By  on December 6, 2010

WASHINGTON — Apparel importers and retailers welcomed the finalization of a long-stalled free trade agreement between the U.S. and South Korea, but the accord is opposed by American textile interests and still has to be approved by the legislatures in both countries.

Launched under the Bush administration in 2006, the U.S.-Korea Free Trade Agreement was held up over how autos and beef would be treated.

The accord, which has been watched closely as a barometer for the Obama administration’s stance on trade, has a strict rule of origin and would lower duties on some apparel and textile products made of materials from either the U.S. or South Korea.

“We think this could represent the beginning of a more active trade agenda for the Obama administration,” said Julia Hughes, president of the U.S. Association of Importers of Textiles and Apparel. The agreement with South Korea doesn’t give apparel importers and retailers everything they wanted, but completion of the pact is an important step forward, she said.

The American Apparel & Footwear Association and Wal-Mart Stores Inc. issued statements over the weekend hailing the agreement as a positive for the industry.

South Korea is the eighth-largest textile and apparel supplier to the U.S. The U.S. imported 1.45 billion square meter equivalents, valued at $806 million, of textiles and apparel from South Korea in 2009, mostly in textiles. Two-way trade in goods and services between the U.S. and South Korea in 2009 totaled $87 billion, $68 billion of that in goods.

The domestic textile industry has opposed the agreement because they said it favors South Korean producers and would harm U.S. textile and apparel companies.

“The industry cannot support an agreement that is so tilted in favor of [South] Korean textile exporters,” said Cass Johnson, president of the National Council of Textile Organizations.

The full text of the agreement was not available over the weekend.

The trade pact requires Congressional approval before it can be signed by President Obama. Legislators in South Korea must also approve the agreement.

Speaking on Saturday, President Obama said the agreement’s provisions for protecting worker rights and the environment made it “an example of the kind of fair trade agreement that I will continue to work for as President, in Asia and around the world.”

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus