South Korea believes that the US law (IRA) violates KORUS FTA, and hence the talks are being considered crucial for the two countries and their trade relation. 

South Korean trade minister Ahn Duk-geun is currently in the US to discuss the Inflation Reduction Act (IRA) of the US, which restricts trade freedom given under the US-Korea free trade agreement (KORUS FTA). South Korea, being a friendly partner country has more dependency on the US which is also an important market for Korean textile exports.

The IRA was signed recently, offering tax rebate to each buyer of an electric vehicle (EV) assembled in North America. The rebate will not be available for all EVs imported from outside the North American region, including Europe and south Korea. 

The US is an important market for Korean textile exports also. According to Fibre2Fashion’s market insight tool TexPro, the US is among the top four destinations for South Korean garment exports. South Korea’s garment exports totalled $1.962 billion in 2021. The US was the fourth largest importer of Korean clothing with a share of 12.49 per cent. 

As per TexPro, South Korean garment exports to the US increased sharply after a fall during the pandemic. The exports dropped to $174.771 million during 2020, from $215.996 million of the previous year. The outward shipment jumped to $245.050 million in 2021. South Korea has exported garments worth $163.621 million during the first seven months of this year. 

Fibre2Fashion News Desk (KUL)