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. 83-1741
Spinning Facilities and Capacity for Chemical Fibers ^ ^^^ Year Classification^~~^~~^^^ ^ ^ ^ (%) ^ Spinning Facilities (Spindles) Cotton Spinning Worsted Spinning Woolen Spinning 2.427.960 660.616 87,884 2.548.268 713.044 98.560 3.074.892 713.044 98.630 3.167.124 823.924 111.996 3,192,212 839.080 115.264 100.8 101.8 102.9 Total 3.176.460 3.359.872 3.886.566 4.103.144 4.146.556 101.1 Capacity for Chemical Fibers (MT/D) Nylon Polyester Acrylic Viscose Acetate Others 181.4 383.0 249.5 59.2 15.5 33.0 218.8 461.0 298.0 59 2 15.5 26.0 262.5 495.0 320.5 59.2 15.5 26.0 262.5 585.0 345.5 59.2 15.5 32.0 264.3 611.0 345.5 109.2 15.5 23.5 100.7 104.4 100.0 184.5 100.0 73.4 Total 921.6 1,078.5 1.178.7 1.299.7 1,3690 105.3
s - Textile Facilities for Looms, Knitting Machines and Others (Unit Set) "^-v^ Year Qassification^^-^^^ ^- (%) s< Cotton Loom 55.616 55,133 52.768 55.179 51,699 93.7 Filament Loom 50,067 54,192 84.337 85.286 85.709 100.5 Wool Lcx>m 3.168 3.434 3.759 3.439 3.459 100.6 Embroidery Ixtom 284 270 448 448 294 65.6 Towel Loom 1.654 1.768 1.808 1.935 1,882 97.3 Knitting M/C (Circular Knitting) (Flat Knitting (Warp Knitting) (Socks & Stockings) (Gloves) 49.471 16.609 21.611 1.760 6,942 2.549 51.419 17.350 23,170 588 7.092 3.219 52,735 18.172 22.265 560 7,899 3,839 43.085 14.871 15.026 1,008 8,364 3.816 39.072 13.841 13.352 778 7.766 3,335 90.7 93.1 88.9 77.2 92.9 87.4 Sewing M/C 183.187 210,272 255,642 275.414 318,904 115.8 Dyeing M/C 3.280 3.622 3,778 3,621 4.122 113.8 Twisting M/C (Spindle) 122,802 148,570 155,338 165.000 167.500 101.5
Yams (M/T) Classified tiu Year Cotton Yarn Worsted Yam Woolen Yarn Production of Textile Yarns, Fabrics and Chemical Fibers 251,158 15,083 11,611 300,552 18.644 14,577. 349.610 21,181 15,290 381,385 17.940 17.487 383,872 23,964 17.024 ^ ^ ^ (%) ^ 100.7 133.6 97.4 0) 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 742.571 25,200 12,590 11,289 54,500 386,400 942,954 32,445 15,182 32.017 70,344 437.600. 940.386 34.428 15.222 49.828 109.466 680.470 1.016.528 36,020 13,525 58,066 127,566 792.566 1.032.502 33.660 11.577 52,044 62,624 914,822 101.6 93.4 85.6 89.6 49.1 115.4 Chemical Fibers (M/T) Nylon Polyester Acrylic Viscose Acetate Others 84.099 157.915 107.535 20.283 7,241 5,775 100.662 205.353 126.411 20,538 7,652 7,685 114.599 230,579 132,159 21,541 7,758 7,685 119.897 277.080 139.436 25,438 7,466 3,897 124.260 332,073 153,847 24,673 7.910 3.123 103.6 119.8 110.3 97.0 105.9 80.1 Total 382,848 467.781 514.321 573,214 645,886 112.7 Note : Cotton Yarn & Fabrics include Cotton Blended Yarn & Fabrics. Worsted Yam & Fabrics include Wool Blended Yarn & Fabrics. '
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) 12.929,000 13.490,000 13.664,000 13.706.000 14,048.000 102.5 Manuftclunnt InJutiry (B) 2.798,000 3.016.000 3.126.000 2.972.000 2.872.000 96 6 Textile Industry (C) 698.641 721.602 769,766 732,620 795,405 1075 a/a 21 6 22 4 22.9 21 7 20 4 Ratio 1*1 C/A 5.4 5 3 56 5.4 5.7 C/B 25 0 23 9 24.6 24.7 27.7
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 732,620 795,405 62,785 108,6 Garment production 368,013 382.155 103.8 Spinning 118,905 117,063 A J,842 98.5 Weaving 97,840 134,633 36,793 137.6 Knitting 60,030 54,839 A 5,191 91.4 Others 87,832 106,7U 18 r 882 121.5 ^
«The Position of the Textile Industry in Korea ^=^^~ - ^ Year ^"\^^ Unit *\. Classification ^^-^^ ^ \ ^ Growth Rale (%) / Gross National Product (GNP) Billion W(At '75 Constant Market Price) 12,931 13.877 l3,s 3 106. U- Production in Manufacturing Sector (A ) Billion ^ (Value Added) 3.634 4.387 4.818 4.76 f 5,102 107./ Production in Textile Sector (B) Billion W (Value Added) 632 707 720 750 113.2 Ratio B/A % 17.4 16.1 14.9 15.7 16. h Total Exports (A) Textile Exports (B) Ratio B/A Million US$ Million US$ % 10,046 3,039 30.3 12,711 3.982 31.3 15.055 4.503 29.9 17.505 5.014 28.6 20,993 6,186 29.5 119.9 123.4 Employment in Manufacturing Sector (A ) Thousand persons 2,798 3.016 3,126 2,972 2,872 96.6 Employment in Textile Sector (B) Thousand persons 699 722 7 70 733 7fè- i08ir Ratio B/A % 25.0 23.9 24. é 24.n 27.'/ Q. Exports Source Ministry of Commerce and Industry
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$366 million or 26.5%.
* Textile Exports by Item (Unit: US$ 1.000) "~~~-\^^ Classification Year "~~ -^^^ ^ ^ Total Textile Exports 3,039,307 3,981,891 4,502,899 5,014.323 6,185.807 123.4 Textile Yarns 339,635 419,212 509,645 692.290 622,226 89.9 Cotton Chemical Fiber Silk 117.669 90.092 106,706 206,822 91,457 96,918 264,534 126,685 81,697 332,869 236.283 65,315 276,235 241,754 25,963 83.0 102.5 39.8 Fabrics 733.792 1,108,812 1,259,551 1,385,040 1,704.556 123.1 Cotton Fabrics Wool Fabrics & Products Synthetic Fabrics Silk Fabrics Embroidery Fabrics Shibori 146,869 33,862 263,165 80,862 72.545 105,179 195,673 48,961 468,827 130,123 95,396 136,299 250.877 51.046 540.298 138.573 105,334 144.137 285.823 75,501 722,638 121,281 88,925 61,426 295.850 98.168 949.475 137,990 95.846 82,015 103.5 130.0 1314 113.8 107.8 133.5 Textile Products 1,965.881 2.453,867 2,733,703 2,936,993 3,859.025 131.4 Cotton Goods Clothing Socks and Stockings Fishing Nets A Ropes 45,899 1,793,406 72.298 54,277 47.916 2,250.649 93,620 61,682 42,504 2,502.480 108.264 80,455 59,218 2,662,650 103,253 111.872 91.682 3.532,736 115.529 119.077 154.8 132.7 111.9 106.4 Source : Ministry of Commerce and Industry
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 3,039,307 787,181 679.365 612.272. 253.847 126,126 103,150 39,748 122.601 3.981.891 987,178 1,097,777 702,192 303,705 157,533 104,665 52,294 163,162 4,502,899 980,321 1.266.903 889.898 375,993 208.916 115.048 75,942 205,015 5,014,323 1.113.480 884.987 1,041,016 445,779 223.973 144.246 106.111 336.519 6.185,807 1.468.201 1,018.528 1.146.935 464,824 304.154 151.227 109.453 436.512 123.4 131.9 115.1 110.2 104.3 135.8 104.8 103.1 129.7 Saudi Arabia 123.351 127,692 135,138 153.352 196.171 127.9 Canada 111,866 114.248 128,134 117.402 170.354 145.1 Sweden 55,988 49,515 53.620 63.553 65.392 102.9 Austria 23,156 30,885 37,254 44,606 38.756 86.9 Others 521.527 709,242 802,527 1.259,480 1.644.958 130.6 Source : Ministry of Commerce and Industry ~ 01
«m Textile Imports by Country (Unit: US$1,000j Country ~"~^\^^ Year ^~^~-^^^ / / Total Textile Imports 843.147 988.032 1,085.316 1,203,017 1,365.557 113.5 U.S.A. Japan Australia Hong Kong E.C 368,775 330.979 62,492 10,427 22.114 450,952 ' 349,984 79.954 9.742 27,305 507,436 345,480 95,033 20,355 35,903 609,184 325,536 100,503 19,683 34,967 593,886 365,985 136,720 21,770 37.219 92.6 112.4 136.0 110.6 106.4 Others 48.360 70,095 81,109 113,144 209,977 185.6 Source : Korean Customs Association v o Q) O rnj > Q. Q.
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 335.106 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 269.836 35.248 47(188 700 386 361.246 45.546 37.561 810 969 370.931 36.682 33.803 1.036 100 390.210 25.335 33.099 744 94 391.165 41.137 33.889 504 59 100 2 162 4 102 5 67.7 62.8 Input Sub-Total 353.258 446.132 442.551 449.482 466.754 1038 Production Man-Mode Fibers Natural Fibers 382.958 17,405 504.377 13.156 562.574 11.870 617.613 12.990 696.056 9.500 112 7 731 Sub-Total 400,363 517.533 574.444 630.603 705.556 111.9 Total 753.621 963.665 1.016.995 1,01:0.085 I.I 72.310 108.5 Output Export Fibers Yarns Fabrics Cloihinjt Others Sub-Total 18.524 83.118 166.514 188.755 3.381 460.292 14.134 112.939 211.087 200.114 1.332 539.606 12.457 123.572 217.308 188.816 1.114 543.267 34.453 178.605 272.703 178.155 1.802 666.518 34.408 170.232 316.755 230.068 2.588 754.051 99 9 95.3 116.2 128 6 143 6 113.1 Domestic Ômsumptton 298.743 325.855 339.325 340.062 335.106 93 5 In ventory & Others A 5.414 98.204 134.403 73.505 83.153 113 1
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.
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 1982. 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 (1982-1987). 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 1982. 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.