Davis Plans to Expand State’s Role as a Major Player in World Trade

Gov. Gray Davis has ambitious plans to give his new administration an unprecedented global reach.

He is planning two foreign trips a year in hopes of encouraging the kind of commercial trade that already generates nearly 25% of the California economy.

He also wants to add at least three foreign offices to the nine the state has already opened around the world, almost all in the last decade.

The governor’s plans reaffirm a continuing shift in California’s perception of itself as a world player. Barely a decade ago, many lawmakers scoffed at overseas offices and international trade missions as useless perks or junkets.

But in the early 1990s, foreign trade was the major economic force that pulled the state out of its recession. California exports, now more than $100 billion a year, have grown nearly 40% since 1992.

To counter the economic downturn during his administration, former Gov. Pete Wilson doubled the number of California trade offices around the world. Today, at a cost of about $6 million per year, the state has staff in Hong Kong, Tokyo, London, Frankfurt, Mexico City, Taipei, Johannesburg, Jerusalem and Seoul.

Wilson was circumspect about the political appearance of overseas travel. During his eight years in office, Wilson took just four international trips--one to Mexico, two to Asia and one to Europe.

On his first trip to Asia in 1994, Wilson raised $140,000 in private contributions for the tour. But even then, state Democratic leaders blasted the journey as an “Asian excursion” and ordered an investigation, which eventually found that Wilson’s fund-raising was proper.

Today, Davis will probably avoid similar political criticism for his international plans. Officials from both parties say there is a much broader consensus in Sacramento now about the economic benefits that come from strong foreign relations.

“By and large, I think people understand that we are a global player,” said Sen. Jim Brulte (R-Rancho Cucamonga), a member of the legislative committee assigned to foreign trade. “As a general view, I tend to be very supportive of these things. We are a state that thrives on trade.”

Lawmakers are more likely to debate where the next foreign offices should be located than whether the state should expand its global reach.

Before his term ended in January, Wilson was already planning for five more state offices, in China, Brazil, Singapore, Poland and France.

So far, Davis has agreed on the need for new offices in Brazil and Singapore. He also wants to add one in Canada, the state’s third-largest trading partner behind Japan and Mexico.

Davis has focused most of his attention on Mexico, which is growing rapidly as a California trading partner.

Just three years ago, California exported more than twice as many products to Japan as it did to Mexico. But exports to Mexico have grown 33% in the last three years, while economic troubles in Asia have caused California exports to Japan to drop 8%. As a result, Mexico is now poised to topple Japan as the state’s largest trading partner.

The governor underscored Mexico’s economic and cultural value by visiting the country just one month after he was inaugurated in January. In May, he continued a red-carpet diplomacy effort by escorting Mexican President Ernesto Zedillo on a three-day tour of California.

But there has been similar goodwill communication with other countries. In all, after just five months in office, Davis has talked with four foreign chief executives, including those of Japan, China and Singapore.

“This year I thought I should visit the key states in the U.S., and California is the first state I am visiting,” Singapore Prime Minister Goh Chok Tong said during a recent visit to the state Capitol. “We do indeed have very close ties to California and our trade ties are growing over the years.”

At the meeting, Davis accepted Goh’s invitation to visit Singapore next spring. The governor also expects to tour Europe this fall.

Singapore has launched a $1-billion effort to increase computer and electronic trade, which makes up about half of California’s exports.

Leslee Coleman, executive director for the American Electronics Assn. in the Bay Area, said computer makers are very happy with the governor’s outreach and the plans for new foreign offices.

“If there is a California office, we refer [companies] there,” she said. “We are very lucky and very excited about the possibility of these new offices opening up.”