The South Korea-US Free Trade Agreement (KORUS FTA), which came into effect from March 15, 2012, will negatively impact Taiwan's textile exports to the US, according to the Industrial Development Bureau (IDB) under the Ministry of Economic Affairs (MOEA).
Lien Yu-ping, head of industrial policy division at the IDB, said the implementation of the KORUS FTA is likely to affect more than US$ 3 billion worth of Taiwanese exports to the US.
He said the textile industry will be affected the most as the FTA will allow several South Korean products to be exported duty-free to the US, which is also one of the major export destinations for Taiwanese goods.
With the FTA taking effect, at least 5 percent or around US$ 60 million of Taiwan's textile exports to the US will be replaced by South Korean items, Lien said.
Taiwan exported textile products worth US$ 1.12 billion to the US in 2010.
Lien said Taiwan and South Korea have been competing in international markets for exporting similar kind of goods.
In its effort to lessen the impact of the FTA on Taiwanese exports, the Government will assist domestic textile producers to develop items that differ from those made in South Korea, Lien revealed.
Fibre2fashion News Desk - India