S. Korea to Allow Trade With North, Official Says

SEOUL — Deputy Prime Minister Rha Woong Bae announced Friday that South Koreans will be permitted to carry on trade with North Korea.

Until now, the mere possession of products made in the Communist north has been illegal and punishable by imprisonment.

Rha urged the government in Pyongyang to reopen talks, which were broken off three years ago, on overall economic exchange as well as on payment procedures in connection with direct trade.

But he said that even if North Korea refuses to respond, South Korean businessmen and ordinary citizens will be permitted to buy North Korean products and sell to Pyongyang indirectly through third countries.

Some Commodities Excluded

However, Rha said, sales by South Korea of military hardware and commodities banned for export to Communist countries under an agreement with the Coordinating Committee for Multilateral Export Controls will be excluded.

And the importation of publications praising North Korean society will also be prevented, he said.

Although the steps are not likely to have a major economic impact, they are expected to have an important psychological effect on South Koreans, who for years have been indoctrinated in anti-communism.

The steps advance the opening to the north that President Roh Tae Woo has proposed in implementing a promise he made July 7 to open trade with North Korea. Last Tuesday, Roh said he was willing to visit Pyongyang and discuss any subject with President Kim Il Sung, including a North Korean-proposed declaration of nonaggression.

“These measures are designed to bring about a de facto economic exchange between the south and north for the interest of all our people even before the resumption of South-North economic talks,” Deputy Prime Minister Rha told reporters.

He said businessmen will be permitted to visit North Korea or meet with North Koreans in third countries--acts that in the past have been prohibited.

The South Korean government, Rha said, will permit visits by North Korean business officials and visits by North Korean vessels, but for security reasons, the government will designate which ports are to be opened to North Korean ships.

Imports from the north, he said, will be treated as internal transactions and will not be subject to tariffs. But labels or other evidence of origin must not be removed from North Korean goods, he said.

Travelers will be allowed to bring back North Korean products from overseas trips, he added.

Rha said revision of the pertinent laws and regulations will be completed by the end of the year. To permit indirect trade to begin immediately, he said, the government will treat trade with North Korea under existing provisions for transactions with other Communist countries.

No Trade Now

Although South Korea has made dramatic breakthroughs in recent months in exchanges and trade with other Communist countries, no trade or exchange of any kind is carried on with North Korea.

South Korea’s global trade is expected to reach $110 billion this year. North Korea’s amounted to $4.1 billion last year.

South Korean manufacturers are known to be interested in buying such North Korean products as iron ore and anthracite coal.

Coincidentally, the government-owned Korea Coal Corp. revealed Friday that between 1979 and 1983 it had secretly purchased 1.2 million tons of North Korean anthracite through an unspecified third country. It did not say why the purchases stopped.