New Dem Play | Expanding economic opportunity by promoting trade.
Where It's Working | Alaska, Iowa, New Hampshire, Oregon, and Washington
Players | State and local officials
When state and local officials think about expanding economic opportunities, trade promotion is increasingly important. Instant communications with foreign countries through the Internet, along with growing Asian-American, Hispanic, Caribbean, and African-American entrepreneurial communities, make trading goods and services increasingly feasible for firms of every size, and virtually all economic data suggest that jobs related to trade pay significantly more -- export jobs typically have a 13 percent wage premium.
But trade growth does not always happen on its own. The ability of businesses or farmers to import or export depends on good trade relations and policy -- reliable rules and regulations, reduction of foreign trade barriers, and personal relationships that facilitate business-to-business trust -- as well as their own efforts. State and local policymakers can help constituents develop these relationships, and help the federal government make the right choices in its negotiations to open markets and create opportunity for local exporters. New Democrat officials have offered a number of models in both areas.
Former New Hampshire Gov. Jeanne Shaheen, for example, developed a program of foreign trade missions to introduce smaller local business owners to potential customers overseas. Visiting Britain, Canada, Mexico, and Ireland, which together account for a third of New Hampshire's exports, Gov. Shaheen facilitated face-to-face exchange, built trust needed for contract signing, and ultimately fostered new markets for state businesses. This is especially important in small states which depend heavily on small business exports, rather than large multinationals easily able to make contacts for themselves. The missions yielded immediate new contracts and brought in about $500 million in export revenue for the small state's businesses.
Although the missions proved to boost business profit and thus tax revenue, mission costs were low, with about 15 business participants per trip expected to finance their own travel. Mission participants were generally owners of small to mid-sized businesses, ranging from microbrew operator Nutfield Brewing Company to New Hampshire telecommunications firms Globafone and Metrobility, software designer Aprisma, tourism and hotel operators, and manufacturers of chemicals, plastics, and door and window frames.
More recently, Oregon Governor Ted Kulongski has organized missions to Japan and South Korea to promote Oregonian exports in those countries and to attract investment in a broad variety of industry clusters, ranging from agriculture to high technology. Since Kulongoski's election as governor in 2002, Oregon's exports have jumped by 50 percent, from $10 billion in 2002 to $15 billion in 2006.
State and local officials can also help make sure federal trade policies contribute to state export expansion goals. An especially interesting model for this is the one developed by former Alaska Gov. Tony Knowles' in 2000. Knowles began by consulting with state fisheries, lumber companies, and other employers as to the opportunities they saw in overseas markets and the policy obstacles obstructing them. Next, he developed a coherent set of priorities and concerns, and in 2001, filed the set of comments with the U.S. Trade Representative. Alaskan priorities and concerns included reducing fish tariffs in key Asian markets like Japan, Korea, and China, dealing with environmental degradation: fair labeling, sustainable development, and sound management of resources. This allowed the United States to set goals that meet the needs of Alaskan workers, businesses, and agricultural producers.
This formal guidance from state and local policymakers helps the U.S. government set the negotiating priorities that yield the most benefit for American exporters, and understand the most sensitive issues for industries and communities concerned about import competition. Moreover, the U.S. Trade Representative welcomes early advice from state and local policymakers because its officials, charged with negotiating trade agreements, are eager to build political support necessary to approve those agreements in Congress once they are complete.
Trade promotion initiatives such as these represent increasingly important tools for facilitating state and local success in the global economy. Policymakers can draw upon such models and others to get involved quickly and ensure that their constituents have more opportunities to succeed in the increasingly global economy.
The USTR Public Liaison office
www.ustr.gov/
Alaska International Trade
www.gov.state.ak.us/trade/
New Hampshire International Trade Resource Center
www.nheconomy.com/nheconomy/oice/main/
New Mexico Office of International Trade and Mexican Affairs
www.edd.state.nm.us/TRADE/index.html
Virginia Displaced Worker Program
www.commerce.virginia.gov/Initiatives/EconStrikeForce/StrikeForceHome.cfm
Washington State International Trade Division
http://www.cted.wa.gov/portal/alias__cted/lang__en/tabID__112/DesktopDefault.aspx
Trade Fact of the Week: Ten of America's Eleven Top Per-Capita Exporting States Are "Blue States": Each Went Democratic in the Last Three Presidential Elections, Progressive Policy Institute, April 24, 2002
www.ppionline.org/ppi_ci.cfm?
knlgAreaID=108&subsecID=900003&contentID=250421
Idea of the Week: Trade Agenda for a New Decade, Democratic Leadership Council, November 16, 2001
www.dlc.org/ndol_ci.cfm?
contentid=3946&kaid=131&subid=207
State-by-State Export Figures from the Department of Commerce
www.ita.doc.gov/td/industry/otea/state/
Ed Gresser
PPI Trade and Global Markets Project
Progressive Policy Institute
600 Pennsylvania Avenue, SE, #400
Washington, D.C. 20003
(202) 546-0007
egresser@ppionline.org
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