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Japan to remove tariffs on American wine

Japan is planning to eliminate its 15% tariff on American wine imports in the next five to seven years as the two trade partners are poised to sign a deal at the end of this month.

Japan is planning to eliminate its 15% tariff on American wine imports in the next five to seven years as the two trade partners are poised to sign a deal at the end of this month.

The news is expected to boost American wine exports to Asia when its imports to mainland China experienced unprecedented challenges with punitive tariffs.

The deal is seen as a move to put American wine on a level playing ground with its European counterparts, which enjoy free tariff, thanks to a Japan-EU economic trade pact that took effect earlier this year, Nikkei reported.

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The US currently counts itself as the 6th biggest wine supplier to Japan.

Last month, Japan and the US agreed in principle on the key points of a trade deal, which is expected to be signed in New York on the sidelines of the UN General Assembly later this month.

The US currently ranks as Japan’s sixth biggest source for imported wines, and its wine exports to the Asian country amounted to US$93.04 million in 2018, according to California Wine Institute.

American wine exports to Japan are relatively stable, despite declining 1% in export value last year, while volume was down 22%. American wines declined mainly in bulk wine exports to Japan which were down by 34% in volume, according to the institute.

The reduction on tariff will be phased out in five to seven years’ time, around the same time that the duty would have been eliminated based on previous Trans-Pacific Partnership, which the Trump Administration scrapped from the table.

The removal of the wine tariff will also reduce the cost for distributors by roughly 13%, leading to lower retail prices, according to Nikkei.

At the moment, Chile counts itself as Japan’s biggest wine importer with 31% of its market share, thanks to a free trade agreement put in place in 2007.

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