North Korea empowers trading companies with independent foreign trade authority

In late March 2025, North Korea initiated a significant shift in its economic policies by granting independent trading authority to major trading companies and first-class enterprises under various ministries and central government agencies. This directive from the Ministry of External Economic Affairs symbolizes a broader strategy to stimulate foreign currency earning activities while reducing state intervention in their financial dealings. The new approach allows these companies to pursue trade initiatives tailored to their specific circumstances, which could lead to enhanced engagement with international markets beyond just China and Russia. The directive particularly emphasizes flexibility in trade negotiation, allowing delegation teams of up to ten members to engage with foreign businesses and invite foreign representatives for negotiations within North Korea. This marks a considerable relaxation of prior restrictions that tightly governed the size and activities of negotiation teams, creating a landscape where business officials feel less operationally constrained. Consequently, officials expressed that this is akin to 'removing the handcuffs from officials’ wrists,’ resulting in a more dynamic trading environment. However, it is significant to note that this autonomy is restricted to select entities, primarily those under direct ministry oversight, while lower-level trading companies remain unable to conduct independent business, dependent on higher authorities for their operations. There are concerns regarding potential exploitation where provincial trading companies might impose unfair conditions on lesser entities, leading to calls for equity in trading opportunities. While the government appears to have eased rules for these privileged sectors, intense surveillance from security agencies remains, stifling complete autonomy and maintaining an atmosphere of caution among officials. Therefore, despite these changes, the practicality of capitalizing on newfound trade freedoms is tempered by the continuous oversight from the state apparatus. This directive is perceived as a strategic attempt by North Korea to bolster its foreign exchange reserves, with companies in associated sectors already initiating practical dealings with Russia and the Middle East, establishing collaborations that could favor long-term economic recovery.