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Armenia trade office proposal drew fire from state's global trade community

SACRAMENTO – 10/18/07 – California Gov. Arnold Schwarzenegger has vetoed Senate Bill 515, a controversial piece of legislation that would have extended by two years the authorization for a privately-financed California state trade promotion office in Yerevan, Armenia.

The proposed extension was roundly opposed by the state’s international trade community, which argued that the office in Armenia provides no tangible benefit to the state’s economic growth and that no accountability mechanism exists to monitor the office’s operations.

“The unambiguous opposition of the international business community and especially organizations such as the California Council for International Trade and the Bay Area World Trade Center played a key role in helping persuade Governor Schwarzenegger's decision to veto [the legislation],” said Sacramento-based international trade consultant and columnist Jock O’Connell.

Among the other groups opposing SB 515 were the San Diego World Trade Center, the Bay Area World Trade Center, and the Northern California World Trade Center.
Opposition to the legislation was rooted in the residue of the elimination of the California Technology, Trade & Commerce Agency (TTCA) in 2003.

The state agency had drawn fire for years from the state's international trade community, withering under charges of poor professional performance and a lack of both leadership and accountability.

The wholesale elimination of the agency resulted in the shuttering of virtually all of the state’s trade-promotion efforts including the operations of the California Export Finance Office (CEFO) and the California Technology Investment Partnership, which funded start-up high tech companies.

The state’s entire network of 12 overseas trade offices – which included offices in Hong Kong, Tokyo, Mexico City, and London – was also scrapped.

The wholesale erasure of the agency effectively left California - one of the top 10 economies in the world - the only state in the US without any mechanism to foster or facilitate international trade and investment.

The California legislature, said one Sacramento insider at the time, "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.”

Members of the California global trade community "were genuinely looking for ways to reform the TTCA, but their patience was exhausted by the mismanagement there [within the Agency] itself,” he said.

The legislature, he added, "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.”

SB 515 was sponsored earlier this year by State Senator Jack Scott, a Democrat whose Southern California district includes a substantial percentage of ethnic Armenians.

One of the more compelling reasons to reject the bill, “is that passage of SB 515 could preempt current efforts to forge a rational state trade and investment strategy by supplying a powerful precedent for any legislator desiring to curry favor with a constituent group passionate about its ancestral homeland,” said O’Connell when the legislation was originally proposed.

Reacting to Schwarzenegger’s decision this week, O’Connell said, “a veto should not have been necessary had members of the legislature not felt obliged to place pandering to a political constituency ahead of adhering to a well-conceived international trade strategy.

By refusing to go along with such antics, the governor wisely refused to play politics with something as vital to the state's future as its links to the global economy,” he said.

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