AMERICAN WINES MORE COMPETITIVE IN JAPAN AS US-JAPAN TRADE DEAL TOOK EFFECT
By Siulan Law Mathews DipWSET
Credit: David Mathews
A US-Japan trade agreement entered into force yesterday, cutting tariffs on American wine exports to Japan.
Started from yesterday, tariffs for some USD72 billion worth of US exports to Japan, mostly agricultural, were eliminated or lowered.
Japanese tariffs on US bulk wine was abolished and the tariffs on bottled wine will be phased out in seven years from 15% previously.
The terms of the trade deal calls on Japan to open its agriculture market to American producers to the extent that it did under the 11-country Trans-Pacific Partnership pact (TPP).
American wine producers will be on level grounds with competitors from Australia, Chile, New Zealand and Canada which are members of TPP which President Trump decided to pull out from.
Benefiting from TPP, Australian wines are taxed at 5.6% in Japan and will eventually drop to zero and there is no duty for Chilean wines. Comparatively, California wine exporters had to face 15% tariffs in Japan before the trade deal took effect.
Robert Koch, President and CEO of California wine body The Wine Institute, said in September last year when the trade deal was signed: “Japan is a vitally important market for California wineries, however, the United States has been the only major wine-producing country paying a 15% import tariff. We are pleased with this agreement which, once implemented, will reduce tariffs on agricultural products including wine."
"The new trade agreement will level the playing field for California wine in Japan and create more opportunities for Japanese consumers to enjoy the quality and diversity of Golden State wine. We look forward to both governments making progress towards the implementation of this agreement as soon as possible," Koch added.
Under the bilateral deal, Japan lowered its import duty on US beef from 38.5 percent to 26.6 percent yesterday and will cut it down to 9 percent in 2033.
Japanese tariffs on American grated cheese and pork products will eventually be reduced to zero.
Meanwhile, US tariffs on Japanese air conditioner parts and fuel cells were abolished yesterday.
A separate bilateral pact setting digital trade rules also took effect yesterday.
The two agreements are aimed at promoting freer trade between the two economies, which together account for about 30 percent of world’s gross domestic product.
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