Killea Shifting Stance on World Trade Thrust : Assemblywoman Wants to Make Sure State Is Getting Its $10 Million’s Worth

As World War II came to a close in 1945, Lucy Killea was working for a U.S. Army intelligence unit, educating policy-makers about the dramatic changes taking place on the civil and political map of Europe.

Today, Killea, a Democratic assemblywoman from San Diego, is pushing to educate California business people and government officials about some much more subtle changes happening the world over.

With the U.S. trade deficit at an all-time high and businesses of all sorts seeking ways to dent foreign markets, Killea, chairwoman of the Assembly International Trade Committee, thinks she has some of the answers.

“We hear from disillusioned people all the time, and they say, ‘I just can’t get through to those people (foreign businessmen), they don’t understand my product,’ ” Killea said in a recent interview. “That person doesn’t understand the culture, doesn’t understand the people, doesn’t understand the market. This is where the problem is.”

Killea has had her share of cultural exchange. She left the Army to work briefly as an analyst for the upstart Central Intelligence Group (now the CIA) and then married a man who went on to be a middle level official in the Foreign Service and U.S. consul general in the Mexican cities of Monterrey and Tijuana.

“That kind of experience makes you sensitive to other people’s points of view and how they think, and it gives you a realization of how insular Californians are,” she said. “We need to change from an insular, self-sufficient kind of attitude to a more global one--not in the sense of embracing anyone because we think they’re better than we are, but simply for our own self-interest to learn about the rest of the world.”

Since being elected to the Assembly in 1982, Killea has been one of the strongest cheerleaders in the Legislature for Gov. George Deukmejian’s 20-fold increase in funding for trade promotion and financing efforts, which are intended to help the state’s economy by creating new jobs and higher incomes for California companies. By her own estimate, Killea spends more than one-fourth of her time on the issue.

But Killea, a former San Diego City councilwoman, has of late been shifting from unabashed booster to in-house critic, gently questioning whether the state is getting its money’s worth out of the more than $10 million a year now spent on world trade promotion. When Deukmejian took office in 1983, that figure stood at about $500,000 a year.

“When you start to budget more than $10 million for trade and investment promotion at the state level, it’s time to consider how the money is being utilized,” Killea said.

Her suggestions include:

Streamline and combine many of the state’s foreign trade efforts, which are scattered through the Commerce Department, the Department of Food and Agriculture, the Energy Commission, the state World Trade Commission and the governor’s office.

Appoint a full-time director or coordinator of international trade in the governor’s office. That job is now being done on a part-time basis by James W. Robinson, Deukmejian’s director of communications.

“They (the governor’s office) should have a strong office with a full-time staff, certainly a director and a couple of people, who are dealing only with international trade and international issues,” Killea said. The director, she said, should be someone “strong enough who has the ear of the governor and has some clout.”

Robinson, she added, would be “great if he were spending full time on international trade.”

Evaluate the operation of the state’s newly opened foreign trade offices in Tokyo and London to ensure that their efforts are meshing well with the California-based elements of the state’s trade program.

“I don’t think the offices are getting the help they need,” Killea said. “I think what’s going to happen if we wait too long, everybody is going to say, well, they didn’t do anything so let’s close them down.”

Establish a “loan to lenders” program under which the state would lend money to banks, which would then pass the funds on to small exporters. This would supplement the state’s new export finance program, which offers collateral or loan guarantees to help exporters obtain conventional bank financing.

Provide matching grants for overseas promotion to small and medium-sized high-tech exporters to complement a similar, $5 million-a-year effort dedicated to agriculture.

“The point is to give them some support in marketing,” Killea said. “The export finance people are doing it on the financing side, but in terms of exploring the market and exposing the foreign market to some of the California goodies we’d like them to purchase, it’s very difficult.”

Create a more professional protocol office to coordinate visits to California by foreign government and business leaders and to assist California officials who plan to travel abroad. The state World Trade Commission recently formed a one-man office to help receive visitors but will continue to use a voluntary director of protocol to handle high-level dignitaries.

Killea’s suggestions, many of which echo recent recommendations by Lt. Gov. Leo T. McCarthy and the Little Hoover Commission, a state panel that studies government efficiency, have brought the usually non-confrontational lawmaker into a quiet butting of heads with the Deukmejian Administration.

Publicly, the governor’s trade coordinator praises Killea’s efforts.

“She has decided to make this a priority and we welcome that,” Robinson said. “By making it a priority in the Legislature, she has provided that bipartisan element which is very important in terms of the posture we present to the rest of the world and to our policy-makers in Washington, D.C.”

Suggestions Rejected

On the other hand, Robinson rejects many of Killea’s suggestions, for various reasons.

Her recommendation that trade efforts be consolidated within the governor’s office is just the opposite of the course the Administration is now pursuing.

“There’s a sincere debate about that,” Robinson noted. “We don’t want to end up like Washington, D.C., with eight or nine competing agencies all trying to take the lead. Our approach is to have the governor’s office serve as an umbrella authority, trying to pull together the various state agencies involved in trade and investment.

“Why not pull all the state’s trade programs into some kind of super office or department? Our goal is to internationalize all the state agencies that need to be aware of international opportunities, rather than trying to draw strict little lines around people’s functions.”

Work ‘Double Time’

As for Killea’s suggestion that the state needs a full-time trade director, Robinson said he works full time at his trade duties and full-time as director of communications, “adding up to double time.”

“We feel the program is being well managed and the existing structure is sufficient,” he said. “We’re going to be continually monitoring this as the program grows and evolves, and we’ll make whatever adjustments are necessary. This is a program we consider our child, and we’re certainly not going to do anything to let it lose some of the great momentum it’s gathered.”

Robinson said it is too early to decide whether to give marketing subsidies to the high-tech industry similar to those now being handed out to agriculture, which have been criticized by Killea and others for catering too much to large, established exporters.

He said existing state programs to help small exporters attend international trade shows and to put together financing for their overseas shipments represent a significant effort.

‘Doing a Lot’

“The state is doing a lot to promote industries other than agriculture,” Robinson said. “The question is, what kind of promotion? Whether it’s time to duplicate the specific approach used in terms of agriculture, I’m not sure. I’d like a little more time to evaluate how the agriculture matching-grants program has worked.”

Killea’s proposals have found a little more support in the quasi-independent World Trade Commission, which is administered through an 11-member board appointed by the governor and legislative leaders.

Gregory Mignano, the commission’s executive director, said he thinks the time may soon be right for consolidating trade efforts under the governor.

Offers Recommendation

“It’s been suggested that the state needs a ‘trade czar,’ and that’s probably not a bad idea,” Mignano said. “As long as the various agencies of state government have some sort of trade programs, there ought to be a coordinating authority who can sit down with Cabinet secretaries and the like. I think a senior staff person in the governor’s office should be that person.

“I think my recommendation would be to go ahead eventually and think about creating a governor’s office of world trade.”

For the moment, though, Mignano, like Robinson, said the programs are working well.