Brazil, North Korea: Brothers in trade
By Bertil Lintner
BANGKOK - For more than a decade, the world around North Korea has been
shrinking. In the wake of its missile and nuclear tests and recent accusations
that it torpedoed a South Korean naval vessel, the list of internationally
imposed sanctions and trade restrictions aimed at isolating the reclusive state
has grown ever longer.
But the North Koreans, who have been in a state of war for more than half a
century, have often found ingenious ways around those restrictions and added
pressures from the United States, Japan and other countries, most visibly seen
in the string of front
companies and bank accounts it maintains across Asia.
Recent indications are that Pyongyang has sought willing trade partners outside
of Asia and its new closest commercial ally appears to be Brazil. Relations
between the two countries have warmed considerably since leftist Luiz Inacio
Lula da Silva became president in January 2003.
The official Chinese news agency Xinhua reported in October 2004 that North
Korea planned to open an embassy in Brasilia, its fourth in the Latin and South
American region after Havana, Cuba, Lima, Peru and Mexico City. On May 23,
2006, the official Korean Central News Agency (KCNA) and the Brazilian media
reported that the two countries had signed a trade agreement.
More recently, the KCNA reported last December that a "protocol on the
amendment to the trade agreement" had been signed in the capital Pyongyang.
"Present at the signing ceremony from the DPRK [Democratic People's Republic of
Korea, or North Korea] side were Ri Ryong Nam, minister of foreign trade, and
officials concerned and from the Brazilian side Arnaldo Carrilho, Brazilian
ambassador to the DPRK, and embassy officials," according to the news report.
China's role in facilitating trade between Brazil and North Korea remains a
matter of conjecture, but it is significant that the state mouthpiece Xinhua
has eagerly reported on the warming of relations between the two countries.
China remains Pyongyang's most important base for all kinds of foreign trade -
legitimate as well as more convoluted business transactions through front
companies in Beijing and elsewhere.
But North Korea also needs more discreet trading partners, as China is often
criticized in international forums for its close relations with the North
Korean regime and is undoubtedly closely watched by Western intelligence
agencies. And it is hardly surprising that Brazil, which is known to harbor its
own nuclear ambitions, albeit for stated peaceful purposes, has emerged as such
a friendly nation to Pyongyang.
Significantly, Brazil has established what appears to be an understanding with
another aspiring nuclear power: Iran. "Also like Iran, Brazil has cloaked key
aspects of its nuclear technology in secrecy while insisting the program is for
peaceful purposes, claims nuclear weapons experts have debunked," according to
an April 20, 2006 Associated Press report.
While Brazil is more cooperative than Iran on international inspections, some
worry its new enrichment capability - which eventually will create more fuel
than is needed for its two nuclear plants [1] - suggests that South America's
biggest nation may be rethinking its commitment to nuclear non-proliferation.
''Brazil is following a path very similar to Iran, but Iran is getting all the
attention,'' said Marshall Eakin, a Brazil expert at Vanderbilt University in
the United States. ''In effect, Brazil is benefiting from Iran's problems.''
In September 2009, Lula declared before the United Nations General Assembly:
"Iran is entitled to the same rights as any other country in its use of nuclear
energy for peaceful purposes." He added to reporters outside the UN General
Assembly, "I defend for Iran the same rights with respect to nuclear energy
that I do for Brazil." He added: "If anyone is ashamed of having relations with
Iran, it's not Brazil."
But it is Lula's budding cooperation with North Korea that is especially
worrying to some Western observers. According to one longtime observer of the
North Korean scene, "Both nations have long-standing ambitions to develop a
nuclear capability as well as missiles and space-launched vehicles. Both have
been the subject of intense US political pressure at times, Brazil on-and-off,
North Korea all the time. And Brazil has access to technology that North Korea
can only dream about."
Because Brazil is not on any international sanctions list, it is easier for it
to obtain dual-use materials. It remains to be proven, however, that Brazil has
served as a conduit for such goods ultimately destined for North Korea.
According to official trade statistics, available at www.stat-trade.com, North
Korea's largest trading partner in 2009 was China, with two-way commerce
totaling US$2.67 billion. That was followed by South-North Korean trade worth
$1.68 billion. A surprising third on the list was Brazil with US$221 million in
two-way trade, well ahead of Singapore, Hong Kong and North Korea's other
traditional Asian trading partners.
The nominal figure may not be impressive in an international context, but it is
substantial for North Korea, a country with an estimated total gross domestic
product of about $22 billion. North Korea's trade with Brazil has recently
increased almost at the pace it has decreased with Thailand, from where it
previously sourced dual-use chemicals, raw materials and machinery. Thailand no
longer figures prominently in recent trade statistics, which is noteworthy
given that their two-way trade reached a record US$331 million in 2004.
Those deals were done under the government of Thaksin Shinawatra, who at one
point even proposed signing a full-blown free-trade agreement with North Korea.
In August 2005, the former Thai premier was formally invited by North Korean
leader Kim Jong-il to visit Pyongyang. The visit never materialized, however,
and when Thaksin was ousted in a September 2006 military coup, Thai-North
Korean relations began to deteriorate. By 2008, bilateral trade between
Thailand and North Korea fell to $76 million and in 2009 dipped further to
$47.1 million.
Among North Korea's more remarkable export items before the September 2006 coup
in Thailand were 1.3 tons of gold and 10 tons of silver. Another pre-arranged
shipment of 12 tons of silver arrived in Bangkok in October of that year.
However, business is now reportedly sluggish at the two main trading companies
that North Korea is known to maintain in Bangkok, Star Bravo and Kosun Export
Import.
Successive Thai governments that have ruled the country since Thaksin's
overthrow are believed to have complied more strictly with international
pressure to restrict dealings with North Korea. In Brazil, however, North Korea
has a long history of involvement with various leftist groups, the distant
offshoots of which are now in power in Brasilia.
North Korea expert Joseph S Bermudez wrote in his 1990 study "Terrorism: The
North Korean Connection":
From 1968 to 1971 the DPRK provided financial
and military assistance to several leftist organizations in Brazil, most
notably to Carlos Marighella's National Liberating Action (Acao Libertadora
Nacional - ALN) and the Revolutionary Popular Vanguard (Vanguarda Popular
Revolucionaria - VPR). By November 1970, the DPRK established a training base
in the Porto Alegre area, where a small number of guerrillas were given
guerrilla warfare, small arms, and ideological training. A small number of ALN
and VPR personnel is believed to have also received training within the DPRK.
Marighella - a Marxist, writer and founder of the ALN - was the leader of a
militant movement that fought against Brazil's US-supported, authoritarian
right-wing governments in the 1960s. In September 1969, the guerrillas even
managed to kidnap US ambassador Charles Burke Elbrick for 78 hours. After his
release in exchange for 15 imprisoned leftists, Elbrick remarked, "Being an
ambassador is not always a bed or roses." Two months later, Marighella was
killed in an encounter with Brazil's police. But on November 4, 2009, the 40th
anniversary of the death of Marighella, Lula declared him a "national hero".
Although ideology may be less important than profits in today's capitalist
world, there are old emotional bonds between North Korea and Brazil under Lula
that should not be entirely discounted. Brazil may be among the countries which
have condemned North Korea's nuclear program, as was shown when, in May 2009,
the Brazilian government called on North Korea "to sign the Comprehensive
Nuclear Test Ban Treaty and to strictly observe the moratorium on nuclear
tests".
But bilateral trade between the two sides is nevertheless - in relative terms -
now booming. In May last year, North Korea's Foreign Affairs Minister Pak
Ui-chun arrived in Brazil to meet with his Brazilian counterpart, Celso Amorim.
Pak expressed Pyongyang's interest in receiving assistance in its deep-water
oil prospecting efforts from PETROBRAS (Brazilian Petroleum Corporation), while
Amorim said his country was reportedly interested in exporting what he referred
to as "farm" machinery.
So far no military hardware, or material that could have military applications,
is known to have changed hands between North Korea and Brazil. But Pyongyang
has found at least one new trading partner which could potentially replace some
of its former business allies in Asia. It's a budding relationship that will be
closely monitored by North Korea watchers in Japan and the West.
Note
1. According to the World Nuclear Association, construction on a third plant is
"imminent", with a 66-month completion date.
Bertil Lintner is a former correspondent with the Far Eastern Economic
Review and the author of Great Leader, Dear Leader: Demystifying North
Korea under the Kim Clan. He is currently a writer with Asia Pacific Media
Services.
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