Industry by the Numbers
With 50 million potential customers, Korea is Asia's third largest wine market and the tenth largest export destination for U.S. wine. According to the Wine Institute, Korean wine consumption increased 177 percent in the last decade, and is expected to continue to grow in the coming years. Implementation of the U.S. Korea Free Trade Agreement eliminated the 15 percent tariff that had previously existed on U.S. wine and will enable U.S. wine to become a less expensive and more popular option for Korean consumers.
The likely benefits to U.S. wine over the coming years are evident from the striking example of the Chilean wine industry. Until 2005, U.S. wine exports to Korea were once second only to France; however, in 2005 the Korea-Chile Free Trade Agreement took effect, and eliminated Korea's tariff, making Chilean wine more affordable than wine from the U.S. Since then, Chile has become Korea's second largest wine exporter, and has seen its market share increase from 2.8% to 17.7%. Meanwhile, between 2001 and 2008, U.S. market share decreased from 24.5% to 9.7%, primarily because tariffs made U.S. wine was more expensive than its Chilean competitors.
The U.S. wine industry is excited about the opportunities in Korea:
"Korea is a sophisticated market, and Korean consumers are educated and wine savvy. We are excited about the promising opportunities in Korea - the reduction in tariffs on wine will lead to lower prices for consumers and make Cristom wines more accessible in stores and restaurants."
--Tom Gerrie, General Manager at Cristom Vineyards
"Korea is already a strong market for Washington State wines, and the passage of the KORUS FTA only serves to improve the potential for our producers in that market."
--Steve Warner, President and CEO of the Washington State Wine Commission.
The Free Trade Agreement will also increase the availability of Korean wines in America. Unlike American wine, which is usually derived from grapes, Korean wines are often rice-based and infused with fruits, flowers and herbs. Although still somewhat novel in America, their popularity has been steadily growing, thanks both to Korean immigrants to America and increased consumption by Americans from non-Korean backgrounds.
American wine experts have been increasingly impressed with the quality of Korean wines. Bokbunja, a traditional Korean wine made from black raspberries, was awarded a silver medal in 2005 at Dallas Morning News International Wine Competition, and Gyeongju Beopju, a unique rice wine produced in the southern city of Gyeongju for more than 400 years was, along with Andong Soju, officially recognized as a distinctive product of Korea under the FTA.
Select your state below for information on local resources that can help you take advantage of opportunities from the U.S.-Korea Free Trade Agreement. These resources include groups in both the public and private sector.
Computers & Electronics, Chemicals, Machinery
Communications Equipment, Motor Vehicles, Semiconductors
In 2011, trade volume between the United States and Korea topped $100 billion for the first time.