welting

Welting is a fabric strip inserted in the seamline between two pieces of an item or garment. To give you an idea of how it's done and what it looks like, see if you have a sofa or chair with a corded welt surrounding the pillows or outlining the front panel of the arms.

In woven and sewn items this is usually a bias strip which may or may not have a cord inserted to give it a fuller shape. Bias-cut fabric is used because it will stretch around curves, while fabric cut along or against grain lines will not.

Knit welting need not be a bias-knit strip (although the look would be a cheeky nod to the woven variety). You could simply knit a strip wide enough to fold and long enough to encircle the entire seamline. Whether or not you wanted to pad it with a cord would be your choice. The thin look of an unpadded welt is particularly effective when done in a contrasting color.

You could also do a nice fake-out with a strip of I-cord which you could simply slip-stitch in place with thread after you have finished seaming the garment.

I'm surprised that your instructions didn't include very specific directions for executing such an important detail. Is the pattern or a picture of the garment available for us to look at on-line?