South Korea’s Foothold in the U.S.

Americans buy a lot of lightweight sports shoes from South Korea, but they are selling the South Koreans the hides to make them.

The figures highlight one area where the United States, the world’s biggest manufacturing country, has become more and more a supplier of raw materials.

“A global mania for leather jogging shoes is putting smiles on the faces of U.S. cattle hide exporters,” the Department of Agriculture says in the August issue of its monthly “Foreign Agriculture.”

U.S. authorities consider jogging shoes leather products, even though they are made to a large extent of rubber and textiles. The article does not refer to the U.S. shoe industry.

Last year, South Korea became the top customer for U.S. hides: some $450 million worth, about twice as much as in 1983, according to the Department of Agriculture. Footwear Industries of America, a trade association, says this country bought 47.5 million pairs of athletic shoes from South Korea in 1983 and 116.7 million pairs in 1986.

Exports of U.S. hides and skins to all countries last year rose 22% to nearly $1.2 billion, with Kansas being the leading state, with $234 million worth of such exports, followed by Texas with $215 million and Nebraska with $214 million. A further increase is expected this year.

No. 1 Supplier

The hides come back. The shoe industry says 940.8 million pairs of shoes were imported altogether in 1986, an increase of almost 12%.

South Korea is now the world’s leading supplier of leather goods, shipping a variety of types of shoes to the United States as well as clothing, handbags and much else.

Taiwan, Italy and Mexico, which are among the top sellers of shoes to the United States, were also among the top buyers of hides. These countries all have lower wage costs than the United States. But costs in South Korea are lower still.

In 1985, the most recent year for which comparative figures can be obtained, a South Korean worker in the leather shoe industry cost his or her employer the equivalent of 94 cents an hour, according to figures from the U.S. Labor Department. A U.S. shoe worker cost $7.24 an hour. These figures include employers’ pension contributions and other expenses as well as wages.

Labor strikes have been increasing recently in South Korea, with workers demanding both higher wages and the right to form independent labor unions, which would be sure to try to push wages higher.

Labor Rights Issue

Trade bills due for action when Congress returns to Washington after Labor Day would give the President authority to consider denial of labor rights, including the right to form free labor unions, an unfair trade practice harmful to U.S. industry. He could then order retaliation against imports from countries he considers offenders.

President Reagan is unlikely to exercise that authority even if Congress gives it to him, although his successor may see things differently. The Reagan Administration contends that the list of unfair trade practices should be expanded only by new international agreements.

Roger Bolton, spokesman for U.S. Trade Representative Clayton K. Yeutter, said in an interview that the U.S. delegation failed to get a single country to support its effort to include the question of worker rights in a new round of international trade talks.

In a letter last April to Speaker Jim Wright (D-Tex.) of the House of Representatives, 12 members of Cabinet, headed by Treasury Secretary James A. Baker III and Yeutter, wrote:

“Implementation of the proposal on worker rights . . . would likely assure retaliation from the worst offenders of the new provision and would prove counterproductive to our efforts to promote worker rights.”