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How Valuable Are Gubernatorial Trade Missions?

By Jock O'Connell

This is the author's text of an article that appeared in the Los Angeles Times Opinion section on Sunday, November 12, 1999.

During the 1986 gubernatorial campaign, Democratic candidate Tom Bradley sought to portray his opponent, incumbent GOP Gov. George Deukmejian, as so indifferent to the needs of the state's international trade community that he did not even own a passport. While the jab by the peripatetic L.A. mayor failed to win him the election, it did raise what now seems a quaint issue: Does the state's chief executive have a legitimate role in promoting exports and attracting foreign investment? Today, the answer seems a self-evident ‘‘yes,'' and, in our rapidly emerging global economy, a California governor so uncosmopolitan as to be without a passport seems positively antediluvian.

But heaven help him should he actually try to use it.

Nothing, it would seem, evokes the envy and spite of friends, neighbors and co-workers more than foreign travel. And a gubernatorial trade mission is no exception. Whenever Deukmejian, who made several trips abroad during his second term, or Pete Wilson or, most recently, Gray Davis dared venture outside the country, virtually every aspect of their travels were closely scrutinized.

In the eyes of many, trade missions are merely taxpayer-financed foreign holidays. Far from promoting the state's economy, they are viewed as a means for governors to further their political interests and reward big-time contributors who gave early and often to their election campaigns. Similarly, travel itineraries are dissected to suggest that the nations visited were selected to please key constituencies. It's a wonder any governor travels overseas.

Governors and their aides know that foreign trade missions are bound to be controversial. To deflect much of the expected criticism, the trips are designed with an eye toward playing well in the media. This means larding the schedule with photo opportunities and sound bites featuring discussions with foreign-trade officials, tours of industrial sites, speeches to business groups, and meetings with as many presidents and prime ministers as possible. Sightseeing is kept incidental. Above all, since bacon must be brought home to appease a cynical press corps, announcements of trade agreements and business deals are de rigeur.

The problem with all this aggressive stage management is that what makes these trips appear useful in the eyes of the media and general public is also what tends to make them seem so inconsequential to members of the international business community.

Especially with mega-states like California, it is virtually impossible for a governor to make any appreciable difference by personally taking a hand in promoting exports and investment opportunities. Consider the context. The oft-repeated claim that the Golden State is the world's seventh-largest economy scarcely does justice to the reality of an infinitely complex industrial dynamo that generates more than $1 trillion a year in economic activity. Our merchandise export trade exceeds $100 billion annually, while exports of services probably amount to another $50 billion a year. Each day sees over 10,000 separate export shipments by California firms. At the same time, some of the state's fastest-growing industries, most notably in the information technology and computer software sectors, earn billions from worldwide sales by manufacturing and distributing their products overseas. Against the backdrop of all this heavy lifting in the private sector, the few deals typically announced in the wake of gubernatorial trade missions are not statistically significant.

Perhaps Deukmejian's initial reservations about getting into the business of trade promotion should not have been dismissed so readily. It has been several decades since California's voters elected a chief executive with private business experience. Instead, our governors have been consummate politicians, and their appropriate milieu, the area in which they can really make a difference, is the arena of public policy.

Arguably, the most successful foreign trip ever made by a California governor was Davis' visit to Mexico within a month of his taking office earlier this year. The value of that trip lay not in any mundane commercial deals but in its political symbolism: It dissipated a malignant cloud that had hung over relations between Mexico and California ever since Pete Wilson determined that the advancement of his political career required the demonization of all things Mexican.

The truly important aspect about Davis' recent trade mission to Europe and the Middle East is that, for the better part of two weeks, the governor immersed himself in the world of international commerce. As with his trip to Mexico, any actual business he may have played a hand in promoting will be far less significant than the knowledge he gained from the experience. It is this newly acquired, first-hand knowledge that, as governor, he can most usefully apply to public policy.

The Davis administration has promised a comprehensive review of state government's trade policies and programs. By common judgment, the state's export and investment promotion programs are in desperate need of a major overhaul. First established in the 1980s, many of these programs have failed to adapt to monumental changes in the global trading system. The state's overseas-office program is better suited to the needs of political theater than the realities of international business. After his latest overseas trip, the governor is better prepared to guide this review.

More importantly, the trip has given Davis that extra measure of credibility necessary to more effectively advance California's global trading interests where it most counts—in Washington. In no other way can a governor better serve California's international business community than by ensuring that this state's often distinctive interests are more adequately reflected in federal trade policy and in the positions of U.S. trade negotiators. Ironically, the governor may even conclude, as many members of California's international business community have, that the state's principal foreign-trade office should be located not in Europe, Asia or Latin America but in our nation's capital.

Copyright © 1999 By J. A. O'Connell