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FTA with Korea may adversely affect textiles - NCTO

23 Jun '07
2 min read

Chairman Pearson and members of the Commission, thank you for the opportunity to testify. My name is Cass Johnson and I am the President of the National Council of Textile Organizations (NCTO).

The U.S. textile industry is one of the most highly-automated and advanced manufacturing sectors in the country and among the most export oriented.

U.S. textile companies invest on average 50 percent more capital in new plants and equipment as the rest of U.S. manufacturing. The U.S. textile industry is also the third largest exporter of textile products in the world.

Unfortunately, foreign governments such as China, and, to an lesser but still significant extent, Korea, have long inserted themselves in their respective textile sectors and, as a result, the U.S. domestic industry continues to lose thousands of jobs annually due to unfair competition and inadequate enforcement of our trade agreements.

The proposed U.S.-Korea FTA is a major issue for the U.S. textile industry. In contrast to FTAs of recent years, the Korean FTA is the first agreement since NAFTA where the country in question has a large developed textile sector which exports significant amounts of textile products to the United States.

As a result, NCTO member companies have been carefully reviewing the textile portions of the agreement; however, the NCTO Board has not yet met to take a position on the agreement.

Industry Concerns:
As an overall concept, the notion of an FTA with Korea has been problematic for the U.S. textile industry. Since Korea is a large textile-producing country with a vertically integrated industry which has historically enjoyed extensive support from its government, NCTO members have repeatedly stated they do not expect significant new export business to be generated from an FTA.

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