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Deal Will Bring California Grapes to China's Tables

Agriculture: Beijing pact officially lets in fresh produce from the state for the first time, opens door to a huge market.


Opening a potentially enormous market, California table grapes will make their way directly to China for the first time this summer under an agreement announced Tuesday in a Central Valley vineyard.

The agreement between U.S. and Chinese authorities marks the first time a fresh California commodity has gained official access to that market. Until this deal, the only fresh commodities formally allowed into China have been Washington state apples and cherries.

With 1.2 billion people and a fast-growing middle class, China is viewed by everyone from cattle ranchers to car manufacturers as a potential powerhouse.

Bruce J. Obbink, president of the California Table Grape Commission in Fresno, said the state's growers began efforts to get into China seven years ago; U.S. Department of Agriculture officials joined the pursuit three years ago. The Chinese had prohibited fresh products in the past, ostensibly because of concerns about pests.

"There is no magic to this process," Obbink said. "It's the old squeaky-wheel system."

California already ships $257 million in goods to China, led by cotton, fish and beef. Some "gray market" apples, oranges and table grapes find their way into the mainland from Hong Kong, said David Hegwood, a spokesman on trade for the state Department of Food and Agriculture.

However, Hegwood said, U.S. and California officials were eager to reach a formal agreement on table grapes so that marketers could gain more control over how the product is shipped and sold.

The Golden State produces 97% of all fresh grapes in the United States. California production represents a $900-million industry; last year, the state exported 121,000 metric tons of table grapes to offshore markets.

Before granting approval, Chinese quarantine officials visited growing, harvesting, packing and inspection operations in California, including the 100-acre vineyard south of Madera where the export deal was unveiled. California growers agreed to one condition: that they increase the number of medfly traps in their vineyards.

Initially, the table grape commission hopes to sell 1.6 million boxes of grapes in four big central and northern Chinese cities: Shanghai, Beijing, Dalian and Nanjing. The cities' combined population is 34 million.

"If we do a pound per person, we'll do $25 million," Obbink said. Within three years, "we could possibly get $50 million."

Table grapes from four San Joaquin Valley counties--Madera, Fresno, Tulare and Kern--will be sold in China, probably beginning in August, Obbink said. The industry hopes later to add Kings and Riverside counties.

The key to growth, Obbink said, will be persuading the Chinese to reduce tariffs, which stand at 45% on table grapes, and to improve distribution.

Since 1995, China has reduced tariffs on thousands of items as part of its effort to gain U.S. support for its admission to the World Trade Organization. U.S. agriculture and trade officials are meeting in Beijing this week to insist that China work more swiftly to bring its trading system into compliance with WTO standards.

Simply gaining market access is not enough, said Jim Thomas, a spokesman for the Washington Apple Commission in Wenatchee, Wash. Tariffs and taxes, he said, have effectively priced Washington apples out of the Chinese market.

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