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Free Trade: Opening trade doors is good business |
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Written On: March/April 2007 |
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Written By: by Daniel Brunell |
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One of the first recorded trade missions was mounted in the 2nd century B.C., when Chinese Emperor Wu of the Han Dynasty dispatched Zhang Qian to Pathia—in what is now Afghanistan and eastern Iran—to establish trade relations. The emperor was seeking to obtain the tall and powerful horses that were important in fighting the nomadic Xiongnu people of modern-day Mongolia, who had repeatedly invaded China’s territory. This mission opened the way for later traders and explorers—including Marco Polo in the late 13th century—to bring spices, silk, porcelain and other goods to the western world via what became known as the Silk Road.
More than 2,000 years later, the commerce between Asia and the West has never been more vibrant. According to the U.S. State Department, five of the top 10 U.S. trading partners in 2005 were in eastern Asia and the Pacific Rim. China, Japan, South Korea, Taiwan and Malaysia accounted for more than 25 percent of U.S. international trade. The U.S. has trade relations with every country in the region except Myanmar and North Korea.
Trade with Asia is vital to Washington. Six of our top 10 export customers are there. Japan, China, Taiwan, South Korea, Singapore, and Australia imported more than $18.5 billion in trade originating from this state in 2005. Washington firms like Boeing, Weyerhaeuser, Costco, Starbucks, Microsoft and PACCAR have all been major players in Asia for years. A third of all Washington state agriculture is shipped to Asia. The state’s premium wines, cherries, and berries are joining apples, pears, beef and grain as major export commodities.
With so much at stake, maintaining a good relationship with our Asian trading partners is vital, and trade missions are an important tool that helps us do this. The missions range in size from small groups in a specific field to large, multinational trade missions led by the governor, business leaders, and other high-ranking representatives. "These trade missions help producers maintain and open new markets around the world," said Valoria Loveland, director of the Washington State Department of Agriculture. "The federal government may make the trade agreements, but what we try to do is put a human face on it."
Last October, Gov. Chris Gregoire and AWB President Don Brunell led a trade delegation to South Korea and Taiwan. The delegation promoted Washington products everywhere they went, meeting with prominent business and government leaders in both nations. In addition, representatives from many of Washington’s state technical colleges and universities signed student exchange agreements with sister schools.
One of the participants was Kyle Sides, director of sales for Sharpe Mixers of Seattle. During the South Korean leg of the trade mission, Sides met with an engineering company that expressed an interest in promoting Sharpe’s stainless steel industrial mixing equipment.
"Meeting people face to face makes a big difference," said Sides. "These trade missions help us meet potential new customers and tell officials of both the state and foreign countries about the challenges we face getting our product into different markets. For example, we’ve seen a lot better market for our mixers in China because it is cheaper to get into that market than Korea."
The trade mission had special significance for two delegates: state Sen. Paull Shin, D-Edmonds, and Dr. ChangMook Sohn, executive director of the Washington State Economic and Revenue Forecast Council. Both are natives of South Korea and can bear witness to South Korea’s remarkable growth.
"In 1962, South Korea was the fourth poorest country in the world," said Shin. "The best thing we did to improve conditions in Korea was to bring Korean students to the United States to be educated. These students went back to Korea with a strong social connection to America, and they are one of the reasons that our two countries are so close."
In recent years, the United States has been aggressive in negotiating and expanding its trade footprint in the region. Since 2000, the United States has been easing trade restrictions and setting up free trade agreements with east Asia nations. Agreements have already been signed with Singapore (2004) and Australia (2005). The United States is currently negotiating with Malaysia, Thailand and South Korea.
The impact of free trade agreements is huge. "This is probably the most commercially meaningful free trade agreement for Washington state since NAFTA," said Juli Wilkerson, director of the Department of Community, Trade and Economic Development. "Although Korea is the state’s sixth most important export market, there are still trade barriers that prevent Washington state exports, particularly in agriculture."
Trade talks have been hampered by the recent "mad cow" scare in the United States and by Korean farmers who fear American agricultural imports will devalue their crops.
These concerns are being addressed and negotiations are moving forward. "This agreement is very important to the United States, particularly Washington state," said Shin. "I think it’s going to happen this year. I believe that this will be a great opportunity for everyone in both eastern and western Washington."
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