Home / Knowledge / News / Textiles / Chinese textile exports at disadvantage from Korea-US FTA
Chinese textile exports at disadvantage from Korea-US FTA
19
Oct '11
The Republic of Korea-United States Free Trade Agreement (KORUS FTA) is likely to affect China's textile and apparel exports to the US in three areas.

The terms of textile and apparel sector are mainly listed in the second and fourth chapters of KORUS FTA. According to these terms, tariff concession on South Korea's exports to the US, the stringent 'Rules of Origin', and the severe customs border measures are the three areas that are likely to affect Chinese textile and apparel exports to the US.

Currently, textile and apparel items destined for the US are subject to average weighted tariffs of 11 percent and 16.5 percent, respectively. Under the KORUS FTA, the US will completely abolish these tariffs on Korean textile and apparel exports to the US within a decade, in three phases. Thus, after tariff adjustments, Korean textile and apparel exports to the US will enjoy a price advantage of 11 and 16.5 percent compared to its competitors like China. This will result in Korea snatching a share of the US market from China.

Secondly, although the KORUS FTA follows the basic 'Rules of Origin' principles as included in other trade agreements signed by the US in recent years, it also has a 'spinning forward' principle. Under it, each procedure adapted from spinning to finished products must be completed either in South Korea or the United States, to avail the tariff benefit. This clause will remove the 'transit route' for Chinese products to enter into the US market through South Korea.

Thirdly, Article 4.3 of the KORUS FTA explicitly requires South Korean companies to obtain and save all relevant information and documents in production process and circulation. The FTA also gives the US the right to conduct surprise spot checks of South Korea's textile and garment manufacturing units at any time. If during the checks, illegal trade practices are found, then the US can deprive the qualification of preferential tariff measures enjoyed by those products under the agreement. Such severe measures are not commonly imposed by the US in its trade agreements. In this case, it seems the measures are aimed to guard against any opportunities left for the Chinese companies to enter the US market through the Korean route.

Of the three areas, however, the tariff concession given to Korea will have the most direct impact on China's textile and apparel exports to the US.

Fibre2fashion News Desk - China


Must ReadView All

Market share of Indian textile items expand in 13 nations

Textiles | On 11th Dec 2017

Market share of Indian textile items expand in 13 nations

Thirteen countries — Germany, France, Italy, the United States,...

Courtesy: EUBrasil

Textiles | On 11th Dec 2017

Euratex, ABIT welcome negotiations for EU-Mercosur FTA

European Apparel and Textile Confederation (Euratex) and the...

Most firms expect no change in investment plans: CII survey

Textiles | On 11th Dec 2017

Most firms expect no change in investment plans: CII survey

Despite visible optimism in Indian industry with the Confederation of ...

Interviews View All

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.2%
No
12.1%
Skip
18.7%

Total Votes: 91

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
30.8%
Skip
7.7%

Total Votes: 91

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.8%
No
9.9%
Skip
3.3%

Total Votes: 91

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.3%
No
8.8%
Skip
9.9%

Total Votes: 91


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search