SAN FRANCISCO, Oct. 13, 2011 /PRNewswire-USNewswire/ -- Congress approved the U.S.-Korea Free Trade Agreement (KORUS) which eliminates tariffs and other barriers to trade in most goods and services within five years. The agreement immediately removes the 15% tariff on U.S. wines imported to Korea, and repeals the 45% tariff on grape juice concentrate.
The 15% tariff elimination also reduces the amount of excise, VAT and other taxes that are imposed on wine imports as a result of compounding. The elimination of Korea's high import duty on U.S. wine allows California wineries to be more competitive in this promising wine market.
"Korea has a significant wine drinking culture, with import consumption growing 177 percent in the last decade. We commend the Congress and the Administration for enhancing our future growth in Korea and supporting our commitment and engagement in the important Asia-Pacific region," said Robert P. (Bobby) Koch, Wine Institute President and CEO.
U.S. wine exports to Korea, 90 percent from California, were more than 500,000 cases valued at $11.2 million in revenues to wineries in 2010.
"With Korea's growing interest in wine, the country already has a well-developed distribution system unlike most other emerging markets. This lends itself to great potential for future growth," said Linsey Gallagher, Wine Institute's International Marketing Director.
Wine Institute's California Wine Export Program will lead its annual Discover California Wines trade mission to Seoul on October 18 and 19 when it will conduct consumer and trade tastings and a media seminar. This year's delegation marks Wine Institute's largest ever with 19 delegates as well as local importers, representing 68 wineries and 100 wine brands from regions throughout the state: Napa, Sonoma, Lodi, Clarksburg, Madera, Sierra Foothills, Livermore, Monterey, Paso Robles, San Luis Obispo and Santa Barbara.
Through 2004, U.S. wine exports to Korea were second only to France, but were displaced by Chile in 2005, coincident with a decrease in tariffs for Chile as a result of its free trade agreement with Korea. The European Union entered into a free trade agreement with Korea effective July 1, 2011. Elimination of tariffs will place U.S. wine on a level playing field with Chile and the EU.
SOURCE Wine Institute