Legislature(1995 - 1996)
02/20/1996 05:10 PM House WTR
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON WORLD
TRADE AND STATE/FEDERAL RELATIONS
February 20, 1996
5:10 p.m.
MEMBERS PRESENT
Representative Ramona Barnes, Chairman
Representative Eldon Mulder
Representative Bill Williams
Representative Gary Lee Davis
Representative Gene Kubina
MEMBERS ABSENT
Representative Gail Phillips, Vice Chairman
Representative Mackie
COMMITTEE CALENDAR
Overview by the Commissioner of the Department of Commerce and
Economic Development.
WITNESS REGISTER
William L. Hensley, Commissioner
Department of Commerce
and Economic Development
P.O. Box 110800
Juneau, Alaska 99811-0800
Telephone: (907) 465-5442
POSITION STATEMENT: Overview presentation regarding the Department
of Commerce and Economic Development
Debbie Sedwick, Deputy Commissioner
Department of Commerce
and Economic Development
P.O. Box 110800
Juneau, Alaska 99811-0800
Telephone: (907) 465-5442
POSITION STATEMENT: Overview presentation regarding the Department
of Commerce and Economic Development
PREVIOUS ACTION
No previous action to record
ACTION NARRATIVE
TAPE 96-1, SIDE A
Number 000
CHAIRMAN RAMONA BARNES called the House Special Committee on World
Trade and State/Federal Relations to order at 5:10 p.m. Members
present at the call to order were Representatives Barnes Mulder,
Williams and Davis. Representative Kubina arrived at 5:19 p.m.
Members absent were Representatives Phillips and Mackie.
CHAIRMAN BARNES introduced Commissioner Hensley to give a brief
overview of what the Department of Commerce and Economic
Development is doing in the area of world trade, as well as, state
and federal relations.
Number 099
WILLIAM HENSLEY, Commissioner, Department of Commerce and Economic
Development stated that he was pleased Representative Barnes had
taken the Chairmanship of this committee and that she had taken an
interest in international trade. He felt that this was very
important and said that the department was happy to work with this
committee on trade issues.
COMMISSIONER HENSLEY noted that since he met with the committee a
year ago the department has met with hundreds of exporters and
importers. They've hosted and been hosted by high level government
officials from many countries. Personally, Commissioner Hensley
said he had discovered the importance of trade for high level
protocol. The department has organized visits by delegations from
Korea, Taiwan, the People's Republic of China, as well as, the
Canadian Ambassador to the United States. All of these visits had
assisted them in cementing further, the State of Alaska's ties with
their top trading partners.
COMMISSIONER HENSLEY said that after various meetings with the
countries as outlined, he came to the conclusion that Alaska in the
overall picture is a small fish in a giant pond. A great amount of
competitive activity is taking place in trade, which made it clear
to him that Alaska has to make the most of the resources that they
have in dealing with international trade and coordinating their
activities and focusing their efforts.
Number 347
COMMISSIONER HENSLEY also realized that Alaska in some areas does
not have the best reputation as it could have, as a place to do
business. Alaska needs to work on their image and their efforts in
the international arena, but Alaska does have it's strengths.
People around the world do recognize the magical aspects of the
state of Alaska, particularly in those countries where there are
millions of people packed into small spaces. The notion of Alaska
and it's pristine environment, it's space and mystic is a real plus
with Alaska's dealings abroad.
Number 417
COMMISSIONER HENSLEY stressed that under the leadership of Governor
Knowles the administration has made strenuous efforts to
communicate with Alaskan businesses. The administration has worked
to ensure that government does what's relevant to Alaska's efforts
to create jobs and to diversify the economy. The governor
introduced the notion of marketing Alaska in his "State of the
State" message last year, when he said that the State of Alaska was
open and ready for business. The department has tried to convey
this concept during this last year. The governor also named 125
individuals to serve on a "Marketing Alaska" effort that worked
extensively over the course of the summer and especially with those
individuals in fisheries and tourism. The idea was to try to
better position Alaska, by marketing Alaska's resources and
expertise in a global environment. The Marketing Alaska Report
contains literally dozens of recommendations to improve the
business climate in Alaska.
COMMISSIONER HENSLEY also noted that the Russia Agency Work Group
had been formed and a variety of different interests are working in
this arena. They have not had very good coordination thus far, but
as of this summer, they've initiated periodic meetings with all of
these groups to ensure that there is communication between them.
Commissioner Hensley also sat on the Sahkalin-Alaska working group,
which was named by the governor, to increase the trade and
communications between Alaska and this oil rich region. He noted
that this was a natural market place for the products and services
of Alaska.
Number 586
COMMISSIONER HENSLEY acknowledged that the governor has personally
advocated trade opportunities with a number foreign guests,
including President Lee, the governors of several far east regions,
such as Sahkalin and Chukotka. He also attended the Taiwan United
States of America/Republic of China (USA/ROC) conference in
Anchorage which was held there. He also met with the governor of
Hokkaido, Japan during the Sahkalin earthquake relief mission last
summer. He also met with the Yukon government leader to discuss
joint issues of tourism, trade, transportation and maintenance, as
well. The department also met with the Canadian Ambassador
regarding conflicts of seafood fisheries in Southeast Alaska and
also on other issues.
COMMISSIONER HENSLEY said that the Lieutenant Governor has met with
the South Korean president, as well as, the Chinese President to
discuss among other things, marketing Alaskan natural gas and North
Slope crude oil. The governor has appointed a group of Alaskans to
work with the Gore-Chernomyrdin Working Group. Commissioner
Hensley personally attended the meeting held in Seattle last year.
He is one of the appointees to the Ad Hoc working group. The
purpose behind this organization is to increase commerce between
the west coast United States and Russia, as well as the Russia Far
East. They expect to meet again in March in a planning group. The
U.S. Department of Commerce in Washington is finalizing the agenda.
Number 702
COMMISSIONER HENSLEY reminded the committee members that Alaska is
a participant in the Northern Forum, as well as, the Arctic
Council. The governor sent Commissioner Hensley to Hokkaido to
represent him at a meeting of the Northern Forum this past year,
where the Commissioner was able to communicate directly with a
variety of governors from different parts of the Arctic. During
this past year, the Commissioner has been exposed to trade at a
variety of different levels and he continues to recognize that
trade has been important in Alaska's past. Trade will be important
and critical in the future, consequently the department is working
on an agenda for the governor to travel to some of the state's key
trading areas. He noted that the Assistant Commissioner will go
into more detail about the specifics of what the department has
done, including the department's efforts to build a better focus on
tourism and trade, as well as economic development.
Number 761
REPRESENTATIVE ELDON MULDER thanked the Commissioner for his
presentation and said he appreciated the Commissioner's efforts in
expanding marketing opportunities for Alaska. He agreed that
efforts the department can take to add additional revenues for the
state will help plug the budget gap, as well as, increasing
revenues from taxes or any other opportunities. He thought that
these efforts were along the lines consistent with where the state
is trying to go.
REPRESENTATIVE MULDER referred to the Natural Gas Pipeline. He
then asked the Commissioner what the administration's position is
on this project and what objectives the department has taken thus
far. What is the administration's position with working with the
Natural Gas Pipeline producers and what will they propose to the
legislature as a course of action.
Number 830
COMMISSIONER HENSLEY stated that firstly, he was very keen about
learning more in relation to the production of natural gas. When
they first met with the producers last year, it was an educational
experience. It was hard for him to believe that after all these
many years of producing oil, Alaska and the producers had never
been able to sit down and talk business about the future. He noted
that former Governor Hickel's efforts to finalize some of the
outstanding legal suits with the oil companies and the competitive
nature of other vast, spaces being opened up for exploration had
furthered these discussions along.
COMMISSIONER HENSLEY said that when they met with Exxon, Arco and
BP, the department queried them about the natural gas. Knowing
that these are very large companies that have interests throughout
the globe, the department was keen on finding out what their
opinions were about the Natural Gas Pipeline. All of them
recognize that gas is a major resource, especially Exxon who said
that in North America gas was their largest resource. Through the
Oil and Gas Policy Council and exploring a variety of other issues,
the department has not gotten into Liquid Natural Gas (LNG)
specifically at this point, although he mentioned a briefing by the
oil companies regarding what they had learned to date about the
design and engineering, the credit sources and the market as of two
months ago, prior to their travel to the other potential market
areas.
COMMISSIONER HENSLEY added that during Governor Hammond's term in
office, he served on a panel lead by former Governor Hickel which
looked at the Natural Gas market. He felt as though this was one
of those projects which was so large and complicated it almost
seemed like the stars had to be lined up for it to become a
competitive reality. The governor has tasked a sub-group of the
cabinet to look at about a dozen to 14 different issues which they
need to discuss regarding the LNG project. It is such a hugh
investment, from the production end, to transportation and to the
consumer end. The department is looking at a wide range of issues
that they need to resolve in their own minds. He feels that the
private sector has to be a driver in this project. They need to
see the return in this. Alaska's role is to try and facilitate
every way that they can, not only in-state, but as well as working
with Washington, D.C. They will need the support of the National
Administration in order to compete with other parts of the world,
which has an abundance of gas.
Number 1102
REPRESENTATIVE MULDER said he applauded the administration's
efforts, but for what it's worth, he felt it would behoove the
administration to include a majority and minority member from both
the House and Senate in these discussions. As the trustees of
Alaska, the legislature is also charged with making certain that
Alaskans get the best return for their investment of resources.
The legislature and the administration need to walk hand in glove,
not as partisans, but as a unified front. If together they can
come up with a concrete policy, this would mean additional revenue
and additional jobs for all Alaskans.
COMMISSIONER HENSLEY said the gas pipeline would be a world class
investment and after traveling through Asia he felt as though Asia
needs this type of pollution-free energy. The administration is
definitely supportive of the project and they are working at
discovering for themselves, answers to key questions.
Number 1185
CHAIRMAN BARNES believed that on the point of natural gas, that
there was a window of opportunity for Alaska. She felt as though
they were nearing a point where this window will close. There are
other large pockets of gas in the world which will come on line.
If Alaska isn't out front to force this pipeline or whatever it
takes to get this gas to market, or to develop a strategy to make
it economically feasible, then Alaska will miss the boat.
CHAIRMAN BARNES said she spoke to Exxon about going a different
route into Western Alaska, out of Kivalina. She thought that this
would be great, but there are no existing permits for this route.
They could use the Northern Sea Route, in order to carry this gas
to market, but she was afraid if they went back into the permitting
process for a different route that this would delay again Alaska
entering a world market. Alaska is behind the "eight ball" as it
stands now.
CHAIRMAN BARNES also has met on three occasions this year with both
the Chairman of the Board and the President of China Petroleum.
The last time she was in China, they even encouraged Alaska to
become a participant in the line. She told them, she didn't know
if Alaskans wanted to become a participant, but said there were
other ways for them to break into this market.
COMMISSIONER HENSLEY said he knew this alternate route was being
looked at, but he didn't know if it was primarily done so with the
notion of looking at a design and an alternate which would make it
more economically feasible. He understood what Chairman Barnes
said about the problems which permitting might create. In earlier
days, things were done for national defense reasons. Alaska is the
only Arctic region the United State has. The idea of the Arctic
port has some benefits for the nation, as well as, Alaska, for the
purpose of shipping coal, LNG or zinc. He knows that the producers
have also looked at this alternative from the perspective of Arctic
shipping and even in light of the ice conditions they think it's
feasible, but he understood Chairman Barnes concern.
Number 1386
CHAIRMAN BARNES again stressed that her only concern with this
particular project was that she feels there is a window for Alaska
to enter the world market. Unless the state is able to get an
expedited review of permits, she felt as though it would take
forever for the state to get into position to build an Arctic port.
Tetalina has been studied as a deep water port, which is part of
the latest report done by the Corp of Engineers. The Corp studied
three ports, Tetalina, Haines and Unalaska. She thought that these
ports should be developed, but she didn't necessarily want to see
them tied to the gas which needs to get to market. If they could
build a port at Tetalina, what it would do for zinc and coal would
be tremendous.
Number 1449
REPRESENTATIVE GENE KUBINA said the more he listens to this debate
and after having read about other markets around the world, he
fears that two to three years from now, this major project, whether
in India, Qatar, or some place else, will be in motion at a cost
higher than what Alaska's project will be. He said he's not sure
everything possible is being done to determine just how competitive
the Alaskan project really is. He noted that the players in the
Alaska project have interests in other countries as well and that
a conflict of interest might exist. He asked what Alaska should do
to protect it's interests. He added that this project is a safe
bank account for 20 to 40 years and wondered if it would be better
to develop these projects in other countries and leave the Alaska
reserves for next generations.
COMMISSIONER HENSLEY felt as though he understood what
Representative Kubina was saying. He pointed out that often times
he is personally uncertain about what the real situation is. These
companies do have substantial interests throughout the globe and of
course they are looking out for their own interests. He felt that
Alaska needs to have their own plan and he felt as though the
governor is beginning to focus on the right questions. He noted
that the administration has constant interactions with industry.
He said it's hard to determine at what point to begin the real
push. These other countries do have the benefit of controlling
their own governments and their own resources, which makes
attractive investments in their own country. Alaska is not quite
as flexible. Alaska would need a boost from the federal government
in helping to be competitive. He added that they would certainly
work with the legislature to accomplish this.
Number 1636
REPRESENTATIVE KUBINA noted a section of the meeting notes with
China Petroleum Company where the president of this company said
he's waiting patiently for this line to be constructed. China
appears to be involved in exploring and willing to invest in
Alaska. He thought these meeting notes would be good reading for
the Commissioner.
COMMISSIONER HENSLEY said that he did meet with this same gentleman
on their trip since it was shortly after President Lei's visit to
Alaska. They literally threw the doors open. This type of
investment would certainly help make the project more feasible. He
noted that an investment such as this would be a great asset.
CHAIRMAN BARNES said the Chinese have committed to buy 25 percent
of Alaska's gas, just as when she first went over there. She noted
to the Commissioner that this committee would not exist if they did
not have a lot of concern about what's going on as it relates to
world trade and Alaska's competitiveness in the area of world
trade. The committee needs to be kept informed. They should not
have to fight to be a part of whatever is going on in Alaska. She
should not have to call up and demand agendas and this type of
thing. The legislature should automatically be made part of
meetings or to participate in any trips. She used the USA/ROC
conference as an example of this lack of legislative involvement.
COMMISSIONER HENSLEY said he agreed that communication is important
and he said that his office is open to her for any information
which she might need.
CHAIRMAN BARNES said specifically, in regards to the Chernobyl
project, that it's important that Alaska not continue to loose to
Seattle. Alaska continues to loose over and over, in any venue,
Seattle manages to beat Alaska. This has got to stop. The
emphasis in on a global economy and Alaska has to be a player.
Alaska cannot be a player unless the legislative body is not
involved in the process. The department can't do it by themselves
because first of all they won't have the money. People are not
going to give them money for things that they don't understand.
COMMISSIONER HENSLEY said he got her message and clearly the
department is trying to do more with less. The budget for trade
activities has been substantially reduced over the years. He felt
as though their efforts needed to be cooperative.
Number 1889
REPRESENTATIVE MULDER stressed his message about the department and
the legislature moving hand in hand. He noted that the members of
the legislature have established a repertoire with different
entities and could be a good resource to the department. He also
stressed the task force appointed by the governor dealing with the
gas pipeline. This pipeline issue is very important to the state.
If they can come to a consensus before hand, this would make sense.
There's plenty of credit to go around on the work that's already
been done. What matters is a good return for their constituents
and for the generations yet to come.
Number 1990
DEBBIE SEDWICK, Deputy Commissioner, Department of Commerce
and Economic Development was next to testify. She pointed out that
trade plays a crucial role in Alaska. Each year Alaska exports
more than $2 billion of goods and products to the world, everything
from resources such as timber and zinc to value added products,
such as salmon ham and cold weather technology. This doesn't even
take into account the export of services such as telecommunications
or environmental services or the approximately $2.5 million which
goes through Alaska's airports every year.
MS. SEDWICK noted that in Alaska there is British money in oil,
Korean money in coal, Canadian money in mining, Japanese money in
fish, etc. The impact of this trade is far-reaching. It provides
good paying jobs and growth statewide. Based on a U.S. Department
of Commerce survey, Alaska's exports create about 50,000 jobs a
year in Alaska, but as Chairman Barnes pointed out, Alaska is very
vulnerable and the department recognizes this. She noted that
Alaska is anything but secure in all of these areas because
competition is very intense.
MS. SEDWICK stated that Alaska faces smart, well financed
competitors who are happy to grab Alaska's market share. Today
there are 56 American offices and 105 foreign offices in Japan,
ready to take what Alaska is sending to these countries. The state
of Alaska must work well and together to better position themselves
in order to succeed abroad.
Number 2092
MS. SEDWICK outlined for the committee the direction which the
department is taking. The department has created out of the former
divisions of Trade and Economic Development, the division of Trade
and Development (DTD). They hope to save money by doing so and
this enables them to put their specialists together with their
marketing people. The people in the department have been working
closely together, but the coordination from the top had been
lacking. By bringing these entities together, saving money will
help and having this money for programs will help as opposed to
fixed costs.
MS. SEDWICK stated that as a newly emerged division, their mission
is to increase and enhance the demand for Alaska's products and
services, to ensure a supportive business climate and to stimulate
economic growth statewide. They also will strive to increase
private sector employment and economic opportunities for Alaskans.
Most immediately, they have been working on the "Marketing Alaska"
initiatives which will provide a blueprint for the state as a
better place to do business. They will continue to focus on this
in the months ahead.
MS. SEDWICK added that in the trade arena, the department works to
build trade in a number of ways, finding buyers for Alaskan
sellers, getting up to date market information for Alaskans and
building the state's relationship with key trading partners. She
noted some of the following examples: DTD lead a seafood trade
mission to and from Taiwan over the past year, bringing buyers and
sellers together which resulted in a 340 percent increase of
purchased fish, mostly from Alaskans, which will take salmon
exports to about the $4 million mark this year. Entech, Inc.,
which is a subsidiary of Arctic Slope Regional Corporation, worked
with the department of Trade and Development to find markets for
it's incinerator technology, as a result of the efforts of the
department they were able to locate an opportunity in Malaysia.
DTD helped them find the federal funds in order to send a trade
mission over. They are currently conducting test burns in
Malaysia.
MS. SEDWICK went on to note that the Alaska-Sahkalin working group,
which the Commissioner spoke about, was organized by DTD and staffs
the Alaska Sahkalin Working Group which is the public partner
initiative that seeks to build business ties for Alaskans on
Sahkalin Island. She stressed that securing jobs in the oil fields
service industries are the target here. DTD spearheaded the
state's strategic protocol efforts providing links with Alaska's
most important trading partners. As the Commissioner spoke about,
the department had participated in visits by Taiwanese President
Lee, Korea President Kim, Canadian Ambassador Chretien and also
officials from Indonesia, Japan, Russia and elsewhere this year.
They also lead the state's earthquake relief efforts to Sahkalin
Island, as well as the September 1995 Northern Forum Conference.
MS. SEDWICK said that the department's work is always going to be
sector driven. When the state does trade shows, they would like
companies to be with them. This will help to ensure that when they
host delegations from abroad, private industry is always at the
table. When Sahkalin Governor Farkhutdinov came to visit last
September the staff raised nearly $11,000 from private industry to
underwrite the cost tied to this visit. This type of
private/public partnership is essential to how the department works
and it will remain important to them. They must ensure their
efforts are tethered to industry's needs.
MS. SEDWICK stated that in regards to Alaska's overseas presence
they are maintaining offices in Japan and Korean, as well as
maintaining their contractor in Taiwan. There are good reasons for
this structure. Asia is by far and away Alaska's most important
customer. Japan alone counts for roughly two thirds of all of
Alaska's exports and in the first nine months of 1995, Japan
imported more than $1.6 billion worth of Alaskan products. Korea
imported roughly $164 million and Taiwan imported roughly $60
million. All of these figures are up from 1994.
MS. SEDWICK noted that the Korea and Japan offices serve four main
roles: access, intelligence, visibility and advocacy. Overseas
staff makes contacts on Alaska's behalf, provides access for
Alaskans seeking buyers and investments from abroad, they arrange
meetings for dozens of missions and they identify specific trade
opportunities which are publicized by the Anchorage office. A
specific example of this was in the Korean office. Katchemack
Seafoods of Homer and Dutch Harbor, Owner, Bill Sullivan let the
department know that he was looking for buyers for fresh cod.
Today, he employs four to five people year round and ships
approximately $800,000 a year of fresh cod to Korea. As far as
providing intelligence which is very important to sellers, trends
and forecasts, alert what's going on which can immediately aid to
people in Alaska. An example of this would be Sea Alaska
Corporation which has limestone deposits in southeast. They used
the Japan office to research the potential for their exports, they
undertook a feasibility study and are now sending commercial
samples to potential Japanese importers.
MS. SEDWICK said that the department provides visibility, helping
Alaskans to battle fierce global competition. They participate in
trade shows and meet regularly with key government officials. They
worked on the trade delegation which Mayor Rick Mystrom hosted last
fall, providing services to this forum and also to the Anchorage
Economic Development Corporation. As far as advocacy, the
department handles unfair trade practices and resolves trade
disputes. In Taiwan, Ida Yao, Alaska's new contractor will focus
on seafood and tourism, two areas which the department feels has
great promise. This contractor will also focus on trade missions
to Alaska and to Taiwan.
MS. SEDWICK noted that this structure has and will continue to
produce important results, creating opportunities for our Alaska
exporters and a strong base for Alaska's economy. In round table
discussions, the department knows there are challenges. They've
talked with exporters and met with community leaders and through
the legislature's own recently completed trade survey, they know
there are challenges. They need to better coordinate the trade
assistance services that are offered now by a variety of different
agencies. They need to work more efficiently, since funding levels
continue to fall. In the past years, international trades funding
has fallen 40 percent and the department took another 10 percent
cut this year to meet the governor's spending plan.
MS. SEDWICK stressed that they need to protect Alaska's position in
key markets like Japan and Korea, while still finding resources to
help exporters branch into new areas. They need to sharpen their
efforts and be more proactive. They need to make sure that all
their actions are of value to Alaska's business community so they
can better measure their outcomes and results.
MS. SEDWICK outlined the department's future efforts. The division
working directly with Commissioner Hensley established the Russian
Agency Working Group, which develops ties with the Russia Far East.
They are looking at all ways of saving money, simple steps such as
using E-mail instead of faxes, which has saved them about $14,000
this year. In her opinion everything is something that needs to
be looked at.
MS. SEDWICK stated that overseas after they made the decision to
merge trade and tourism staffs in Tokyo, they are closing down the
office that trade and tourism occupies. They have found new, less
expensive space. They expect this will save them $40,000 this
year. They are also looking in Korea to share office space with
Anchorage Visitor Convention Bureau (AVCB) and some of the private
sector people. They hope by the end of this fiscal year they will
be able to say they found an opportunity there to leverage private
sector dollars and save some money.
TAPE 96-1, SIDE B
Number 011
MS. SEDWICK said the department is expanding into emerging markets,
taking steps to ensure that Alaskans find new markets for their
goods and services. They are broadening their efforts in Taiwan to
increase support for their Taiwan contractor next year to promote
seafood, tourism and technical services. They are promoting
technical services exports, oil and gas services, environmental
services and telecommunications to find new markets in Asia. They
will place particular emphasis on Korea, the Russian Far East and
the other growing Asia markets, strengthening their government
ties, for instance, the Alaska Sahkalin Working Group and the Gore-
Chernomyrdin Ad-hoc Working Group. Through strategic protocol
efforts they will continue to work on government to government
ties, because they feel as though a more stable business
environment for their traders is one of the most important things
they can do in this area. She also noted building new seafood
markets, possibly through trade missions to China and Singapore.
Their challenge is great, they must maintain their position in
existing markets, but help their companies find new buyers else
where. They must reduce their spending and increase their
efficiency, they must ensure that their work is valued by the
private sector. There are many committed, qualified people working
to build Alaska's markets overseas. She has spent a good deal of
time since September meeting with these people, learning about
their efforts and assimilating their recommendations into work
plans for the coming year.
Number 040
MS. SEDWICK responded to a question by Representative Davis
regarding the limestone market in Southeast. She said they were
looking at the raw materials with an eye to a value added
commodity. She saw this as an opportunity to explore as much as
they can.
Number 072
CHAIRMAN BARNES noted that on two separate occasions she had asked
for a breakdown on the money spent in Taiwan.
MS. SEDWICK said she had this information and would deliver it
first thing in the morning.
CHAIRMAN BARNES stated that she felt Alaska's emphasis should be
more broad and should go further than just Japan and Korea.
Number 140
REPRESENTATIVE GARY DAVIS asked about the job opportunities related
to the Sahkalin Island project. He understood that even in the
natural gas area, he thought that this was a great find, but the
extent of it hadn't been delineated yet. He understood the reserve
was tremendous and he noted Alaska's experience with cold weather
technology. He also mentioned the oil company executives from
Alaska, such as Marathon, etc., which are also active over there,
but he pointed out that there is a lot of unemployment there now.
This export technology would be more technical though. He thought
this would really fill her plate, if the department chose to pursue
all of these avenues.
MS. SEDWICK noted that Alaska has a lot of talented people residing
in their state. Last year when Arco had their big lay off, there
were a lot of people who wanted to stay in Alaska. If they could
find opportunities for these people of expertise, they would stay.
When she traveled to Taiwan, she was overwhelmed to see that there
was a real need for Alaska's services. She added that sector
people need to be in place to market these skills as well.
Number 239
CHAIRMAN BARNES noted for everyone's information that Taiwan is
exactly the size of the Kenai Peninsula with 23 million people
living there. They have one of the most robust economies in the
world. They are fourteenth in the world economies and it's a
company which offers tremendous potential to Alaska.
REPRESENTATIVE DAVIS stated that it appears that the department's
approach seems to fit his philosophy, that people need to come to
the department with ideas, then the department can pursue markets
and make contacts. They don't need government telling people what
they need, rather they need people coming to government asking for
assistance.
MS. SEDWICK referred to the "Marketing Alaska" effort, which would
be presented next week. It addresses this concept of private
sector driven initiatives and a lot of the ideas came from the
private sector.
Number 316
CHAIRMAN BARNES thought it might be important for this committee to
know that the Anchorage Economic Development Authority and their
new director is very actively working to put together Alaska's cold
weather expertise. She thought they were doing a very fine job.
She then went over the materials in everybody's packets.
CHAIRMAN BARNES made reference to the letter from Representative
Elton, which was sent to the Speaker and Chairman Barnes regarding
a meeting at his house about the foreign trade liaisons from the
Alaska Seafood Marketing Institute. She then referred to materials
regarding a trade mission to Russia, a trade mission to China, and
the agenda regarding her recent trip to Taiwan. These materials
she went into more detail about, since it wasn't in report form.
CHAIRMAN BARNES was the guest of the Pan-Pacific Professional
Management Conference in Taiwan and was the key-note speaker there.
She spoke right after President Lee opened the conference and the
agenda included the ten days which they spent there, as well as,
three days they spent in Kaohsiung. She noted that at the back of
their packets the attendees should find a newspaper article where
she met with the mayor of Kaohsiung. At each of these meetings
there was quite a large delegation of businesses.
CHAIRMAN BARNES then addressed the return visits scheduled to
Alaska. Mr. John Kao is one of the guests scheduled to attend. He
heads the Tuntex Group, one of the largest firms in the world for
a country of that size, and does $7 billion worth of business a
year. They are very interested in doing business in Alaska,
particularly in the market of hotel construction. Chairman Barnes
noted that when the base was closed at Shublik Bay in the
Philippines, this company invested $200 million to develop an
industrial center, but there was a problem with the local
government. They just walked away from this $200 million project
until these problems can be worked out. They're big enough that
they can walk away from this large investment. Mr. Kao will be
visiting from March 1 - 5, primarily to find out what it's like
here in the winter time. If the Ship Creek Redevelopment project
fell through, he's willing to build the whole project. It wouldn't
be a small hotel, because they don't build anything smaller than
600-room facilities. He will be Chairman Barnes's guest and she
took the opportunity to invite anyone who will be in Anchorage area
during this time to attend their scheduled meetings.
Number 478
CHAIRMAN BARNES then referred to the trip to Russia. This group
were guests of the Krasnogorsk people. A return trip to Alaska has
been in the planning stages since September of 1995, but
unfortunately the mayor of Krasnogorsk, Roman Popkovich, is a
retired Major General from the Soviet Army and was also a member of
their parliament and Chernomyrdin would not let he and his
delegation leave. Chairman Barnes encouraged everyone to attend
these meetings, especially during the visit of John Kao since he is
very interested in investing in Anchorage. Chairman Barnes also
said that ties with Russia are very important, not just with the
Russia Far East, since this has been a mistake made in the past.
Russia has a centralized government and unless this government says
things are going to happen, they don't, not even today. The
committee's emphasis has been on this central government and
they've met with their equivalent of the United State's National
Oceanic and Atmospheric Administration (NOAA), in regards to the
Northern Sea Route. She also noted that Representative Davis went
to Japan for a Northern Sea Route meeting there.
Number 596
CHAIRMAN BARNES noted that she wanted everyone to have these
packets outlining all the things the committee has done and the
people who have accompanied them during these trips. The return
visits are paid for and taken care of. She said that if anyone
wonders where she got the money to do all of this, she was the
guest of the Taiwanese when she went to Taiwan, the guest of
Mainland China when she went there, and she was the guest of Russia
when she went there. Hence, these people will be her guests when
they come here. There were legislators and business people who
were very involved in these delegations.
ADJOURNMENT
CHAIRMAN BARNES adjourned the House Special Committee on World
Trade and State/Federal Relations meeting at 6:15 p.m.
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