S. Korea to Ease Tariffs, Import Limits on U.S. Wines
South Korea agreed Wednesday to begin opening its borders to more American-made wines and wine coolers, apparently as part of an effort to clear away minor trade disputes with the United States to avoid tougher retaliation later under last year’s U.S. trade law.
In an agreement negotiated with outgoing Reagan Administration officials, Seoul said it will lift its import ban immediately on wine coolers, dessert wines and fortified wines, and double its current modest import quota for all wine products.
It will also allow all U.S. wine products the same access as Korean brands to the country’s distribution system, which earlier had been impeding sales of American wine products that made it through the border.
The agreement said that effective immediately, U.S. companies will have the right to establish their own distribution networks. Starting in 1991, they will be able to invest directly in importing and wholesaling activities.
Evading the List
The pact came in response to the filing of an unfair trade practices complaint against Korea by the American Wine Institute. Under U.S. trade law, the Administration has 13 months to negotiate a settlement. If it cannot, the President can retaliate by imposing sanctions.
The trade act that Congress passed last year requires the Administration to compile a list of countries that maintain excessive trade barriers, for possible U.S. retaliation. Trade experts said they believed that Wednesday’s action was designed to help keep Korea off such a list.
U.S. officials said the accord marked an initial step toward eventual further opening of the South Korean market. In addition to the other measures, the Koreans promised to reduce tariffs on wine products from today’s 50% to 35% in 1989 and 30% in 1990.
Also, tariffs on wine coolers will be reduced to 25% immediately. The tariff on all wine products, including coolers, had been at 100% until early 1988.