WASHINGTON — Apparel brands are set to gain greater flexibility in their sourcing options and potential market expansion for their products with the implementation of a free trade agreement with South Korea on March 15.
This story first appeared in the February 22, 2012 issue of WWD. Subscribe Today.
The U.S. Trade Representative’s office said Tuesday the date has been set, after the U.S. and South Korea completed work over the weekend and confirmed their legal requirements and procedures to bring the trade deal into force.
“In a few short weeks, the promise of the U.S.-Korea trade agreement, including tens of thousands of export-supported jobs with better wages, will start to come home for American businesses and working families,” said USTR Ron Kirk. “President Obama insisted that we get this agreement right by forging a better deal that led to strong bipartisan support in both houses of Congress. Entry into force of this agreement will open up Korea’s $1 trillion economy for America’s workers, businesses, farmers and ranchers, while also strengthening our economic partnership with a key Asia-Pacific ally.”
South Korea was the eighth-largest apparel and textile supplier to the U.S. in 2011, with an import volume of 1.3 billion square meter equivalents, with textiles and home furnishings accounting for more than 95 percent of the total.
Importers acknowledge that South Korea won’t ever become a top platform for apparel production because of high wages, but a majority still supported the trade deal as an opportunity for their exports of finished apparel and footwear into the lucrative South Korean market.
USTR said nearly 80 percent of U.S. exports of industrial products to South Korea will become duty free on March 15. Almost two-thirds of U.S. exports of agricultural products to South Korea, including cotton, will also become duty free on that date. The U.S. textile industry opposed the deal, saying it will open the U.S. market to a flood of cheaper South Korean textile imports that could hurt their business.