California State World Trade Commission example essay topic

In the article No State Strategy for Trade, author Jock O'Connell elaborates about the possible ramifications of the State of California's recent decision to abolish the California State World Trade Commission (WTC). Despite the fact that California is one of the worlds foremost economies, with sizeable stakes on what decisions will be made, this month the World Trade Commission will represent California at the negotiating table regarding the reduction in trade barriers in Cancun Mexico. In this article, O'Connell describes the rise and fall of the commission and further offers his interpretation of a possible resolution in the handling of the state's trade related matters for the future. According to a report published by the San Francisco based Public Policy Institute of California, the state has different trade interests than other states. California firms rely more heavily on exports than do other United States companies with exports representing 10% of California's economic output, as compared to 7.6% for the rest of the country. This mix of products ranges from produce, fruits, wines, nuts, and manufacturing of high-technology products.

Other parts of the country export items such as soybeans, and raw grains. This output makes California more reliant on the Far East than other parts of the United States. Despite the heavy trade out of California, Governor Grey Davis signed a budget eliminating the California Technology, Trade, and Commerce Agency, as well as the California Sate World Trade Commission. This cost saving move has been highly criticized leaving people wondering what will be the next step. (O'Connell, 2003) According to O'Connell, for at least a decade no one has really been minding the California store with regards to foreign trade.

Beginning in 1993, the California State World Trade Commission was absorbed into the California Technology, Trade, and Commerce Agency. After this period O'Connell suggests that the entire commission was in some way a smoke screen; "political operatives whose prime directive in running the trade agency was apparently to smother any original thoughts or policy initiatives that might venture their way". Essentially, for ten years California has been supporting salaries and the commission has been producing little to no global growth ideas or results. The commission became a public embarrassment over these years as individuals were appointed to the commission with no international trade experience.

While the international trading world has been thrust into ever changing technology with continuous advancement in communication, transportation, global supply chains, and "successive waves of trade liberalization", California has been operating under the concepts that were established in the 1980's. All of this has been happening while California has continued to have increases in export trade, now representing a $100 billion a year. (O'Connell, 2003) So, with the abolishment of the commission's that have previously (albeit poorly) represented California's trade interests, O'Connell suggests a new approach. His approach would be to reconstitute the California State World Trade Commission as an "independent, privately financed commission of bona fide international business people, economic development officials, and trade economists". This revised commission would hold the responsibility of representing California in ensuring its future and competitiveness in global trade. Since Haas Automation, Incorporated is both a California based company, and a large export company with approximately 35% of its total revenue volume export based, these recent decisions could have a major impact on the company.

Haas exports computer numeric controlled milling machines, as well as replacement parts worldwide. The impact could be tremendous. Haas is currently expanding its international focus. The most recent change was the introduction of the Haas Factory Outlet in China. This expansion will continue into numerous markets in the upcoming years.

Haas intends on growing its international market to match the current level of its domestic business. This means Haas current export business is approximately 105 million it is intended to grow by 200% to just over 300 million annually. One thing of notice from O'Connell's report, California is not going completely unrepresented as the WTC will keep a watchful eye over California's trade interests. Likewise the WTC will represent California at the meeting to be held this month in Cancun. The question is does this individual know the impact he or she could have such a large export region? Another interesting point in O'Connell's description of recent years is, if there have been virtually no changes in the past decade then the interim is not likely to shutdown California exporting, as business will continue as it has in the past, however a gate keeper is necessary down the road to foster improvements.

The idea of having qualified economists representing the state, as well as true business people that have a vested interest seemingly is a great way of making sure the state is represented well as a whole. Who better to make the decisions than those that have to live with the choices? If O'Connell's recant is accurate, revamping the export trade commission and reviewing the current situation in California appears to be much needed. From the perspective of someone who works for a California based company that has a significant portion of its overall business conducted through exporting, it is important that this situation gets resolved soon. California is not getting smaller. More exporting will be required and new trade policies, reviews of tariffs, as well as plans for continued growth are an absolute necessity to remain competitive in this ever changing global environment.

Bibliography

O'Connell, J., 2003 No State Strategy for Trade, The Sacramento Bee, August 24, 2003 Available [Online] web Bibliography O'Connell, J.
2003 No State Strategy for Trade, The Sacramento Bee, August 24, 2003 Available [Online] web.