Amendment Effective August 1 Domestically
"Expecting Expansion of Korean Companies' Entry into the US Market"
Starting next month, copper ammonia rayon fabrics will be eligible for duty-free benefits when exported to the United States. Copper ammonia rayon fabric is a high-quality textile made by recycling the fine fibers (cotton linters) attached to cotton seeds, known for its excellent texture and luster, and is used in high-end dresses, shirts, and linings.
The Ministry of Trade, Industry and Energy announced on the 4th that the amendment to the Korea-US Free Trade Agreement (FTA) origin criteria for copper ammonia rayon fabrics is scheduled to take effect domestically on August 1. This follows the exchange of written notifications on the 2nd of this month confirming that both Korea and the US have completed the legal and procedural requirements for revising the FTA origin criteria.
During the 2018 FTA revision negotiations, both Korea and the US agreed to amend the origin criteria to allow the use of non-origin yarn for copper ammonia rayon fabrics, which was identified as a product lacking regional raw material supply. After detailed discussions between the two countries, the revision process has now been completed.
The origin criteria for textile fabrics under the Korea-US FTA currently mandate the use of regional yarns from the start. However, with the enactment of this amendment, fabrics manufactured in Korea using non-Korean and non-US copper ammonia rayon yarns will be recognized as Korean origin when exported to the US, thus qualifying for duty-free benefits.
Accordingly, the Ministry of Trade, Industry and Energy expects that price competitiveness for exports to the US will be secured for this product category, potentially expanding the market entry of Korean textile companies in the US.
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