Benefits of the U.S.-South Korea Trade Agreement to the Processed Food and Wine/Spirits/Beers Industries
The U.S.- Korea trade agreement provides important new market access for U.S. processed food products, including baby foods, sauces and condiments, soups, breads, cakes, pastries, cookies, chocolate, breakfast cereals, pet foods and peanut butter. The agreement will also further open South Korea’s market for U.S. wine, spirits and beer.
The United States already exports $800 million of processed food products (excluding meat and dairy products) and $27 million of wine, spirits and beer annually. Under the U.S.- Korea trade agreement, as South Korea’s tariffs go down on these products, U.S. exports are expected to reach even higher numbers.
In addition, the U.S.- Korea trade agreement will help the United States compete against South Korea’s other major suppliers of processed food products and wine, spirits and beer. South Korea’s trade agreement with the European Union, a major competitor in the market for products such as pastries, wine and spirits, went into effect in July 2011. South Korea is also in negotiations with Australia, another major competitor for U.S. processed foods exporters and their workers.
Baby foods: South Korea’s tariff of up to 40 percet will be phased out in 5-10 years.
Frozen french fries: South Korea’s 18 percet tariff will go to zero immediately.
Breads, cakes, pastries and cookies: South Korea’s 8 percent tariff will be phased out in 5 or 10 years. The European Union is U.S. exporters’ main competitor in the South Korean market.
Breakfast cereals: South Korea’s 5.4 percent tariff on most breakfast cereals will go to zero immediately. South Korea was the sixth largest market for U.S. breakfast cereals in 2010.
Pet food: South Korea’s 5 percent tariff will go to zero immediately.
Chocolate bars: South Korea’s 8 percent tariff will be phased out in 5 years.
Wine, Spirits and Beer
Wine: South Korea’s 15 percent tariff will go to zero immediately.
Distilled spirits: South Korea’s tariffs of 15, 20 and 30 percent will be phased out in 5-10 years. Bourbon whisky, currently subject to 20% tariff, will receive an immediate duty-free treatment.
Beer: South Korea’s 30 percent tariff will be phased out in 7 years.