Exports hit $66.3 billion last year, nearly $28 billion more than in 2005. The state's Community, Trade and Economic Development Department says one in every three of Washington's jobs depends on trade.
No one disputes that the airplanes, coffee, software and even cherries that Washington ships around the world are essential to the state's economy. But against that backdrop, it has been less obvious how much trade missions led by the state's top officials cost or how much they have contributed to the trade boom — if at all.
Gregoire has led five missions since taking office in 2005; Lt. Gov. Brad Owen has led 16 cultural, educational or economic missions since 1997; and Secretary of State Sam Reed has led six since 2001.
The missions took Gregoire and the other officials, along with entourages of privately funded business representatives and taxpayer-funded state employees, to such places as China, Taiwan, Japan, Australia, India, France, Germany and the United Kingdom.
No one with the offices of the three state leaders has kept a record of the overall cost to taxpayers. But a tally by The Olympian based on a series of public-records requests shows that the missions have cost taxpayers a little more than $380,000 since 2000 — including more than $352,000 for Gregoire's five trips.
Costs for Reed and Owen were less because their trips were underwritten by businesses that paid to go on the missions, or, in the case of several Owen trips, by foreign interests. Owen's office did not have data for trips before 2000.
State officials, including Gregoire, and some business experts say the trips are worth the investment.
"I'm kind of surprised (the costs) are that low," said Debra Glassman, senior lecturer in the finance and business-economics department at the University of Washington's Foster School of Business.
Although some experts say it is hard to quantify the benefits of trade missions, Glassman said that, on balance, the missions are worth it in an international economy for a state such as Washington, perched on the Pacific Rim.
"One thing trade missions give you is the face-to-face meeting … that has power way beyond a telephone call or e-mail," Glassman said. "Many societies around the world are more hierarchically organized than the U.S. is. So the presence of a high-ranking official has value."
That analysis squares with what state Agriculture Director Valoria Loveland, Reed, Owen and other experts — including skeptical academics such as Montana State University economist Tim Wilkinson — say: Trade missions open doors, especially in Asian countries where a government official confers credibility for businesses that are being introduced.
Gregoire said her visit to the Paris Air Show in 2005 helped persuade six of 11 aerospace suppliers she met with to locate or expand in Washington.
"If that isn't a cost benefit, I don't know" what is, Gregoire said.
The first-term Democrat added that her visits to Asia have opened doors to top government officials for those on the delegation.
"I met with the president of South Korea. I met with the president of China. … I met with the president of Mexico," she said.
These efforts, Gregoire said, have led to five new direct-to-Seattle air routes that will make business travel easier between Washington and China, Europe and Mexico.
Two more routes — from London via Northwest Airlines and Beijing via Hainan Airlines — are to begin in June, said Gregoire's director of international protocol, Brent Heinemann. Other new routes established with Gregoire's help involved Lufthansa, from Germany, as well as Air Mexico and Air France.
Gregoire also reopened beef exports to Taiwan by having talks with officials there after the mad-cow disease scare by assuring that the state would export Washington-born and raised beef only.
Gregoire trips cost more
But trade-mission costs under Gregoire appear to be roughly twice per mission what former Gov. Gary Locke spent on his first seven missions, which totaled a little more than $205,000, according to a 2004 report by The Olympian based on data Locke's administration provided.
Heinemann, who has organized missions for four governors, said Locke and Gregoire stayed in the same hotels in some instances and took state employee delegations of roughly the same size — averaging 14 for Gregoire and 13.7 for Locke. They included staff members from the Department of Agriculture, the Community, Trade and Economic Development Department, and the State Patrol.
"I would guess we're doing a better job of gathering that information" on costs under Gregoire, Heinemann said.
He also said taxpayer-reimbursed costs were limited to what the federal government's per diem rate was for each country. Those limits are usually enforced, although a spot check of expense reports by The Olympian did show some high bills, including Gregoire's $410 hotel bill for each of three nights in Paris in 2005.
The federal recommended rate was $280 for Paris at the time, but Heinemann said the state got a late start on that June trip during Gregoire's first year, so an exception was made under state rules that allow up to 150 percent of the federal rate — or $420 in the case of Paris that year.
"The Paris air show takes up virtually all the hotel rooms in Paris. A lot of people book one year in advance," Heinemann said, adding that the state got rooms in the Westminster Hotel because they were available. "When you book later, you have to pay a premium."
Governors taking on roles overseas
Governors nationwide have been going on missions overseas since 1959, when North Carolina Gov. Luther Hodges went to Europe "to recruit foreign investment" — a move that later helped create Research Triangle, N.C., said Lucas McMillan, a University of South Carolina graduate student who is writing his doctoral thesis on the evolving role of governors in international trade.
"We can see the governorship has been transformed to not just deal with roads and schools and not to deal with economic development just in a domestic sense but in an international sense," McMillan said.
In that light, Washington's trips are not unusual — except perhaps that the lieutenant governor and secretary of state also have led some.
Missions have skeptics
Paul Guppy of the free-market-oriented Washington Policy Center in Seattle has criticized the $300,000 taxpayer cost of foreign trade fairs, but he had no problem with Gregoire spending $352,000 for five missions in four years.
"That's not alarming in itself," he said. He thinks it is part of a governor's job to open doors and help make introductions in new markets.
Guppy said his alarm bell would sound if there were four or five trips a year. Even so, he expressed some doubts when told that Reed has taken his wife along on a trip to India or that Owen takes his wife on some trips.
Reed said foreign officials expect the spouse to come along, and one foreign embassy recently postponed a dinner when it learned Margie Reed would not be available.
Guppy said he also had qualms about one trip Owen took to Peru — to dedicate a fire station and deliver U.S.-donated fire equipment.
"If it is opening doors and making introduction to officials in other countries, that's official business. If it's opening firehouses in foreign countries, it starts to look like a boondoggle, like somebody is securing a fun trip for themselves. That's something taxpayers need to keep an eye on," Guppy said.
State Sen. Cheryl Pflug, R-Maple Valley, went with Owen to Brazil last year and with Gregoire to Japan in 2005, both at her expense, she said. Pflug said Washington did well by hosting a big dinner for major businesspeople at the U.S. Embassy in Tokyo.
But state officials didn't listen to what Japanese industrial leaders were saying, Pflug said. Gregoire wanted to talk about Washington's educated work force, but a leader with Mitsubishi Heavy Industries wanted to know what the governor would do to end a strike at Boeing at the time, Pflug recalled.
On the other hand, Pflug said she favors going on missions and thinks there should be more of them.
Some direct benefits
The missions pay off, say state trade officials such as Mark Calhoon, managing director of the state's international trade program. Calhoon cited a state trade report for 2007 showing that China became the state's top export market that year, eclipsing Japan.
Clients had $42 million in sales as a result of state efforts that year — including "$516,000 in immediate sales" as a result of Gregoire's trade mission to Korea and Taiwan in 2006; $6.8 million in sales were projected, the report says.
But those sales are peanuts next to the $66 billion in state exports last year, led by the $41.8 billion in aerospace-related exports in 2007.
Even so, Gregoire has harped on trade in her public appearances around the state, pointing out that exports are a big part of the reason Washington's economic outlook is healthier than the rest of the country.
Saint Martin's gains international students
Saint Martin's University in Lacey also benefited after sending two leaders on Gregoire's Taiwan-Korea mission in 2006. The college later forged three sister-university relationships in Taiwan and South Korea, said Josephine Yung, associate vice president of international programs and development. That built on previous trips Yung took in 2004 with Owen to China and in 1997 with Locke.
The university had 113 international students enrolled in 2007, up from 87 in 2005 and twice the level of 1990. Most students have come from Japan in recent years, but last year most students came from China. As a result of the 2006 mission, all three sister universities have sent students, and Saint Martin's expects additional foreign students from Taiwan starting in June.
"What we are doing is (serving as) cultural ambassadors," Yung said of the college's international studies efforts, which she said have an economic effect over time as some students return to the United States for business or tourism.
Eliminating trade barriers
Gregoire has at times resembled a saleswoman in chief. She pitched french fries in Taiwan, donned a Costco apron to hawk cherries in Mexico and talked up Washington wines in China.
Loveland, the agriculture director, said results are obvious. The mission to Mexico helped clear away a requirement that Washington soft fruits, such as peaches, be fumigated, just as similar requirements were eliminated for cherries and peaches going to Taiwan after the 2006 mission. The Mexican requirement had been triggered because the sealed shipping containers went via Long Beach, Calif., where certain pests were a problem.
Once Gregoire and Loveland explained that opening containers in California actually could introduce pests, the requirement was dropped, and Washington growers saved money, Loveland said.
State agriculture exports totaled $6.72 billion in 2006, according to the international marketing report the Department of Agriculture issued last year. Of that, the agency assisted in $62.5 million in sales, which raised $2.5 million in new taxes for the state and about $2.50 for every $1 spent on helping the markets, including Agriculture's share of trade mission costs, Loveland said.
Similarly, Reed cites $10 million in contracts won by Seattle-based supercomputer maker Cray as a result of doors opened by Reed's 2003 mission to India, which cost taxpayers $2,441. Reed said the company recently has been in negotiations for $17 million more in sales.
Owen reports similar successes and says that big names such as Boeing have asked him to put in a word for them. Once, Owen called on a Taiwanese transportation minister when Boeing was negotiating a jet deal.
Owen defended the Peru trip to dedicate the fire station. That trip cost taxpayers $3,516, including the State Patrol officer to protect the Owens.
"We in America have a very generous heart," Owen said, when asked to justify the costs. "If we can help people in another part of the world, I don't know if that is a bad thing."
Skeptics say benefits are circumstantial
Wilkinson, the Montana professor, said his research shows a correlation between state-run trade offices in a foreign country and results — a finding that would support Washington having nine trade offices. Those offices cost about $741,000 to operate under contract in the 2008 budget year, including one in Beijing that opened about a year ago.
Wilkinson said he has grown less skeptical over time, but he has little evidence to prove the worth of trade missions.
"We don't have much to support their effectiveness. The flip side is that does not mean they are not effective," Wilkinson said. "However, ... I have been able to correlate between the trade shows and an increase in exports."
He said there is more evidence of results when a mission targets giving access to markets for small and medium-size businesses. At the same time, he said, "Governors and state officials are important to have on trade missions because they can open doors."
