U.S., South Korea settle OJ tariff dispute

WASHINGTON — A tariff dispute between the U.S. and SouthKorea over frozen orange juice concentrate was quietly resolved ahead of PresidentBarack Obama’s visit to Seoul thisweek, trade officials in both countries said.

The news was welcome relief to Florida’s citrus growers, who said they’ve lost millions of dollars in potential sales since the feud began about a year ago.

“I could not be happier,” said Mike Sparks, CEO of Florida Citrus Mutual, a trade group. The diplomatic breakthrough “gives us another excellent opportunity to ship our high- quality Florida orange juice to another market.”

Obama was in South Korea on Friday as part of a four-country trip to shoreup U.S. interests in Asia. While there, he discussed how the U.S. and South Korea could ensure that the two countries fully implemented a 2012 trade agreement — an issue at the heart of the recent skirmish over frozen orange juice concentrate.

The OJ fight started last spring when South Korean officials began questioning whether concentrate made in the U.S. was derived exclusively from oranges grownwithin theU.S.

This “purity test” is crucial because concentrate made from U.S. oranges alone, and not mixed with foreign fruit, is allowed to bypass a crippling 54 percent tariff in South Korea. The exemption was made possible by a trade agreementbetween the two countries that went in effect two years ago.

Increased scrutiny in 2013 by SouthKorean authorities, however, caused a sharp drop in sales because juice companies feared that Seoul would retroactively try to collect the 54 percent tariff on orange juice concentrate already sold there.

A retroactive penalty would have been significant.

Exports of frozen orange juice concentrate to South Korea had nearly tripled the year after the trade agreement went into effect, spiking from$11million in 2011to $30 million in 2012, according totheU.S. Departmentof Agriculture.

Neither Sparks nor U.S. officialswere able to provide exact figures on the damage toU.S. sales. But Sparks esti-

mated the hit to be in the “millions of dollars” to Florida’s $9 billion citrus industry.

One reason South Korea was suspicious about the origins of U.S. concentrate was the close link between citrus companies in U.S. and Brazil, another major player in the global orange market. At least three Florida companies have ties to Brazil, and it’s common practice in the juice industry to blend fruits from different countries.

U.S. producers insisted that the concentrate being shipped to South Korea was made only from U.S. oranges, and they offered proof from federal oversight agencies such as the Department of Agriculture, said industry officials.

With the standoff worsening, U.S. Sen. Marco Rubio, R-Fla., invited SouthKorean inspectors to visit juice processing plants in Florida to verify the oranges’ origin.

A trade counselor with