California out to spur its overseas trade
International trade is no small potatoes in California's rich and diversified economy, with total exports and imports last year amounting to $56.2 billion and a healthy jump to about $67.8 billion forecast for 1981.Skip to next paragraph
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Impressive numbers, but all the more so when considering the bread-and-water budget the state allocates to development of foreign trade. California's Office of International Trade is operating with a budget of $350,000 this year -- the same as last year -- and its newly appointed director is hopeful of "some increase" in the fiscal 1981-82 outlay. But he admits he's not optimistic.
Still, the director, Floyd Mori, a former assemblyman in the Legislature who was defeated in a bid for a fourth two- year term last November, has ambitious plans to more than just make do with the office's resources.
Mr. Mori was named director by Gov. Edmund G. Brown Jr. in December. His mission: Make the most of an office that has been in business barely three years and that, besides Mori, operates with a staff of just four professionals and three secretaries.A predecessor agency, the state's Department of Commerce, was killed by the budget-cutting ax of Ronald Reagan when he was governor.
Mori wants to strengthen trade ties between California and its major trading partner, Japan, while expanding trade with Canada and the Asian Pacific rim and breaking new ground in trade with Mexico and the rest of Latin America. Because of geography, those markets offer greater potential than Europe, a rich foreign marketplace but one that realistically deals most directly with the US East Coast.
In his first months in office, Mori has wasted no time outlining a strategy of "aggressiveness" in further expanding California's international trade. One objective is to nudge Governor Brown to travel abroad and help beat the drums for the diversified economy that makes California a lucrative market for foreign goods, as well as for the state's production of highly marketable commodities for the international marketplace.
Strapped with a stingy budget, Mori plans to push for greater cooperation between government and private sectors in the promotion and development of overseas business. He aims to break down nonproductive jealousies and take advantage of hooking up with private-sector facilities when and where he can.
One basic goal of his office is to become more involved in trade policy development while becoming more "project oriented." Rather than simply overseeing with no effective power California's day-to-day import-export activity, the office plans to initiate and participate in programs aimed at boosting business. Mori talks of seminars, conferences, round tables, and missions overseas to generate new ideas and new business.
Trade is a two-way street, he frequently reminds state officials, and needs to be developed from both ends. Lest they forget, he points out that California had a trade imbalance of $2.6 billion last year and forecasts call for a similar deficit this year.
It's no secret California has a massive market of 22 million residents, is America's leading producer of agricultural, aerospace, and electronics products and entertainment fare, and is a gateway to the Pacific and the rest of the United States. If it were an independent nation it would rank 5th in per capita gross domestic product, 8th in gross domestic product, and 13th international trade value.
Also not unknown is the state's reputation for fostering an unfriendly business environmet. Mori says there has been progress. Now gone, for example, is the state's inventory tax. And he believes its controversial unitary tax, in which a company's corporate income tax is determined on the basis of its worldwide earnings as well as of those in the state, is getting closer to also being scrapped.
He is working for more coordination and cooperation with private organizations involved in international trade."California has had a high growth economy since World War II," he says. "That high growth has allowed investment and expansion to feed upon domestic growth. But that growth has slowed, and now we're going to have to look to extending our markets overseas. It's a matter of developing an international perspective among business and industry."
All in all, Mori's major problem is to overcome the domestically oriented structure of business and industry in the state. "The international market in the past has not been seen as worth the effort to try, because there've been adequate domestic markets. So we've simply got to begin changing some attitudes in California about the international market."
"If we don't," he warns, "we're going to find ourselves in the same situation as General Motors, Chrysler, and Ford. We're going to be 10 years behind the rest of the world in the international marketplace."
"We'll do whatever we can," he promises, "to alter and adjust that attitude toward a more international, global- thinking economy in California."