This study investigates the competitiveness of the clothing and textile industry in North Korea, compare to those of China, Hong Kong, India, Indonesia, Japan, South Korea, Thailand, and Vietnam from 1993 to 2010; in addition, it explores the potential cooperation between South Korea and North Korea. First, a revealed comparative advantage (RCA) was used to investigate the competitive performance of clothing and textile industry in North Korea. The results reveal that North Korea and Viet Nam had superior comparative advantages from 1993 to 2010. Second, in order to investigate the factors that affect the competitive performance, depth interviews based on Porter's Diamond of Competitive Advantage were designed and completed by government officers and practitioners working in the clothing and textile industry field. The results show that cheap labor, the stable demand of South Korea and China for basic products, lack of supporting and related industries, and organizational power highly influence the competitive performance of clothing and textile in North Korea. This result provides insight into the potential and limitations of the clothing and textile business. In addition, this study provides a better understanding of the effects of inter-Korean economic cooperation in socialist states.