Skip to comments.NK Ships $110,000 Clothes to US for 1st Time (J.C.Penney Purchases Clothes Made In North Korea)
Posted on 09/08/2003 7:56:27 AM PDT by TigerLikesRooster
NK Ships $110,000 Clothes to US for 1st Time (Korea Times)
By Kim Sung-jin Staff Reporter
North Korean-made apparel has been exported to the United States for the first time, bringing excitement to South Korean companies that are making inroads to the reclusive communist state.
According to the Korea Trade-Investment Promotion Agency (KOTRA), U.S. trade records show that a New York trader bought more than $110,000 worth of clothing made in North Korea.
The New York trading firm run by an ethnic Korean named Park arranged the deal which covered two separate shipments _ each shipment was worth around $59,000 _ between December 2002 and June this year.
The shipments, mostly comprising womens apparel, were distributed in the U.S. through retailer JC Penney, KOTRA said.
The agency said the shipments mark the first ``sustained commercial transaction between the U.S. and North Korea, which have no formal diplomatic or economic ties. The U.S. is currently the largest apparel market in the world.
Although another U.S. firm imported $10,000 worth of knitwear from North Korea in 1991, it is difficult to view it as a commercial transaction since the amount was small and it was a one-time deal, KOTRA said.
The latest deal follows the June 2000 U.S. easing of trade restrictions on North Korea that have been in place for decades.
The transaction is good news for South Korean companies who want to use North Korea as a springboard to export abroad. As of early January, 378 South Korean companies, or 41.4 percent of the 912 that have applied to relocate their plants to the Kaesong Industrial Complex under construction in North Korea, are textile or garment-related.
However, the agency said the situation is not all rosy.
There are more problems to be solved to export cheap North Korean-made apparel and manufactured goods to the U.S.
The U.S. presently applies ``Column 2 rates on North Korean textile goods, which means duties on North Korean products are a hefty 35-90 percent, compared with the 4.4 to 32 percent imposed on ``Column 1 countries that export similar goods. Exporting to the U.S. from the communist country may not be as cheap as anticipated and would not be as profitable for traders.
KOTRA, however, said it was unable to determine the tariff rates the U.S. slapped on the North Korean apparel shipments made in December 2000 and last June.
Meanwhile, trade between the U.S. and North Korea declined in the first half of this year compared with the same period last year. The U.S. exported $3.21 million worth of goods to the North, down from $4.82 million in the corresponding period a year ago, while importing just $59,000 worth of clothes.
``North Korean goods will make full-fledged inroads to the U.S. market only after the normalization of trade relations between the U.S. and North Korea, and Washington eases its restriction on Pyongyang and applies `Column 1 tariffs on North Korean goods, said a KOTRA official.