Session Date: August 16, 2005
Annual Meeting Session Summary: International Trade Summit
By John Sattgast
Senior Information Officer, Washington House of Representatives
This summary is provided for information purposes only. NCSL does not endorse any views it contains.
SEATTLE - As the global economy has evolved during the last 25 years, states and provinces are recognizing they need to assert their roles in the international marketplace or be left behind, say trade leaders who spoke Tuesday at the National Conference of State Legislatures' International Trade Summit. More than 180 people represented countries throughout the world at the summit, which was part of NCSL's 2005 "Strong States, Strong Nation" Annual Meeting.
"It's a fairly recent phenomenon in the global trade system that states and provinces need to pay attention to the rules of the game," said Peter Riggs, director of the Forum on Democracy and Trade in New York. "States would like to have a seat at the table for negotiations to ensure that their interests are represented."
William Stafford, president of the Trade Development Alliance of Greater Seattle, echoed this sentiment. "Today, with the world competition, the changing nature of this country, and the world in terms of economics, this (international trade) has to be a part of everybody's agenda," he said.
This means different things in different places, Stafford noted. The role of government in the economy is varies in each country, with federal governments in some countries allowing states and provinces to engage without interference in free trade, while others have little or no power to individually reach out to the international community.
For example, although states in Australia are economic powerhouses, they have very little say in how their individual economies are administered, said John Aquilina, of New South Wales, Australia. He said that can be very frustrating.
"In terms of trade, there is very little that we as individual states can do from a legislative stance. In fact, if anything, our involvement has tended to diminish as the years have gone by, with the federal government becoming more centralist in its power," Aquilina said.
Xi Yifang of the Sichuan Province in China held up his country's new open trade policies as an example of success.
"Twenty years ago, we were backward in economic development. When we put forth the initiative of opening to the outside world, the Chinese people found themselves in front of an unprecedented challenge. The opening policy has brought benefit to the Chinese people," said Yifang. "According to conservative estimates, by 2010, China will import and export with North America and Europe (trade) worth $400 billion U.S. dollars.
Speaker Ken Kowalski of Alberta echoed the benefits and importance of free international trade without federal government interference. "Alberta has always been a trading province. It believes totally in free trade. It has no restrictions," said Kowalski, whose province has the second largest oil reserve in the world.
The Alberta representative said that in Canada, provinces set the policies for trade, not Ottowa.
"We don't want any barriers. We want unlimited borders. We want free trade. We don't want Ottawa to interfere," he added.
Senator Jerry Grafstein, who serves in Parliament in Ottawa, Canada, added that trade, especially between Canada and the United States, is a vital part of the Canadian economy. He noted that $2.1 billion in trade is conducted each day between the two countries.
"The largest business in the world is the two-way trade between Canada and the United States. It is now close to three quarters of a trillion dollars every year. This now outstrips practically every nation in the world. Close to 50 percent of every job in Canada is based on trade. All Canadians understand that trade is really the oxygen for living," said Grafstein. "The best way to proceed with trade is by fair trade rules."
Grafstein said, however, that free trade is being jeopardized by a continual increase of agricultural subsidies by competing countries, including the United States. He noted that when one country increases farm subsidies, it forces others to also increase theirs, and some countries cannot compete.
"If we want to proceed to increase our standard of living for all of citizens, we must aggressively reduce those agricultural barriers. They are a barrier to free trade and prosperity," said Grafstein. "Get rid of or reduce farm subsidies."
"Subsidies are hurting the agricultural industry," added Kowalski. "We can compete with anyone in the industry. We don't want to because we think it's a stupid investment. Most other countries cannot afford to subsidize. We don't agree with subsidies. They have to be eliminated completely and the world will get by very well."
Ebenezer Sekyi Hughes, of Ghana, said larger countries, such as the United States, need to be sensitive in dealing with poorer countries which have a more difficult time competing in the world marketplace. He noted that the poultry business is an important part of Ghana's economy. Yet Ghana's chicken farmers cannot compete with U.S. poultry imports. Still, Sekyi Hughes said free trade is important to his country.
"Ghana believes in democracy. Ghana believes in international free trade because it is the key to international prosperity," Sekyi Hughes said.
NCSL President John Hurson, a delegate from Maryland, said states that want to be successful in international trade are recognizing the importance of re-examining their roles in the world marketplace.
"U.S. legislatures have long been involved in international trade, recognizing the economic development benefits that trade brings to states. In the past 25 years, however, international trade agreements have stopped focusing exclusively on tariff-lowering initiatives and have begun to focus on non-tariff barriers to trade -- namely regulations and policies," said Hurson.
Washington State Senator Paull Shinn pointed out that trade policies are formulated by the national government. "We need more communication between the federal level and the states surrounding trade problems at the international level," Shinn said.
Shinn noted that Washington is one of the most trade dependent states in the nation. Washington also has been a leader in exports, from Boeing airplanes, Microsoft products, to Starbucks restaurants in locations throughout the world, said Shinn.
"One out of every three jobs in our state comes from trade," he said. "We are looking for markets in Africa and other parts of the world, not just in Asia. We have to get to know each other and become friends."
Shinn said he too is concerned about subsidies and tariffs.
"Someday, in a utopian society, we should have a tariff-free society around the world," said Shinn. "Trade is a global issue. In the 21st century, we are looking for the best ideas that will promote free trade."
NCSL is the bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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