FOR IMMEDIATE RELEASE

Contact:

Karl Spilhaus
(617) 542-8220
kspilhaus@nationaltextile.org

NTA Sees Little Value to American Manufactures in Korea FTA

BOSTON, April 19, 2007 -- "We see little potential for benefit to U.S. textile manufacturers in this FTA," said Karl Spilhaus, president of the National Textile Association in response to the announcement that U.S. and the Republic of Korea has concluded negotiations on a free trade agreement which must now be presented to congress for approval.

"Our textile and apparel trade with Korea is extremely one-sided," said Spilhaus, "and we don't see how this agreement will improve that." In 2006 Korean exports to the U.S. of textile, apparel, and made-up articles totaled $1.7 billion, mostly in valued-added products such as knitted and woven fabrics, cotton hosiery, and other apparel of cotton and man-made fibers. While U.S. exports to Korea were only $287 million and were mostly in raw materials (cotton) and intermediate goods (artificial filament tow and yarn).

Korea is tied with Italy for sixth place as a source of U.S. imports of yarns and fabrics, with 2006 trade totaling $753 million. With duty-free access under the terms of this FTA, Korea's exports to the U.S. are expected to rise, resulting, in all likelihood, in a Korean-U.S. bilateral textile trade imbalance greater than the current six-to-one ratio. While the FTA will give goods of Korean origin duty-free entry into the U.S. market, it should be noted that U.S. exports to Korea will still be subject to a 10% Value Added Tax (VAT) when shipped to Korea. "It is downright misleading for our U.S. officials to speak of zero-for-zero duty reductions," said Spilhaus, noting that the U.S. imposes no VAT on imports from Korea.

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