1. The traditional method of analyzing various problems involved in the foreign trade of a country and of determining factors of those problems is, in large part, not applicable to North Korea. The Soviet Union and East European Communist countries have, since the second half of the 1850's, shown a trend of adopting policies designed to rationalize their foreign trade: e.g.; decentralization, abolition of strict separation of trading business from industries, and extension of planning; thus relaxing the seriousness of the effects of those problems, North Korea, however, period still stands outside of this trend.
2. One of the most noteworthy factors which determines foreign trade policy of North Korea is the so-called "policy for self-supporting economy." This policy was first formulated as a result of the influence of the Stalinism which advocated that "all nations must have a certain consolidated industrial system for their own. "The emphasis on this policy has been further increased as North Korea's relations with the Soviet Union in the fields of politices, economics and military science became weak. Because of the over-exaggerated belief on autarky held by the leaders of North Korea, the profitablity in foreign trade has been disregarded, and at the same time the investment program of the country has been established without considering the profitability. The profitability in foreign trade is ignored in North Korea in proportion to the emphasis she gives to political consideration in establishing her foreign trade plans. In selecting foreign trade items and in establishing priority among them, the optimum structure for foreign trade is often desregarded because of the emphasis on the autarky policy. Throughout the period covering the Five Year Plan(1958~61) and the Seven Year Plan(1961~67) the top priority items for import have been machinery and plants. It is, however, notable that North Korea, in importing machineries and plants, is making positive efforts to approach West European countries and Japan in recent years.
3. In selecting counterpart countries for trade, North Korea considers political factors as economic factors. What is worthy of note in this respect is the fact the North Korea, which was generally contended with the bilateral trade relations with the Soviet Union in the 1950's began, from the early 1960's, openly to against the policy of depending on only one country, criticizing interference of domestic affairs by the Soviet Union, thus gradually, though there is still a limit, adopting a multi-lateral trading policy.
4. The foreign trade structure of North Korea has been modeled after that of the Soviet Union with Some modification. Therefore, the problems found in the Soviet style of trading structure are inevitably noticable in North Korea. For example, production and foreign trade are determined not by the maketing mechanism but by bureaucracies both in North Korea and the Soviet Union Various problems arise from this very fact. The most serious problems found in the foreign trade of north Korea are the facts that its program is based on unreal ground, the profitability is ignored, and there is no flexibility in implementing the program. These facts resulted from the extreme centraization in formulating trading program, separation of foreign trade from her industrial structure and from the practice of programming the plan on a short term basis.
5. The amount of foreign trade in North Korea has increased from $182,250,000(total amount of import and export) in 1949 to $ 415,680,000(estimate) in 1964. For several years following the end of the Korea War, North Korea depended entirely on the aid of the Soviet Union, Communist China and other Communist countries for her economic rehabilitation and development. Because of this the trading amount of North Kora reached pre-war level only in 1957. A relatively rapid increase in the amount of foreign trade from 1958 is attributable to the fact that the degree of dependency on foreign aid drastically decreased from the beginning year of the Five Year Plan(1957) and the fact that North Korea has undertaken a positive diplomatic compaign toward neutral nations in Asia and Africa putting emphasis on establishing trading relations with them as well as to the fact that North Korea has begun developing trading relations with Japan and other West European countries.
6. The study on the composition of trading items and on its changes reveals that the weight of raw material among export items is relatively decreasing while that of processed goods is gradually increasing. In the composition of import items, on the other hand, the weight of machinery plants and finished goods gradually decreasing while the proportion of machinery plants and finished goods are gradually decreasing while the proportion of raw material in it is increasing. This may reflect the fact that the level of industrial development in North Korea is increasing.
Nontheless, North Korea still remains backward industrially when we consider that minerals, steel, nonferrous metal and agricultural products occupy 72.5% of the total export amount(1964), while capital goods and industrial products including machinery plants and chemical products occupy about 60% of the total import amount.