Trading with a 'rogue state' is something people prefer not to talk about. Which explains why entrepreneurs doing business with North Korea are keeping their mouths tightly shut. After a major nuclear test on Monday and the launch of several short-range missiles on Tuesday, North Korea has now threatened to attack South Korea. These events have done little to improve the international political climate, but trade continues as usual.

US companies are doing it, European companies are doing it and, of course, Dutch companies are doing it as well: trading with North Korea. However, nobody is shouting it from the rooftops.

As a result, few people know that North Korea has a sizeable cartoon industry. US animation icon Walt Disney had cartoons like Pocahontas and The Lion King edited there. And cartoon production company SEK in the capital Pyongyang supplies German, French, Italian, Canadian and Japanese clients.

The North Korean IT sector in particular is much farther advanced than commonly thought. China is putting out many of its IT orders to subcontractors in its controversial neighbour.

Software for the mobile phones produced by the South Korean company Samsung is developed in North Korea. A Swiss data company has its digital data processed there. And the German software developer Nosotek set up a joint venture there in 2007. A Dutch company has put out the development of computer games to North Korean subcontractors.

Trade mission

And yet, most companies would like to remain anonymous. Paul Tjia, director of GPI-Consultancy, organised a trade mission to North Korea last year. He says trading with the country is still a sensitive issue.

"It's a country where the Cold War hasn't ended yet. And once again we find ourselves in a period of mounting international tensions regarding North Korea, instead of détente."

Mr Tjia organised the trade mission in collaboration with the Dutch Centre for the Promotion of Trade and the Amsterdam Chamber of Commerce. However, Amsterdam Economic Affairs Councillor Lodewijk Asscher (Labour Party) had serious political objections to the trip, and Labour MPs asked questions in parliament. The Amsterdam Chamber of Commerce quickly withdrew its cooperation, arguing that too few Amsterdam companies had expressed interest in taking part in the mission.

Politically sensitive the issue may be, but in practice trading with the rogue state North Korea has been going on for quite some time, says Mr Tia:

"The Netherlands has been involved in trading with North Korea since the 1990s. You can see that when you visit the country. It is not unusual too come across a Philips television in your hotel room, or being served Heineken beer at a restaurant."

Potatoes

It's not just the well-trained and very cheap IT workers that are attractive to the Netherlands. Dutch potatoes have also found their way to North Korea. And North Korean researchers are working at the Agricultural University in Wageningen to copy the latest novelties and expand their knowledge in other fields.

The North Korean nuclear tests have done nothing to improve the political climate, but Mr Tjia believes they will have little effect on trade relations:

"No, any possible sanctions will at most effect work related to the military. Ordinary business, particularly relating to sectors such as agriculture, industry, software development or computer games, will never be included."

Adverse sanctions

The consultant is convinced it is better to maintain the trading contacts with North Korea. He believes this will eventually prove to be more effective than sanctions, which would further isolate the country and only have an adverse effect.

Mr Tjia is under the impression that the EU has come to the same conclusion. In any case, he is already planning the next trade mission to North Korea, scheduled for next autumn.

* RNW translation (gsh)