T^ÏSS^SM INFORMATION RECEIVED BY THE TECHNICAL SUB-GROUP IN RESPONSE TO GATT/AIR/UNNUMBERED A AND B. Addendum KOREA

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1 GENERAL AGREEMENT ON RESTRICTED T^ÏSS^SM TARIFFS AND TRADE Special Distribution Texti Les Committee Original: English Sub-Committee on Adjustment INFORMATION RECEIVED BY THE TECHNICAL SUB-GROUP IN RESPONSE TO GATT/AIR/UNNUMBERED A AND B Addendum KOREA Adjustment Measures in the Textiles and Clothing Sectors ' A. Autonomous adjustment processes (a) What autonomous adjustment processes have been identified ( 1) Facilities and Production In, there were 4,146,556 spindles operating in the spinning facilities, and the total chemical fiber production reached 1,369 MIT per day, showing slight increases of 1.1% and 5.37c over the previous year, respectively. This reflects that investment was not made much for the expansion of textile facilities in. mainly due to the deteriorated economic recession, home and abroad. Along with the slight increase of textile facilities in, the I textile production showed a declining trend, the spun yarn and chemical fibers increasing by mere 1.9% and 12.7% over the previous year, respectively

2 Spinning Facilities and Capacity for Chemical Fibers ^ ^^^ Year Classification^~~^~~^^^ ^ ^ ^ (%) ^ Spinning Facilities (Spindles) Cotton Spinning Worsted Spinning Woolen Spinning , ,192, Total Capacity for Chemical Fibers (MT/D) Nylon Polyester Acrylic Viscose Acetate Others Total , ,

3 s - Textile Facilities for Looms, Knitting Machines and Others (Unit Set) "^-v^ Year Qassification^^-^^^ ^- (%) s< Cotton Loom , , Filament Loom 50,067 54, Wool Lcx>m Embroidery Ixtom Towel Loom , Knitting M/C (Circular Knitting) (Flat Knitting (Warp Knitting) (Socks & Stockings) (Gloves) , , , ,899 3, ,008 8, , Sewing M/C , , , Dyeing M/C ,778 3, Twisting M/C (Spindle) 122, , ,

4 Yams (M/T) Classified tiu Year Cotton Yarn Worsted Yam Woolen Yarn Production of Textile Yarns, Fabrics and Chemical Fibers 251,158 15,083 11, , , ,181 15, , ,872 23, ^ ^ ^ (%) ^ ) O ID 3 n> H *- m x > a Q- Fabrics (1.000m 2 ) Cotton Fabrics Worsted Fabrics Woolen Fabrics Silk Fabrics Rayon Fabrics Synthetic Fabrics ,200 12,590 11,289 54, , ,954 32,445 15, , ,020 13,525 58, , ,044 62, , Chemical Fibers (M/T) Nylon Polyester Acrylic Viscose Acetate Others ,241 5, ,538 7,652 7, , ,159 21,541 7,758 7, ,438 7,466 3, , ,847 24, Total 382, , , Note : Cotton Yarn & Fabrics include Cotton Blended Yarn & Fabrics. Worsted Yam & Fabrics include Wool Blended Yarn & Fabrics. '

5 C0M.TEX/32/Add.11 Page 5 (2) Employment In, the employment of the textile industry in Korea reached 795,405 persons, showing 8.6 per cent increase over the previous year. Especially, the weaving sector was outstanding with an increase rate of 37.6 per cent. The textile industry in Korea still maintains the important position in employment, accounting for 27.7 per cent of the total manufacturing employment in. This trend of the employment of the textile industry in Korea is anticipated not to decrease further in the near future. Textile Employment Within Overall Industrial Employment (Unit: Penora) ^~~~~-^^^ Year Closuflcmltun ^^~-~-^^^ ys Total Employment (A) , , , , Manuftclunnt InJutiry (B) 2.798, Textile Industry (C) , , , a/a Ratio 1*1 C/A C/B

6 Textile Employment by Sector TJ r> CD o (Q 3 fd -I o* m x (Unit: Person: > Q_ Sector Year Increase or Decrease (A) ^-"" (%) Total 732, ,405 62, ,6 Garment production 368, Spinning 118, ,063 A J, Weaving 97, ,633 36, Knitting 60,030 54,839 A 5, Others 87, ,7U 18 r ^

7 «The Position of the Textile Industry in Korea ^=^^~ - ^ Year ^"\^^ Unit *\. Classification ^^-^^ ^ \ ^ Growth Rale (%) / Gross National Product (GNP) Billion W(At '75 Constant Market Price) 12, l3,s U- Production in Manufacturing Sector (A ) Billion ^ (Value Added) f 5, / Production in Textile Sector (B) Billion W (Value Added) Ratio B/A % h Total Exports (A) Textile Exports (B) Ratio B/A Million US$ Million US$ % 10,046 3, , ,993 6, Employment in Manufacturing Sector (A ) Thousand persons 2, ,126 2,972 2, Employment in Textile Sector (B) Thousand persons fè- i08ir Ratio B/A % é 24.n 27.'/ Q. Exports Source Ministry of Commerce and Industry

8 C0M.TEX/32/Add.11 Page 8 (3) Exports and Imports Korea's textile exports in reached US$6,186 million, accounting for 29.5% of Korea's total exports and showing 23.4% increase over the previous year. Breaking down the textile exports in by item, textile?oods, including clothing, represented 62.4% or US$3,859 million, fabrics 27.67c or US$1,705 million, and yarn 10.1% or US$622 million, respectively. The exports to the United States reached US$1,468 million or 23. 7%, EC US$1,147 million or 18.5%. and Japan US$1,109 million or 16.5%, respectively. Meanwhile, Korea's imports of textile goods in amounted to US$1,366 million, showing 13.5% increase over the previous year. Of this amount, the imports from the United States took the largest share of US$594 million or 43.5%, and Japan, the second largest share of US$366 million or 26.5%.

9 * Textile Exports by Item (Unit: US$ 1.000) "~~~-\^^ Classification Year "~~ -^^^ ^ ^ Total Textile Exports 3,039,307 3,981,891 4,502,899 5, , Textile Yarns 339, , , , Cotton Chemical Fiber Silk , ,822 91,457 96, , ,685 81, , , , ,754 25, Fabrics ,108,812 1,259,551 1,385,040 1, Cotton Fabrics Wool Fabrics & Products Synthetic Fabrics Silk Fabrics Embroidery Fabrics Shibori 146,869 33, ,165 80, , ,673 48, , ,123 95, , , , , ,281 88,925 61, , , Textile Products 1, ,867 2,733,703 2,936,993 3, Cotton Goods Clothing Socks and Stockings Fishing Nets A Ropes 45,899 1,793, , , ,620 61,682 42,504 2, ,455 59,218 2,662, , , Source : Ministry of Commerce and Industry

10 Textile Exports by Country 01 O CO 3 " \ _ ^ Year Country ^^^ 1V81 (Unit: US$1.000) /. ^ (%) >*" o x ^. m ï> a. Total Textile Exports U.S.A. Japan EC (W/Gcrmany) (United Kingdom) (Netherland) (France) Hong Kong 3,039, , , ,150 39, ,178 1,097, , , , ,665 52, ,162 4,502, , , , ,015 5,014, ,041, , , , , Saudi Arabia , , Canada 111, , Sweden 55,988 49, Austria 23,156 30,885 37,254 44, Others , , , Source : Ministry of Commerce and Industry ~ 01

11 «m Textile Imports by Country (Unit: US$1,000j Country ~"~^\^^ Year ^~^~-^^^ / / Total Textile Imports , ,203,017 1, U.S.A. Japan Australia Hong Kong E.C 368, ,492 10, ,952 ' 349, , , ,480 95,033 20,355 35, , , ,503 19,683 34, , , ,720 21, Others ,095 81, , , Source : Korean Customs Association v o Q) O rnj > Q. Q.

12 C0M.TEX/32/Add.11 Page 12 (4) Demand and Supply The total textile demand in reached 1.172,310 M IT. showing a/i increase of 8.57c over the previous year. By structure, the demand for exports increased by 13.1%, reaching 754,051 M IT and the domestic consumption, on the contrary, decreased by 1.5%, reaching MIT This shows that exports took the most part of the increase in the total textile demand in. The per capita domestic textile consumption in recorded 8.65kg, which decreased by 2.8% over the previous year, reflecting the serious domestic economic difficulty. In. in terms ofsupplv, production took 60.2%. and imports 39.8%. The portion of production has increased annually faster than that of imports, and with the continued, expansion of textile facilities, it is anticipated that the production will continue to take a greater portion of supply in the future than the imports. Demand and Supply Status ttlmt MIT) Classification _^ ^ ^S' ^ Import Fibers Years Fabrics Clothing Others ( Input Sub-Total Production Man-Mode Fibers Natural Fibers , Sub-Total 400, Total ,01:0.085 I.I Output Export Fibers Yarns Fabrics Cloihinjt Others Sub-Total Domestic Ômsumptton In ventory & Others A

13 C0M.TEX/32/Add.11 Page 13 (5) Other Information Efforts are being made to develop markets in non-quota areas either through direct commodity export, or plant exports. (b) To what extent and in what manner the textiles and clothing Tndustries are adapting themselves to changes in the international patterns of trade and comparative advantage. The future prosperity of the textile industry in Korea depends on its ability to react positively to changes in the factors which affect its relative competitiveness. Methods of improving the industry's competitive position include rationalizing its industrial structure, modernizing its facilities, stabilizing its supply of raw materials, raising the quality of its products and diversifying its export markets. Government measures (a) The Korean Government plans to foster the textile industry and to increase exports of textile products. The future development plans include: To diversify and improve the quality of textile products, along with the emphasis on the dyeing processing industry and the expansion of overseas export markets. To raise funds for the modernization of the textile industry, which is to include the expansion and the installation of modernized and automatic facilities. To set up organizations such as the design and fashion centre in a move to increase exports of textile items. To establish the textile industry technology promotion centre so as to expedite the introduction of foreign technology. (b) Some of the measures for improving competitiveness are considered to take some time to implement fully, but if the industry is to retain its prominence and build a sound foundation for future expansion, they must be undertaken without delay. The Fifth Five-Year Plan emphasizes the balanced development of heavy and light industry, and the relative size of the textile industry is believed therefore to continue to decline. Nevertheless, the Korean textile industry is expected to grow, and with the appropriate measures taken to maintain competitiveness, the industry is believed to continue to make a positive contribution to the Korean economy.

14 C0M.TEX/32/Add.11 Page 14 (c) The textile industry in Korea is aimed at continuing to grow and to make a positive contribution to the nation's economic growth and exports, even though its relative importance will decrease with the development of the heavy and chemical industries. C. Increased access to the market Effective 1 July 1982, the Korean Government liberalized the import of wearing apparel such as sweaters, overcoats and undergarments for ladies and gi rls. The Korean textile industry is very sensitive to foreign protectionism. The Korean industry perceives the new Multifibre Arrangement (MFA) as being less favourable to the major textile exporters, i.e. Korea, Taiwan and Hong Kong, than in previous years. The new textile agreement with Canada went into effect on 1 January The bilateral textile agreement between Korea and the United States was negotiated in June 1982, allowing for yearly growth rates of 0.5 to 4.5 per cent for quota products over the agreement's six~year time frame ( ). The Korean textile industry was not happy with the outcome, but much preferred the agreement as negotiated to no agreement at all. Negotiations between Korea and the EC have been also concluded in December D. General statement on the national textiles industries The textile industry has played a particularly important rôle in Korea's economic growth and contributes more to industrial production and employment than any other industry. Although its share of total manufacturing output has fallen in recent years as the chemical and heavy industrial sectors have expanded, the textile industry remains the largest industry in the country. Textile exports have been especially significant in the country's development and they still account for nearly a third of Korea's total exports. Until recently, the textile industry has been able to concentrate on quantitative expansion, relying on its comparatively cheap labour for international competitiveness. Now, however, market conditions are less favourable. Competitiveness is being threatened by newly emerging textile exporters, such as China and the ASEAN countries, while access to world markets is being limited by renewed protectionist tendencies in advanced countries.

OVERVIEW THE INDONESIA TEXTILE INDUSTRY

OVERVIEW THE INDONESIA TEXTILE INDUSTRY RAMON BANGUN Director of Textile and Multifarious Industry Directorate General for Manufacturing Industry Base Ministry of Industry October, 2014 1 Non Oil Industries