February 5, 2014
Assemblymember Travis Allen
State Capitol 5126
Sacramento, CA 95814
Re: Assembly Bill 337 – Conditional Support
Dear Assemblymember Allen:
On behalf of both the Los Angeles County Economic Development Corporation (LAEDC), an organization dedicated to promoting job growth, economic expansion, and preserving the overall global competitiveness of Los Angeles County, and the LAEDC’s wholly-owned World Trade Center – Los Angeles (WTC-LA) subsidiary, L.A. County’s only World Trade Center dedicated to export assistance and foreign direct investment (FDI) attraction, we are writing to express our conditional support of Assembly Bill (AB) 337.
At the outset, the LAEDC and WTC-LA want to commend your leadership on this important issue. Certainly, a comprehensive state-led trade and investment strategy that is analytically-based and more thoughtfully aligned with California’s overarching economic development goals, objectives and strategies is something that has been long overdue. And, to this end, we believe that AB 337 provides some important, rationally-related supplementary guidance to the Governor’s Office of Business and Economic Development (GO-Biz), as it completes its legally-mandated international trade and investment strategy by the February 1, 2019 deadline.
However, we also believe the bill could be strengthened in a number of important ways to provide GO-Biz with even more flexibility, capacity and tools to build on California’s existing trade infrastructure; to take better advantage of California’s deep and distinctive ties to the fastest growing international markets in Asia and South America; to help publicize and ameliorate two of the greatest challenges to growing “free and fair” trade with California businesses – access to credit and intellectual property protection; and to more directly empower California’s economic regions and target their key traded industry clusters, which will provide the greatest “leveraging effects” in terms of new direct, indirect and induced jobs, output and tax revenues for the state.
As you know, AB 337 augments existing law[*] that requires GO-Biz to develop a strategy for international trade and investment by requiring the following, among other, requirements:
- The state strategy shall be based on current and emerging market conditions and the needs of investors, businesses, and workers.
- The state strategy shall evaluate current workforce, capital, marketing, infrastructure, research and development, and other needs of small and large firms (including airports, highways, rail, and ports).
- The state strategy shall, to the greatest extent possible, be based on existing studies and reports, where available.
While these are important, analytically-predicated requirements – ones which we believe will result in a more properly aligned strategy, and thus better outcomes, we offer the following recommendations to further enhance and improve AB 337, as well as the resultant trade and investment strategy’s impacts:
- Provide Greater Analytical Flexibility. While foundational analyses and (quantitative and qualitative) data are absolutely critical to the development of a well-thought-out international trade and investment strategy, we strongly urge you to reconsider the requirement that this analysis be “based on” existing studies. Instead, we recommend that GO-Biz be afforded more flexibility to increase the strategy’s timeliness, relevance and responsiveness, by requiring that GO-Biz “consult” these studies, while also allowing GO-Biz to conduct and/or commission its own original analytical research, where appropriate and helpful, to inform its strategic work.
- Require Additional Assessments. We believe two specific, but critically important, challenges must be identified and assessed in any legitimate California trade and investment strategy:
1) The deficiencies in the international legal regimes for protecting and enforcing copyrights and trademarks, including combating global online piracy, and options for mobilizing our state’s Congressional delegation on behalf of solutions; and
2) The effectiveness of existing export financing, especially credit, programs and whether there is a need for new tools, e.g., a California Export Finance Office, and/or additional credit guarantees to encourage financing for and increase the number of export-ready small- and medium-sized enterprises from the state’s key export-oriented industry clusters.
- Empower California’s Economic Regions. We believe that a viable California trade and investment strategy should serve to unleash the potential of California’s distinct economic regions – the key to the state’s success – by requiring GO-Biz to provide a strategy that recognizes, aligns with and empowers the state’s economic regions, encourages (incentivizes) them to develop and implement customized trade and investment strategies, and enables trade-related action focused on each region’s unique challenges and industry mixes – as defined by economic clusters and labor markets, not political boundaries. In short, GO-Biz’s strategy must leverage regional trade and investment efforts by incorporating export and FDI attraction strategies focused on key regional industry clusters into the larger California trade strategy being pursued by the state and other partners.
- Allocate Adequate Resources. Creating a statewide trade and investment strategy with appropriate stakeholder outreach and input, research and analytics, and implementation and accountability mechanisms is both time- and labor-intensive. We would encourage the state to allocate sufficient resources to GO-Biz, which already operates on a “shoe string” budget as the designated and primary purveyor of Economic Development policy and programs for the world’s 8th largest economy, to undertake such a considerable effort, ensuring that the strategy is truly an innovative, thoughtful and decisive document that can lead the state forward.
We hope that you will adequately consider the above recommendations to improve AB 337’s value and upshot. We look forward to working with you, Governor Brown and the other members of the California State Legislature to ensure that California’s trade and investment capacities, as well as other economic development programs, continue to be fully supported, thoughtfully structured and satisfactorily funded in a way that facilitates regional action to create jobs, strengthens California and its regional economies, and improves our state’s overall quality of life.
| Bill Allen
President & CEO
| Lessing Gold, Co-Chair – World Trade Committee
World Trade Center – Los Angeles
Partner, Mitchell Silberberg & Knupp LLP
| Steve Olson, Co-Chair – World Trade Committee
World Trade Center – Los Angeles
Partner, O’Melveny & Myers
[*] Section 13996.55 of the Government Code, relating to economic development