TRADE OFFICES WERE A JOKE, BUT POLITICIANS NOW WANT NEW ONES
By Dan Walters — Bee Columnist

Sacramento Bee, CA
April 19 2006

Creating overseas offices supposedly devoted to improving California’s
international trade was a popular political exercise in the 1980s
and 1990s.

There was no objective rationale for the program, nor any rhyme nor
reason to where the offices were located. Governors and legislators
acted on political whim, driven more by local factors or Capitol
politics than a hard-nosed investment-vs.-return equation.

Finally, the entire program collapsed of its own absurd weight.

Journalistic investigations and official audits established that
the trade offices were less than useless, with their directors –
political appointees all – spending most of their time dreaming up
phantom accomplishments.

At one point, the Legislature’s budget analyst reported that the
state’s Trade and Commerce Agency was claiming credit for any export
or investment that included a contact with a trade office, but could
not document a single specific transaction that could be tied to any
trade office activity. The Orange County Register, in an extensive
examination of the program, declared that the reports submitted by
the trade offices were “often false or distorted.” In many cases,
the newspaper contacted business executives that the offices claimed
to have helped and found that most shunned any benefits.

With the state budget oozing red ink in 2003, the Legislature voted
to shut down the Trade and Commerce Agency and the overseas trade
offices – almost. While financing was eliminated for a dozen offices
in London, Tokyo and other major foreign cities, a paragraph buried
in one of the budget “trailer bills” required the state to maintain
an office in tiny, landlocked Armenia.

Why Armenia? Democratic politicians had been cultivating political
support in Southern California’s large and growing Armenian American
community and wanted to butter up voters by paying official homage
to their homeland. For the past three years, therefore, Armenia is
the only nation with which California has maintained official trade
relations. But that would change if an array of bills now pending in
the Legislature – one with Gov. Arnold Schwarzenegger’s blessing –
is enacted. The state would open a new set of trade offices in Asia,
Latin America, Europe and Africa on the questionable assertion that
they would benefit the state’s international dealings.

At least those involved can’t say they weren’t warned. Jock O’Connell,
an authentic authority on California’s international trade, bluntly
told the Assembly’s economic development committee Tuesday that
the state’s former trade offices were useless and, given changes in
communications technology, are unnecessary today.

“Trade offices are something out of the 1980s,” O’Connell said. “The
world has changed … and yet the Legislature still talks about
trade offices.”

“There’s no desperate need for these trade offices,” O’Connell
continued. “There may be a political need.”

The latter comment hit the political nail on the head. Sponsoring
trade offices has nothing to do with improving international commerce
but – as the example of Armenia indicates – everything to do with
politicians’ desires to stroke significant blocs of voters and
special interest groups in California by giving their homelands
special recognition.

The bills pending in the Senate and the Assembly would open new
trade offices in Mexico, South Korea and South Africa specifically,
or regional offices in unspecified locations in some instances.

Schwarzenegger is backing a bill to create an office in Mexico “and
two international trade and investment offices in Asia.”

The chairman of the Assembly committee, Fresno Democrat Juan Arambula,
seems reluctant to approve a new flock of trade offices and is carrying
his own measure that would require the California Economic Strategy
Panel to conduct a study of the entire issue and report back to the
Legislature in two years.

If the Legislature and the governor were serious about enhancing
California’s international trade, and not just lubricating relations
with California interest groups, they would improve the infrastructure
of the state’s crowded ports and deep-six several other measures that
would drive trade elsewhere by imposing stiff new fees on cargo for
unrelated programs.

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