Differences In Standards Of Origin Affect Korea's Textile And Apparel Exports To The US

The FTA and the Korea US FTA, which came into force in July and October this year, began to play their due role in the expectation of all sectors. However, according to the latest data released by the Ministry of economic affairs of Korea, the two major free trade agreements (FTA) have different effects on the Korean textile industry in the recent period. South Korea's exports to EU textile and clothing increased by about 17%. Meanwhile, exports to the United States decreased by 1.1% compared with the same period last year, that is, before the agreement came into force. This phenomenon has caused great distress to Korean textile enterprises.

Insiders pointed out that the reason for this phenomenon is that the two markets have different regulations on the origin of raw materials for export products. In the Korea us FTA agreement, the criteria for determining the origin of raw materials that can enjoy preferential tariffs are very meticulous and strict, while the Korean and European FTA agreement stipulates that even if imported yarns are used for manufacturing in Korea, they can still enjoy the relevant tariff preferences. Because of the great difference in the standards of origin certification between the two major agreements, the main textile and textile import and export enterprises in South Korea have taken great pains in raw materials utilization and certification. The relatively strict Korean American FTA agreement has affected the quantity of textiles exported to Korea to a certain extent.