Stateline Story

Governors Hunt Business Abroad to Boost State Economies

  • October 20, 2003
  • By Bennett Clark

Coffee lovers attending the 2008 Olympic games in Beijing might be able to satisfy their caffeine cravings with one of Starbucks' signature lattes.

If so, they'll have Washington Gov. Gary Locke (D) to thank.

Locke returned Saturday (10/18) from China, where he lobbied to get Starbucks and scores of other Washington-based companies a slice of the $26 billion pie the Chinese government has set aside for the games.

Other governors have also turned their sights abroad in recent weeks. Oregon Gov. Ted Kulongoski (D) traveled to Germany and The Netherlands during the first week of October. Minnesota Gov. Tim Pawlenty (R) spent Sept. 28-30 in Montreal promoting his state's biotechnology industry.

Such trips represent a high stakes opportunity for governors to land lucrative trade and investment deals for their states, though it's hard to measure the exact magnitude of the impact of their travels on a state's economy.

Sending governors abroad is not inexpensive. Pawlenty's trip to Canada cost Minnesota $20,000, with Quebec paying for much of his security detail, according to Dan Wolter, the governor's director of communications.

Development officials from other states were unable to provide exact figures for trade missions, but emphasized that security expenses make them especially costly.

However, the potential benefits trade missions offer to a state's economy dwarf their costs, state officials said.

Mexican brewery Grupo Modelo agreed to build a new barley malting plant in Idaho Falls after Republican Gov. Dirk Kempthorne's visit to Mexico City in 2001. State officials estimate that the plant will process $17 million worth of barley annually. That figure represents more than 10 percent of the state's barley revenue in 2002, according to the Idaho Agricultural Statistics Service.

Kempthorne's office estimates that the Modelo project will generate a total of $128 million in investment and taxes for Idaho.

Gubernatorial trade missions can also result in policy changes..

During an official trip to Asia in 2000, Iowa Gov. Tom Vilsack (D) lobbied the Japanese government to revise its inspection requirements for organic and non-biotech grain and soybeans, according to Dick Vegors, an international marketing manager with the Iowa Department of Economic Development. Japan ultimately agreed to permit American growers to contract with companies to inspect their products on behalf of the Japanese government.

"It [the old policy] would have made it just about impossible for Iowa producers because they would have had to pay the expense of the inspectors to travel over here [to Iowa]," Vegors said.

Corporate executives use governors' star power to get meetings with potential investors and customers. Seventy business representatives accompanied Gov. Locke to China, the Seattle Times reported.

Economic development specialists said businessmen and women typically pay their own way when they travel with governors, and sometimes subsidize the governor's expenses as well.

According to Robert Sutton, a spokesperson for the Alabama Development Office, it can take several years for a business to reap the benefits of a trade mission. A