Newsmakers 2012: New Free-Trade Pacts: South Korea, Colombia and Panama
It was a long time coming, but 2012 marked the year that three free-trade agreements went into effect.
South Korea, Colombia and Panama are now free-trade partners with the United States after their trade pacts were negotiated under the George W. Bush administration.
That means more than 80 percent of the goods traded between the United States and these countries are no longer subject to tariffs. In some cases, those tariffs are as high as 32 percent, as with synthetic fabric.
The two most significant free-trade agreements for the apparel and textiles industries are with South Korea and Colombia, both major producers of textiles and clothing. Many of these countries buy U.S. cotton to produce duty-free goods that must come from regional yarns.
The South Korean free-trade pact was the first to go into effect, up and running on March 15.
In 2011, the United States imported $928 million in textiles and apparel from South Korea, an increase from $857.2 million in 2010. The United States exported $417.3 million in apparel and textiles items to South Korea in 2011, up from $397.5 million in 2010.
The Colombia free-trade agreement became reality on May 15. Colombia exports a large quantity of flowers and tropical fruits to the United States. But it is also well-known for its denim mills and apparel factories that produce clothes for major U.S. brands such as Levi Strauss & Co. and stores such as Target.
In 2011, the United States imported $263.5 million in textiles and apparel from Colombia, down from 2010, when the U.S. brought in $291 million in such goods.
But U.S. apparel and textile exports to Colombia were on the rise. In 2011, they totaled $165.2 million, compared with $123.7 million the previous year.
Colombia has been aggressively promoting its apparel and textile factories. In early November, the promotional arm of the Colombian government, ProExport Colombia, held a matchmaking event in Pasadena, Calif., to pair up U.S. brands and stores with apparel sources in Colombia. The event was attended by scores of companies, including JCPenney.
Panama’s free-trade agreement didn’t take effect until Oct. 31, after various tax transparency issues were resolved in the Central American country. The United States only imported $63.5 million in textiles and apparel from Panama in 2011, a bump up from the $50 million in textiles and apparel brought into the United States in 2010.—D.B.