The US congress last week approved the US-Korea Free Trade Agreement which will eliminate tariffs and other barriers to trade in most goods and services within five years.
The agreement, KORUS, immediately removes a 15% tariff on US wines imported to South Korea.
The elimination of South Korea’s high import duty on US wine allows California wineries to be more competitive in this promising wine market, according to a press release from the Wine Institute, which represents more than 1,000 California wineries.
‘South Korea has a significant wine drinking culture, with import consumption growing 177% in the last decade,’ Wine Institute CEO Robert Koch said.
‘We commend Congress and the Administration for enhancing our future growth in Korea and supporting our commitment and engagement in the important Asia-Pacific region.’
US wine exports to South Korea – 90% from California – amounted to more than 500,000 cases valued at US$11.2m in revenues to wineries in 2010.
According to the Wine Institute, in 2004 US wine exports to South Korea were second only to France, but were displaced by Chile in 2005.
This was coincident with a decrease in tariffs for Chile. The European Union also entered into a free trade agreement with Korea effective from July 1, 2011.
Written by Panos Kakaviatos