California to Shutter Trade Agency
Poor management and lack of organization at the California Technology, Trade & Commerce Agency account for the decision
SACRAMENTO - The beleaguered California Technology, Trade & Commerce Agency is no more.
The Agency, which over the past several years has drawn fire for its poor performance and lack of leadership from the state's international trade community, has been disbanded as a harried state legislature saw fit to write it?out of the state budget just recently signed by an equally-harried Governor Gray Davis.
"The reasons orbit around the strong feeling in the Assembly and the Senate that the Agency was too far gone in terms of effectiveness to warrant any support," said one legislative staffer close to the Assembly Budget Committee that drafted the legislation.
"Some people were genuinely looking for ways to reform the CTTCA, but their patience was exhausted by the mismanagement there [within the Agency]," he said. "But the budget crisis and the possibility of the Governor being recalled are?driving everything that is going on up here right now."
Eliminated are the state's 12 overseas trade offices; the California Export Finance Office (CEFO); and the California Technology Investment Partnership, which funds start-up high tech companies.
Several of the Agency's other programs - the Small Business Loan Guarantee Program; the California Tourism Marketing Office; the Manufacturing Technology Program; and the Infrastructure and Economic Development Bank - will be transferred to the state's Business, Transportation & Housing Agency. Also saved from the axe was the California Film Commission.
In addition, the office tasked with the reuse of the numerous former military bases across the state will be shifted to the state's Department of Housing and Community Development.
According to the Assembly bill calling for abolition of the Agency - AB 1757 - the Agency will have enough money over the next six months to wind-up its operations both within California and overseas.
The closure of the CTTCA effectively leaves California, the sixth largest economy in the world, without any overseas business representation.
"The Agency was in serious need of reforming," said Joe Harrison president of the San Francisco-based California Council for International Trade.
"Shutting down the Agency and closing down the overseas offices piecemeal shows a tremendous lack of understanding on the part of the legislature as to the role that international trade plays in California's economy."
According to Harrison, the amount of money spent to keep the overseas offices open "is a relative trifle compared to the business they could generate if they were properly lead and supported."
The legislature, he said, isn't going to understand the mistake they've made "until there's a hew-and-cry in the trade community that hold's them responsible for the overall attitude toward business that permeates Sacramento."
Harrison's comments were echoed by Carlos Valderamma, director of Latin American operations for the law firm of Carlsmith Ball, LLP in Los Angeles.
"This is a huge mistake," says Valderamma, past Chairman of the Foreign Trade association of Southern California. "They [the state Assembly and Senate] are only looking?at the short-term, while this decision has extremely negative long-term implications."
The state of the Agency, he said, only reflects "the non-committal approach that the legislature has taken toward promoting international trade as a driving force in the state's economy."
"This move puts the ball squarely in the court of trade organizations, chambers of commerce, and economic development agencies across the state to take the initiative to create effective relationships to take a proactive approach to help keep California companies globally competitive," he said.
According to one Sacramento legislative insider, "There's a lot of blame to go around here."
The legislature "failed to understand the importance of the Agency and hold it accountable, while the Agency itself was poorly managed with activities that were driven more by politics than by the needs and expectations of the business community," he said.
However, he said, the bulk of the blame "should be laid at the feet of Governor Gray Davis, who packed the Agency with political appointees and inexperienced people with virtually no business experience or acumen."
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