Effects should not be resounding for local textile companies, industry analysts say
As the end of the decades-old Multi-Fibre Agreements is set for Jan. 1, Korea's textile industry should aim for better quality and designs to maintain competitiveness, the government said yesterday.
Pledging to lend as much help as possible to the industry, the Ministry of Commerce, Industry and Energy stressed that textiles companies are pressed to develop high-end products and materials if they are to stay in business.
Moving factories to cheaper locations in China and Southeast Asian countries is another solution that company and industry heads have been seeking.
All this is to prepare for an extraordinary change in the world's economy when quota restrictions on textiles and clothing imports disappear between World Trade Organization members.
A visitor looks at displays at a textile and clothing expo in Seoul. Experts say the planned elimination of global textile trade quota is unlikely to seriously hurt Korea as its textile and apparel industry is capable of competing in a niche market with high-end goods. [The Korea Herald]
Over the past few years, the government has launched a series of campaigns to ease the impact of the quota abolition.
Design and export fairs were held throughout the year at both home and abroad, while support was also promised to promote overseas marketing, cheaper overseas distribution channels and research and technology.
The Commerce Ministry also raised more than 2 billion won to develop the textiles and clothing industry this year.
Next year, it plans to inject a fresh 2.4 billion won to promote the sales of Korean clothing and designs abroad.
Thanks to the support and industry-wide efforts, textile exports in 2004 perked up for the first time in three years, increasing 0.2 percent from last year to reach $13.9 billion.
And for Korea, unlike earlier forecasts, experts say the quota eliminiation is unlikely to result in a sudden crash of the industry.
"The United States and European firms will be harder hit, while Korea is in a better situation, as it's textiles and apparel industry is still intact and is still capable of competing in a niche market with high-end goods," said Yun Soo-young, director of the Commerce Ministry's textiles and apparel division.
The quotas that the United States and the European Union will abolish in the coming year account for about 60 percent and 61 percent, respectively, of their total textile imports.
Meanwhile, countries like China and India that are capable of cheap, mass production will benefit from the end of the quota, the Commerce Ministry predicted.
Pressed by mounting concerns among its trade partners, the China Daily reported earlier this month that China recently decided to control its textile exports.
On Dec.12, China's Ministry of Commerce spokesman Chong Quan said that the nation decided to impose export duties on certain textile products.
The world's fastest-growing economy also faces a "safeguard" threat, a provision in the WTO rules that allows any member to limit imports on the grounds that its domestic market will be harmed.
The George W. Bush administration agreed to consider applications from members of the U.S. textile industry to impose safeguard measures on imports of Chinese-made cotton pants, shirts and sheets.