JAPAN SET TO REMOVE U.S. WINE TARIFF OVER 5 TO 7 YEARS
By Siulan Law Mathews DipWSET
Japan will eliminate its 15% tariff on US wine imports over 5 to 7 years under a bilateral trade agreement expected to be signed at the end of this month, according to Nikkei Asian Review.
The deal will bring down price of American wine in Japan by about 10%, making it more competitive against producers from European Union (EU) and Trans-Pacific Partnership (TPP) countries.
It was reported that Japanese Prime Minister Shinzo Abe and US President Donald Trump will sign the formal trade deal later this month in a sideline meeting during the United Nations General Assembly to be held later this month in New York.
The time frame of the wine tariff elimination is in line with that applied to the 11 member states of the TPP, to which USA belonged until President Trump decided to quit.
The 11 members proceeded without USA in December last year, slashing tariffs with each other and leaving American businesses at substantial competitive disadvantage.
The 11 countries are Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico and Brunei.
Benefiting from TPP, Australian wines are currently taxed at 5.6% in Japan and will eventually drop to zero and there is no duty for Chilean wines.
While EU wine exporters enjoy zero tariff thanks to the EU-Japan free trade agreement which took effect early this year.
Chile is the top provider of foreign wine in Japan, accounting for 31% of the market in 2018, followed by France and other EU countries. The USA, with 6% market share, is in sixth place after Australia in fifth place.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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