WASHINGTON, DC – The Distilled Spirits Council today congratulated the United States and Korean governments for resolving issues holding up the U.S.–Korea Free Trade Agreement (KORUS FTA), saying it will lead to elimination of tariffs on U.S. distilled spirits products in the important South Korean market.
“This agreement will result in significant and immediate benefits for the U.S. distilled spirits industry, following legislative approval in both countries,” said Distilled Spirits Council Senior Vice President Christine LoCascio, who noted that Korea’s 20% ad valorem tariff on Bourbon and Tennessee Whiskey—the leading U.S. spirits exports—will be eliminated immediately upon implementation of the agreement.
Korea’s tariffs on all other categories of U.S. spirits, such as vodka, gin, rum, etc., will be eliminated five years after the agreement enters into force.
“As the sixth largest spirits market in the world (volume) and valued at $10.1 billion (retail sales) in 2009, Korea is one of the most promising markets in Asia for U.S. spirits exports,” said LoCascio. In value terms, the whiskey category accounts for 43% of all spirits sales in Korea.
“It is clear that the U.S. spirits industry will benefit significantly from the new market opportunities created by the FTA,” LoCascio added. “We stand ready to support swift Congressional approval of the agreement.”
Exports of Bourbon and Tennessee Whiskey accounted for the overwhelming majority (85% in value terms) of total U.S. spirits exports to Korea in 2009, which were valued at almost $7 million (supplier value).
Resolution of these matters will clear the way for Congressional consideration of the FTA, which was originally signed in 2007. Korea’s National Assembly must also approve the final agreement reached between the two countries.