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A Colombian street vendor displays her colorful fruit.

A Colombian street vendor displays her colorful fruit.

Latin America is a diverse region that encompasses over 25 different countries, united by their use of the Spanish language (or Portuguese in the case of Brazil). The region has seen its share of ups and downs in the twentieth century and, although still struggling with poverty, is witnessing growth that has made it a region to watch.

Our nearest neighbor to the south, Mexico, is the largest foreign market for Washington apples, and has imported an average of almost nine million boxes over the past four seasons, in spite of antidumping duties on some shipments of Red and Golden Delicious (the antidumping case is currently being reviewed by the North American Free Trade Agreement Dispute Panel to determine its merit). The continuing controversy surrounding these exports to Mexico has had a side benefit, however, of developing the market for other varieties such as Gala and Granny Smith that are not subject to the duties. In the 2003–2004 season, Gala shipments totaled 489,848 boxes, or 13 percent of Washington shipments to that market, while in 2007–2008, more than 2 million boxes were exported, accounting for 23 percent of the total.

With the increase in varieties available for export, the Washington Apple Commission has increased its promotions to encourage retailers and their customers to try other varieties such as Gala, Granny Smith, and Fuji. For several years, the commission has been partnering with a popular chile seasoning manufacturer to promote the consumption of Washington Granny Smith slices sprinkled with the chile, lime, and salt mixture as a snack, particularly around sports events such as World Cup soccer. The mascot developed for Granny Smith in Mexico is "Chilemon," a soccer-ball–carrying ambassador for Washington apples. Colorful point-of-sale materials, recipes, tastings, and other activities have helped increase the use of Granny Smith in this traditionally "sweet" apple market, resulting in shipments that have more than doubled over the past four years to 445,175 boxes last season.

Further south, in Central America, Washington apple sales have rebounded, due in no small part to the benefits of the Dominican Republic-Central American Free Trade Agreement. Prior to DR-CAFTA, Washington was losing ground to imports of Chilean apples, which entered dutyfree thanks to a bilateral free trade agreement in 2001, while U.S. apple exports were hampered by tariffs ranging from 14 to 18 percent. The Chilean FTA came at a time when better storage capabilities were allowing Chile to ship later into the Northern Hemisphere season and reducing Washington’s traditional selling season prior to the Christmas holidays, when typically more than 50 percent of apples are sold. With the implementation of the DR-CAFTA in the Dominican Republic, El Salvador, Guatemala, Honduras, and finally Costa Rica (in 2008), shipments to the region have increased from 414,517 boxes in 2003–2004 to 1.3 million in 2008–2008, and current season shipments to date are up 18 percent.

With the growth in retail in the Central American markets, the commission is actively partnering with major retailers such as Wal-Mart, which entered the market through the acquisition of national retailers in El Salvador, Honduras, Guatemala, and Costa Rica in 2006. Promotions are designed to maximize the Christmas sales season, as well as help stimulate sales in the late winter and early spring. In countries such as the Dominican Republic, street vendors known as "buhoneros" still play an important role in distribution of Washington apples, particularly during the Christmas season. Giveaways such as caps and T-shirts are favorite incentive items and have the added benefit of displaying the famous Washington apple logo to their customers.

Continuing south, the continent of South America is Chile’s home turf, where Washington apples face the greatest challenges in regaining market share. In the mid-1990s, exports of Washington apples to the region exceeded 2 million boxes, driven primarily by exports to Brazil, Venezuela, and Colombia. With increasing production in Chile, better cold-storage facilities, and Chile’s signing of free trade agreements with Andean Pact countries, Washington exports have fallen to 507,050 boxes in the 2007–2008 season. The countries of this region, like most developing nations, are price sensitive, and the higher freight rates coupled with import duties, mean that Washington apples are limited to the November-January window when Chilean apples do not dominate the market.

Importers and retailers in Colombia, Ecuador, and Peru, have told us that it would be virtually impossible to expand the sales window for Washington apples due to the freight disadvantage as well as Washington’s generally higher f.o.b. prices. However, two free trade agreements show promise for increasing opportunities. The first is the new U.S.-Peru Free Trade Agreement, which came into effect on February 1. Although Peru is still a small market, retail investment is increasing, and retailers and importers are hungry for high-quality apples, particularly from November through January when mainly poor-quality Chilean fruit is available. The second opportunity is on the more distant horizon: the U.S.-Colombia Free Trade Agreement, which is currently on hold in the United States. Estimates of the potential impact of this agreement vary from 5 to 40 percent increases in Washington apple exports to Colombia. These two agreements would enable Washington to capitalize on the window of opportunity and further increase shipments to the region.