The United States has launched a new investigation on possible modifications to some apparel and textile rules of origin in the new US-Korea Free Trade Agreement (KORUS).
A revised version of the bilateral free trade agreement came into effect on 1 January 2019, after being signed in September last year.
While little changed for the textile and apparel sector in the updated pact, the Korean government in October asked for the addition of a some textile products to the short supply list, including
- Certain cotton yarns (HTS heading 5206)
- Viscose rayon staple fibres (HTS 5504.10 and HTS 5507.00)
- Certain woven fabrics (HTS 5408) with cuprammonium rayon yarns (HTS 5403.39), and
- Certain apparel (HTS 6110), accessories and parts (HTS 6117) of certain cashmere yarns (HTS 5108).
If approved, Korean apparel exporters would be able to source these textile materials from anywhere in the world and still enjoy the KORUS preferential duty benefits.
The US International Trade Commission (USITC) is now seeking input on the probable economic effect the modifications would have on US trade under KORUS, total US trade, and on domestic producers of the affected articles. It expects to submit its advice to the USTR by 24 June.
The investigation, ‘US-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin,’ was requested by the US Trade Representative (USTR).
According to the re:source by just-style strategic sourcing tool, KORUS offers qualifying South Korean textiles and apparel, travel goods and footwear duty-free access to the US market.
However, the value of US apparel imports from South Korea in 2018 totalled US$222.8m, a drop of 2.3% on the previous year – with the country accounting for just 0.27% of the US apparel import market share.
