerce, the UK is ranked relatively low among North Korea’s trading partners, and North Korea is also a modest partner for the UK. FDI from North Korea in the UK decreased 53.3% to £204 million by the end of 2023, while FDI from the UK in North Korea climbed 16.7% to £7 million. Notwithstanding prohibitions and limitations, trade fluctuations like the doubling observed in prior years may be the result of some relaxation or changes in specific industries, although they are still quite small when compared globally.
Key sectors in UK-North Korea trade
Due to severe sanctions and restrictions, key sectors of trade between the UK and North Korea are quite limited; however, data that is currently accessible indicates the following:
- Rubber tires, huge construction equipment, insecticides, and centrifuges are the primary items that the UK sends to North Korea. These products represent specialized agricultural and industrial supplies.
- Pharmaceuticals (vaccines, blood-related products), organic chemicals, plastics, base metal items, electrical and electronic equipment, paper goods, and rubber make up the majority of UK imports from North Korea. This suggests some commerce in products connected to chemicals and medicine.
- Due to international restrictions, trade in these sectors is still very small, with a combined total of only around £33 million in products and services.
- The claimed services trade is either very small or nonexistent.
- Despite their small size, investment flows highlight a few areas, but publicly available data does not show sector-specificity.
Therefore, under strict trade controls, significant sectors are pharmaceuticals and chemical products for UK imports from North Korea and industrial supplies and agricultural chemicals for UK exports, both in very small quantities.
Trade restrictions and sanctions
To limit North Korea’s nuclear weapons and missile programs, the UK has imposed several trade restrictions and sanctions on the country, most of which are in line with UN Security Council Resolutions (UNSCRs). The following crucial actions are part of the UK sanctions regime:
- Coal, iron ore, tin, precious metals, rare earth minerals, textiles, petroleum products, rocket and airplane fuels, and luxury goods are among the items that are prohibited from entering or leaving North Korea.
- Financial sanctions that require prior authorization and limit financial transfers to and from North Korea, particularly for amounts over €15,000. These have a major effect on trade finance and payments.
- limits on the use of aircraft and vessels registered in North Korea, prohibitions on leasing and chartering vessels to North Korea, and a comprehensive arms embargo.
- The Foreign, Commonwealth, and Development Office (FCDO) is one of the UK government ministries that monitors and enforces the comprehensive licensing requirements for any trade-related activities that are prohibited.
- The goal of the sanctions regime is to prevent North Korea from funding and carrying out prohibited weapons programs and from advancing peace and security on the Korean Peninsula.
Tracking illegal trade and sanction evasion, which is still a concern, is part of the UK government’s ongoing monitoring and enforcement of sanctions compliance.
UK export controls and import regulations
You can deal in strategically regulated items that would otherwise be illegal to export with an export license. Goods are regulated based on their characteristics, potential uses, and target market. It is your duty to ensure that you abide by the rules set forth by the UK government when exporting goods from the country. You should know if your products are subject to any export restrictions and if you require any export licenses.
For the export of specified military and dual-use controlled goods to a variety of approved restricted locations, Open General Export Licenses (OGELs) are available. Since you can export indefinitely and only need to register once to begin using them, they are the most versatile and widely used license.
You may be penalized if you violate the conditions of the export licenses you use. These might include a possible jail sentence, fines, or the deregistration of your license. Therefore, your company must establish explicit policies and processes regarding export license compliance, including those pertaining to training, record keeping, and responsibility delegation.
Prospects for UK-North Korea economic engagement
The two nations’ mutual interest in volcanology is one possible avenue of interaction. Because Mount Paektu is an active volcano, geologists fear that an eruption might have catastrophic effects for North Korea. It is predicted to erupt once every hundred years, with the most recent eruption being in 1903.
Similar active stratovolcanoes can be found in the United States, including Mount Shishaldin in Alaska, Mount Rainier, Mount Baker, and the Mount St. Helens explosion in 1980. It is a conduit that may be resurrected and expanded because North Korean geologists have already met with American and British geologists.
Working on mountainsides would keep US scientists away from areas where they could learn a lot about what the North Korean regime would consider sensitive, and the two nations would benefit from being able to compare data and methods. These are the benefits of a joint US-North Korea volcanology project.
North Korea has also researched drought-resistant plants. To address the growing incidence of drought in both nations, the North Korean Academy of Agricultural Science could collaborate with the National Institute of Food and Agriculture of the US government or a preeminent agricultural research university like the University of California, Davis.
Conclusion
The UK continues to pursue a policy of “critical engagement” with North Korea. Critical engagement aims to “improve the situation of human rights in the DPRK” and “uphold the international non-proliferation regime,” much like the EU. The UK continues to “support peace on the Korean peninsula” and calls on North Korea to “show restraint,” as stated in its new Indo-Pacific strategy in March 2023. However, after almost a year, North Korea’s actions show that moderation is not likely to be one of its behavioral choices in the upcoming year.