THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, October 2, 1996 TAG: 9610020581
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: 110 lines
With corporate executives in tow - from the small-business owner to the well-known like Lee Iacocca - governors and mayors are flocking overseas, a testament to Main Street America's rising dependence on foreign business for its economic health.
No country is too poor, no business too arcane, no dignitary too minor for politicians trying to promote exports and attract foreign investment and tourists.
``People get caught up with competition right around our borders. We really have to get beyond that and understand that we live in a global economy,'' said Peg McCormick Barron, a spokeswoman for Pittsburgh Mayor Tom Murphy, who in July went to Japan on his first foreign trade trip.
Ohio Gov. Voinovich has journeyed overseas seven times since 1991. North Carolina Gov. James B. Hunt traveled to Mexico, Japan and Israel in 1995 alone, while Washington's Mike Lowry became the first U.S. governor to visit Vietnam since the Vietnam War.
Virginia Gov. George F. Allen has traveled on three trade missions since moving into the governor's mansion. He journeyed to Mexico and Canada to support NAFTA-related ventures. He visited Europe and the Far East in 1996 alone, hitting countries like Germany, England, Japan, Korea and Hong Kong. Announcements of multimillion dollar contracts or new investment ranging from port agreements to a $15 million Sumitomo Corp. expansion followed the most recent trips. His wife, Susan, even traveled to South Africa to promote tourism.
Allen has received praise for allowing Virginia business people, economic development officials and local leaders to participate in his foreign trade missions.
``These businesses have brought home more jobs, contracts and opportunities for Virginians,'' as a result of their travels with the governor, said state spokesman Morgan Stewart. ``Gov. Allen has made economic development his No. 1 priority and he's insisted that we have to open our doors to international markets.''
On Tuesday, Allen again claimed to hit pay dirt on foreign soil. He announced from Warsaw, Poland, a joint venture between Virginia-based RADVA Corp., and Polish housing manufacturer Ppuh Styrobud.
RADVA manufacturers equipment to produce pre-fabricated sections assembled into houses and industrial buildings. The company employs 150 and has operations in Portsmouth and Radford.
Styrobud and RADVA will form a new company that will operate in Poland. Equipment to the new venture will be shipped to Poland through the port of Hampton Roads.
Governors led at least 66 missions abroad last year, hoping for such results. Mayors - from big cities such as Los Angeles to smaller places such as Syracuse, N.Y. - have joined the exodus.
In wealthy nations like Germany and Japan, they woo customers for exports as well as investors who can build factories and create jobs back home. Alabama's leaders, for example, persuaded Mercedes-Benz to build a plant in their state by offering $253 million in tax incentives.
In poor countries such as China and India, politicians focus on cultivating ``emerging markets.''
Even before President Clinton lifted a U.S. economic embargo on Vietnam in February 1994, American companies jockeyed to sell the Vietnamese everything from bulldozers to toilet fresheners. Lowry led a 20-member delegation to Hanoi after trade resumed, and he signed an agreement with Vietnam's Trade Minister Le Van Triet.
However, added business between Washington state and Vietnam has been slow to develop. One reason is high U.S. tariffs on Vietnamese goods, a federal impediment that Lowry, despite his delight at the trade pact with Triet, is powerless to remove.
The usefulness of these taxpayer-financed trips is often hard to gauge. Sales and investments can take years to materialize, even if a governor signs a formal commitment with a foreign leader.
Voinovich's delegations have cost Ohio taxpayers approximately $80,000, but those trips have generated $414 million in exports for companies such as Spirex Corp., said James Sisto, a trade specialist with Ohio's state development department.
But delegations frequently yield nothing more than pledges of future cooperation, particularly in Asian nations where relationships can count for more than competitive pricing.
``You don't go on these kinds of trips and expect to bring back commitments. The only way this will work is if we sustain the effort and go back,'' said Tim Parks, president of the Pittsburgh Regional Alliance, a business group that helped organize Murphy's trip to Tokyo.
But Robert Stern of the Los Angeles-based Council on Governmental Ethics Laws says taxpayers deserve tangible results from trips that some people consider junkets.
``If you can show us that you've brought business back, then OK, you've justified it,'' Stern said. ``But if you talk about goodwill, what's goodwill?''
And critics question the fairness of making the public pay so corporate executives can enjoy privileged access to elected officials.
``Here they save themselves a fortune,'' said Lance Haver, a Philadelphia-based Consumers Education and Protective Association. ``They get close access to the mayor or governor, they don't have to hire a lobbyist and they have a nice vacation at the same time.''
Mission veterans scoff at that idea.
``You work your tail off. You're in meetings from dawn to dusk, and you work very hard at communicating,'' said Dianne Sullivan of the National Association of Manufacturers.
Colby braved leprous beggars and bad water to hire an Indian sales representative. He returned home with a foul stomach, and three of the other members of the visiting delegation caught malaria.
``These trips,'' he said, ``they're pretty grueling.'' MEMO: Staff writer Mylene Mangalindan and the Associated Press
contributed to this report. ILLUSTRATION: Color photo
On Tuesday, Gov. George F. ALlen announced from Warsaw, Poland, a
joint venture between Virginia-based RADVA Corp., and Polish housing
manufacturer Ppuh Styrobud. by CNB