U.S. trade representatives recently concluded free trade agreement negotiations with Korea that will result in the eventual elimination of tariffs and other trade barriers on most goods and services.


Wine and more than half of current U.S. farm exports to Korea, value at more than $1.5 billion, will become duty-free immediately upon ratification by both countries. The agreement goes to Congress for approval and the president's signature.



“The free-trade agreement with Korea is the first [agreement] in years that actually offers a market of meaningful opportunity for the export of California and Arizona citrus,” says Mike Wootton, Sunkist senior vice president of corporate relations in Sherman, Oaks, Calif.


Historically, Korea has had high tariffs on citrus, with a 50 percent duty on oranges, 30 percent on lemons and grapefruit, and 114 percent on Mandarins.


Under the agreement, citrus tariffs would be phased out over several years, depending on variety. A 50 percent duty would remain on U.S. oranges imports from Sept. 1 to March 1.





Wine industry officials see similar market opportunities.


"Korea is an economically significant wine market with its consumption growing 174 percent in the last five years, says Robert Koch, president and chief executive officer of the Wine Institute in San Francisco. 


Through 2004, U.S. wine exports to Korea were second behind France, but were displaced by Chile in 2005. The changes coincided with a decrease in tariffs for Chile as a result of its free trade agreement with Korea.  


Elimination of tariffs on U.S. wine will make U.S. wine competitive with Chile, Koch says


In 2006, U.S. wine exports to South Korea totaled 4.3 million liters valued at $11.3 million. It is the 12th largest market for U.S. wine exports by value and growing rapidly. California accounts for 95 percent of U.S. wine exports.