The Tragedy of Kwangsung Han and the Need for Free Trade

On September 15, 2020, Voice of America (VOA) reported that North Korean footballer Kwangsong Han had been released by his Qatari club, Al Duhail. Han had been a promising prospect who drew great expectations from football fans around the world as a player affiliated with Juventus, one of the most prestigious clubs in Italy’s Serie A. However, because of the North Korean authorities’ demands to seize his salary in order to alleviate the country’s economic difficulties, he transferred on January 8, 2020, to the higher-paying Qatari football league. In less than a year, he was released by his club, and North Korea sanctions have been pointed to as the cause. In December 2017, the UN Security Council adopted Resolution 2397 in response to North Korea’s launch of an intercontinental ballistic missile (ICBM), stipulating that all UN member states expel North Korean workers within their borders. As a result, Han could no longer continue his career as an overseas football player. Footballer Kwangryong Pak, who had been playing for SKN St. Pölten in Austria, was also released in August.

It is generally known that the salaries of North Korean workers employed overseas are almost entirely confiscated by the North Korean authorities. Han’s annual salary at Al Duhail reportedly reached 1 billion won, but it is estimated that the amount actually returned to him each month was only about 2 million won.

UN sanctions on North Korea, led by the United States, are intended to isolate North Korea from the international community and induce it to abandon its nuclear weapons development and aggressive foreign policy. The problem is that these sanctions, as intended, seriously worsen North Korea’s economic conditions and accelerate the economic impoverishment of the North Korean people.

Early sanctions on North Korea were generally directed toward banning arms exports to North Korea, prohibiting transactions with financial companies clearly believed to be controlled by the North Korean authorities, and banning exports of luxury goods in order to block the extravagance of the highest elite, including the Kim Jong-il family. More recent sanctions resolutions, however, amount to comprehensive pressure on the North Korean economy itself. For example, exports to North Korea of resources that are absolutely scarce there yet essential for maintaining its economy and industry—such as coal, oil, iron ore, gold, titanium, and rare earth elements—are all prohibited, as are the employment of North Korean laborers, imports from North Korea, and new joint ventures with North Korea.

Such sanctions may be able to restrain North Korea’s nuclear development to some extent. The key issue lies in the unseen additional costs incurred for that purpose.

We all know that North Korea is not a normal state. No matter how scarce its resources are or how much it suffers from poverty, the North Korean authorities never place their people first. Their priority is the military and nuclear weapons development. This makes it entirely plausible to infer that, the scarcer the resources the North Korean authorities can obtain from abroad become, the more likely they are to intensify their exploitation of the people. If the North Korean authorities can no longer import fuel from overseas for military use, they will seize the fuel that ordinary people need for heating in winter and supply it to the military. Then the North Korean people will suffer from the cold to a corresponding degree. Of course, it is clearly deserving of condemnation that the North Korean authorities starve their people through their military-first policy.

Sanctions on North Korea do not harm only the North Korean people. They also harm foreign entrepreneurs seeking to generate profits through exchange with North Korea. Since North Korea is a rogue state that habitually engages in fraud and blackmail in the international community, doing business with it entails substantial risk. But bearing such risks is the entrepreneur’s own responsibility, and sanctions fundamentally block the very possibility that a potential entrepreneur might both earn significant profits through successful exchange with North Korea and contribute to alleviating the poverty of the North Korean people. American libertarians often oppose U.S. sanctions on Cuba, saying, “More economic sanctions on Cuba mean the United States becomes that much poorer.” The same logic applies exactly to sanctions on North Korea. Even with an economically unimpressive country like North Korea, prohibiting free trade always means becoming that much poorer.

Carmen Elena Dorobăț, an Austrian School economist specializing in international trade, has said that even unilateral free trade is better than not having free trade. In other words, even when the other country imposes tariffs and our country does not—that is, even when we must pay tariffs on exports but do not unilaterally impose tariffs on imports—it is still better than when both parties impose tariffs. Even if North Korea rejects free economic exchange, unilaterally opening the door to North Korea always brings greater benefit than not doing so. The North Korean authorities may refuse exchange with us and maintain restricted trade, but there is absolutely no need for us to erect the same trade barriers ourselves. Sanctions that prevent exports to North Korea not only strengthen exploitation within North Korea but also block the potential utility that could arise through exchange with North Korea.

Moreover, as in the case of Kwangsong Han mentioned at the beginning of this article, sanctions on North Korea block the possibility for North Koreans to live better lives abroad. No matter how tightly Han is controlled by the North Korean authorities, and no matter how much more miserable a career he leads than footballers of similar ability from other countries, it still represents an opportunity to enjoy a quality of life incomparably higher than what he could have if he were playing football or working in some other occupation inside North Korea. Even if Han could not remain in Europe in pursuit of his dream and instead had to play in Qatar, and even if he did not receive the full nominal annual salary of 1 billion won and lived only on a monthly allowance of merely 2 million won, that is still incomparable to life in North Korea, the world’s worst impoverished and controlled state.

For many years, the great libertarian politician Ron Paul has emphasized that the solution to the North Korea problem is not more sanctions and repression against North Korea but the normalization of diplomacy. One distinctive characteristic of libertarianism is that its agenda is not applied only selectively to certain countries or certain periods, but operates universally across time and space. If free trade between South Korea and the United States is good, then free trade between South Korea and North Korea should also be good. The best way to alleviate the poverty of the North Korean people, resolve our security crisis, and expand individual freedom is to promote private-sector exchange with North Korea.

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Original title: 한광성의 비극과 자유무역의 필요성

Author: Kyeong-hoon Kim

Date: 2020-11-26

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=12&idx=23260