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Originally published Sunday, September 12, 2010 at 3:48 PM

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Wash. governor off on China, Vietnam trade mission

Over the past five years, Washington's cherry shipments to China have grown from none to 750,000 boxes.

Yakima Herald-Republic

YAKIMA, Wash. —

Over the past five years, Washington's cherry shipments to China have grown from none to 750,000 boxes.

Now ag officials are hoping for a similar success in Vietnam.

On Monday, Gov. Chris Gregoire leaves on an 11-day trade mission to China and Vietnam, accompanied by nearly 80 agriculture, education, government and business representatives from across the state.

The goal is not only improved trade relations with China and Vietnam, but to make contacts with potential new customers for several of the state's key crops, including apples and cherries.

Ag officials credit a similar 2005 trade delegation by Gregoire for opening the China market for cherries.

"You can't expect to go to those countries one time and start selling them things and never go back. You have to foster and maintain those relationships," said state Department of Agriculture Director Dan Newhouse of Sunnyside, noting 30 percent of the state's agriculture is exported.

"That's the value of having the governor go with us to start those conversations and open those doors."

Washington already sends 2.6 million boxes of apples annually to mainland China and Hong Kong, making it the state's fourth-largest overseas market for apples. That's up nearly 37 percent from four years ago.

Officials say the challenge now is to lift China's tight trade barriers, which restrict apple imports to the Red and Golden Delicious varieties.

Varieties that have become increasingly popular with consumers - such as Pink Lady, Honey Crisp and Jazz - can only be sold in Hong Kong, which unlike the rest of China is a free market. Part of the problem is that no one anticipated so many varieties would be available when the first trade agreements were being established a decade ago.

A thriving "gray market" based in Hong Kong allows new varieties to bypass regulators and reach consumers in mainland China. But the market is illegal and unreliable. U.S. growers would like to see the barriers that created it eliminated.

"Sometimes the lines of communication are not as open as they should be," said Todd Fryhover, president of the Washington Apple Commission in Wenatchee.

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"Things get thrown up as barriers to trade that have nothing to do with apples whatsoever. ... We would, as an industry, benefit if we had full varietal access."

The Chinese government had been concerned about a bacterial disease, fire blight. Fryhover said studies prove U.S. apples don't carry the disease, but trade obstacles remain and need to change on the federal level.

"You have to give and you have to take," he said. "It's not an apple-for-apple situation. It could be pork, rice, wheat or solar energy. Apples are one small component that makes up the trade issues with China."

Apple exports are exceedingly important to Central Washington farmers who grow about half the nation's apples. Roughly one in three of the state's apples are exported. Shipments go to 26 countries, with most going to Canada, Mexico and Taiwan during the last season.

Joe Brandt, sales manager for E.W. Brandt & Sons in Wapato, isn't going with the current trade delegation, but agrees increased trade with China's 1 billion people is vital to his industry.

His company now works through a broker to send apples to Taiwan, and from there, some of his products make their way to China. He hopes to someday develop a more direct trade relationship.

"China as an emerging market is important to the industry," he said. "That market has been untapped."

On this trip, Fryhover is focused on expanding the apple market to China's interior. U.S. apples are now established in the wealthier south and eastern coastal regions of the country, available in such cities as Beijing and Shanghai.

But inland, there are 66 other cities with populations of at least 1 million that the apple industry would like a chance to open, Fryhover said.

"As economics improve in the interior of the country, the people will have the opportunity to have choice," he said. "We're working hard with retail to expand westward into China. That will be a major focus this year."

If all goes well, Fryhover said he can easily see the export of Washington apples doubling in the next five years. To him, the trip to China with Gregoire marks the beginning of the process.

"We want to elevate ourselves on a higher level," he said. "You will carry more weight when you travel with the governor."

Over the past five years, China surpassed Taiwan to emerge as Washington's top offshore market for cherries. Now, B.J. Thurlby, president of the Washington State Fruit Commission, wants to do business with Vietnam.

The country would make a good trading partner for numerous reasons, he said. It has a population of about 88 million and has a growing middle class. The weather prohibits much in the way of growing cherries, and the United States is closer than Europe's cherry orchards.

Washington already ships from 300,000 to 400,000 boxes of apples there a year - meaning the country is receptive to agricultural trade, Thurlby said.

"We need every market we can get," he said. "(Vietnam) has potential."

In addition to traveling with the governor, Thurlby will work with his own team to talk with importers and retailers. Admittedly, he has more questions than answers at this point. For example, since cherries are a highly perishable fruit, he needs to know more about the country's cold storage system.

"Vietnam could be 40,000- to 50,000-box market for us, maybe more," Thurlby said. "We're going in there with goals. ... It will be busy."

Newhouse believes the upcoming trip is vital to expanding and creating new markets in Vietnam and China. These countries are emerging out of their own recessions, and by establishing new trade relationships, he hopes the same can happen in America.

"By doing this, it will help bolster and hopefully improve the kinds of prices we're seeing here that we produce locally," Newhouse said. "There is a lot of good that can happen out of this."

The governor's estimated $5,000 expense is coming from her office budget. All nonstate employees in the delegation are paying their own way.

While in China, the delegates will meet with industry leaders in aerospace, agriculture, clean energy and education to promote Washington products. Gregoire hopes the trip will mirror her 2005 success in China and Japan, which resulted in $1 million in immediate new sales to Japanese customers and $6 million in new contracts with Chinese offices, according to her office.

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Information from: Yakima Herald-Republic, http://www.yakima-herald.com

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