Legislature(1995 - 1996)
03/20/1996 04:08 PM Senate TRD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT TASK FORCE ON INTERNATIONAL TRADE
March 20, 1996
4:08 p.m.
MEMBERS PRESENT
Senator Steve Rieger, Co-Chair
Representative Beverly Masek, Co-Chair
MEMBERS ABSENT
Representative Alan Austerman
Representative Irene Nicholia
Representative Brian Porter
Representative Caren Robinson
Representative Jeannette James
Representative Pete Kott
TASK FORCE AGENDA
Work session on draft resolution
WITNESS REGISTER
GREG WOLF
Anchorage Economic Development
Corporation
550 West 7th Avenue
Anchorage, Alaska
Telephone: (907) 258-3700
POSITION STATEMENT: Testified regarding the draft resolution.
CHUCK WEBBER, Chairman
District Export Council
Address and telephone number
were not provided
POSITION STATEMENT: Testified regarding the draft resolution.
MARK WILSON
District Export Council
1400 West Benson, Number 150
Anchorage, Alaska 99503
Telephone number was not provided
POSITION STATEMENT: Testified regarding the draft resolution.
BILL NOWELL
District Export Council
Address and telephone number
were not provided
POSITION STATEMENT: Testified regarding the draft resolution.
DEBBY SEDWICK, Assistant to the Commissioner
Division of Trade and Development
Department of Commerce and Economic Development
3601 "C" Street, Suite 700
Anchorage, Alaska 99503
Telephone: (907) 269-8110
POSITION STATEMENT: Testified regarding the draft resolution.
WENDY REDMAN, Vice President
Statewide University System
University of Alaska
P.O. Box 155000
Fairbanks, Alaska 99775
Telephone: (907) 474-7311
POSITION STATEMENT: Testified regarding the draft resolution.
CHUCK ZAGER
U.S. Department of Commerce
Address and telephone number
were not provided
POSITION STATEMENT: Testified regarding the draft resolution.
ACTION NARRATIVE
TAPE 96-5, SIDE A
Number 001
CO-CHAIR SENATOR STEVE RIEGER called the Joint Task Force on
International Trade to order at 4:09 p.m. Members present at the
call to order were Senator Rieger and Representative Masek.
Senator Rieger noted the meeting would be teleconferenced to the
Anchorage LIO.
CO-CHAIR RIEGER indicated there was an additional document that has
been circulated. He explained the Export Council drafted their own
document which is titled, "Draft Resolution for Senate/House
Interim Task Force on International Trade." He said it would be
his hope to conclude the work of the Joint Task Force on
International Trade and take testimony from anyone who wishes to
give further testimony. Co-Chair Rieger said he would like to mark
up the resolution that was introduced as a draft at the previous
hearing with whatever changes people feel are appropriate.
Number 040
GREG WOLF, Anchorage Economic Development Corporation, testified
via teleconference in support of the valuable role played by the
mission of trade and development, in general, and particularly the
services provided by the division's overseas offices in Japan and
Korea. He said Alaska is a prime supplier of many resources or
could be in the near future if we aggressively pursue
opportunities. Mr. Wolf noted Alaska has competition in these
markets and it is important to be as proactive as possible in
marketing our exports. He explained the importance of having a
physical presence in other countries of staff that are
knowledgeable about Alaska. Any attempt to scale back the offices
would be detrimental to the state's interest. It would be a
serious mistake for Alaska to retreat from these markets,
especially at a time when the opportunities are so great. It would
send the wrong message to our trading partners. He urged support
of the maintenance of these offices.
Number 105
CO-CHAIR RIEGER asked Mr. Wolf to elaborate on what he thinks is
representative of who the users are of either the Japan or Korea
office.
MR. WOLF referred to the Alaska side and said the users are Alaskan
companies seeking to export their products, services or may be
looking for a supplier. From the Japan or Korea side, there are
Japanese or Korean companies looking to import Alaskan products,
resources or services. They play a role in assisting with
government efforts in those countries.
Number 128
CO-CHAIR RIEGER asked if it would make sense that some of the users
Mr. Wolf described contribute some user support to the financial
cost of maintaining the offices.
MR. WOLF indicated it is possible, but it isn't common. Mr. Wolf
said he is familiar with the operations of many of the offices in
Japan and he isn't aware of them charging user fees for services.
He indicated it is something that will have to be looked at.
Number 148
CHUCK WEBBER, Chairman, District Export Council, testified via
teleconference from Anchorage. Mr. Webber informed the committee
members his organization's report discusses the position they have
taken with regard to exporting in general. He said he would answer
any questions Co-Chair Rieger may have.
CO-CHAIR RIEGER referred to the third "WHEREAS" clause in the draft
resolution and said there is an increased interest in non-Asian
markets. He asked how that would tie in with the heavy financial
commitment that Alaska has made to just two countries, Japan and
Korea. He also asked if Alaska should establish more offices like
those in other countries or if there is a different approach for
the assistance in the other countries compared to Japan and Korea.
Number 170
MARK WILSON, District Export Council, testified via teleconference
from Anchorage. He said what they are suggesting in the draft
resolution is in points 1 through 6 which may reflect on Co-Chair
Rieger's question. Mr. Wilson referred to whether or not offices
should be established in other countries and said he thinks it is
something that should be studied. Mr. Wilson said their position
is that they would like to build on what currently exists.
Number 198
BILL NOWELL, District Export Council, testified via teleconference
from Anchorage. He noted he helped write the District Export
Council's report. Mr. Nowell said we have the attention of the
delegation in Washington to thank for the corresponding levels of
the Hampton University as well as the backing of the U.S.
Department of Commerce.
CO-CHAIR RIEGER noted there is budget pressure across the board.
He said his thought would be to not insist on the reduction of any
effort, but if it's to be maintained, that there be a reduction of
general fund support and that the support be replaced with other
funds. The other question is more of a fundamental question of
whether our policy should be more flexible geographically and
whether we should pre-decide that we're going to focus on a small
number of countries and really pour our resources there, or, if we
should be more equitable in our resources and follow a more demand
driven policy that if attention focuses more on Europe in the
future, that we would redirect our assistance there.
Number 260
MR. WEBBER said the Export Council is willing and able to provide
some services. He said they would like to be included in some of
the decision making processes. He noted they would like to offer
their input and are gearing to do so. Mr. Webber continued to
inform the committee of the council's expertise in exporting.
Number 278
CO-CHAIR BEVERLY MASEK asked Mr. Webber if he has had a chance to
see the draft resolution and, if so, does he have any comments.
MR. WEBBER noted he only received the resolution a few minutes
before the meeting started and indicated he doesn't currently have
any suggestions.
Number 340
BILL NOWELL said the resolution alludes to co-location or seeking
efficiencies. He said none of us could agree more that
efficiencies, as a practical matter, is something that needs to be
looked at. Currently, there is no doubt that our international
trade effort has been on a sharp increase, at least since the 70s.
He said why not review the state and federal agencies as to how
they currently stand. In the District Export Council's review,
they didn't feel that (indisc.) to the full range of possibilities
of how we might spread our money a little better. He said the
council is heading in the direction of seeking efficiencies. The
targeting of $500,000 over the next two years might be more drastic
than he or the council would agree with at this point.
CO-CHAIR MASEK said she and Senator Rieger took that into strong
consideration based on the documents and testimony they have
received regarding export. She noted there is growing strong
support for more of the private industry to get involved and make
recommendations.
MR. NOWELL asked if there were any questions regarding the District
Export Council's resolution.
Number 348
CO-CHAIR RIEGER referred to the six points at the end of the
council's resolution and said point 2 says there has to be more
convenient and more one-stop access to the potential user. He said
the task force's resolution focuses more on information and the
council's focuses more on services. Co-Chair Rieger referred to
point 4 and said that is something he is open to and would be open
to including a point in the draft resolution regarding having some
export finance information available and acknowledging that it
probably has to come through a specialist. He referred to point 5
and said he thinks that is not in conflict. He said the resolution
calls for employing efficiencies as does the council's resolution,
and we are supporting maintaining the existence although
transferring to user support as part of those efficiencies. Co-
Chair Rieger said he doesn't think point 6 is in conflict at all.
He said he thinks the basic idea is that the trade providers should
be driving the process and not the policy makers. Co-Chair Rieger
referred to point 3 and said the task force's resolution is silent
on AIDEA. He referred to point 1 and said he would have to think
about what is being called for. Co-Chair Rieger said he believes
that the trade patterns for the state have to be driven by the
private sector. He said he disagrees that Alaska's political
leadership should be setting export policy.
MR. NOWELL indicated the council had received a letter from the
Governor Knowels and read, "I am asking the state's top policy
makers in the Department of Commerce and Economic Development from
the university (indisc.) to work with your group and other
interested members of the private sector to ensure these issues are
addressed quickly and effectively." He said they were encouraged
by receiving that letter. He said there is so much land and money
in Alaska which is under either federal or state government
control. The private sector needs a proactive strong support in
terms of law, regulation and facilities.
Number 428
MR. WILSON commented on user fees, saying he can understand the
background for why that is being looked at. He said charging user
fees has resulted in the "kiss of death" for these offices. The
offices represent something significantly different. There is no
way that those offices, to operate efficiently, can depend on user
fees to support them and it's not appropriate.
Number 448
DEBBY SEDWICK, Assistant Commissioner, Division of Trade and
Development, Department of Commerce and Economic Development, was
next to testify via teleconference. She commented on a sentence
from the draft resolution, "The combination of efficiencies through
consolidation and transfers to user fee support should result in
savings of at least $500,000 in 1997, and another $500,000 in
1998;", (NOTE: Most of Ms. Sedwick's testimony was indiscernible).
She asked where the $500,000 figure came from.
CO-CHAIR RIEGER said that number is the number that was put forward
to get discussion rolling. It was looked at in the context of the
overall amount of money which goes to international trade and the
idea of user support. He noted the whole process would go to the
Finance Committees for their review of what can be done.
Number 466
WENDY REDMAN, Vice President, Statewide University System,
University of Alaska, came forward to address the committee. She
explained the $500,000 presents a problem. She said her preference
would be that there not be a dollar amount and that there be some
specific suggestions. She suggested using the wording "substantial
savings." If that is unacceptable, she would suggest that there be
a fixed number and say, "Should result in savings of at least
$500,000 over the next three years or $1 million over the next
three years," so that there is some time to do some planning. Some
of the things that have been discussed are things that are going to
take a substantial amount of time to do. Ms. Redman said she
thinks that approach would be easier.
Number 485
MR. NOWELL commented he thought Ms. Redman's comments are a good
idea. He discussed the overseas communication budget.
Number 500
MR. WEBBER commented on how exporting activity is a great future
for Alaska. He explained their databases that are being created to
help with exporting information.
CO-CHAIR RIEGER discussed the savings that could occur if more
information could be made available on-line.
AN UNIDENTIFIED SPEAKER referred to overseas offices and said he
thinks it is important that wherever those offices are that they
have sufficient funding to do more than just turn on the lights,
pay a few salaries and pay rent. For them to be effective and to
do the things that they need to do on behalf of the state and the
companies who do business here, they have to have the resources to
actively take part in trade promotion.
Number 525
CO-CHAIR RIEGER indicated he handed out an amendment in response to
testimony taken at the last meeting. A large number of witnesses
testified in favor of an export/finance specialist. He said he is
open to the idea of adding that to the resolution and has drafted
some language which would appear as the second resolved clause,
"FURTHER RESOLVED that the information services provided should
include specialized export finance information which probably will
need to be provided through an experienced specialist..." He said
that would be a clause to address the testimony in favor of an
export/finance specialist.
Number 530
CO-CHAIR MASEK said she had no objection to the wording.
CO-CHAIR RIEGER noted the task force is not the Finance Committee
and that the task force is making a recommendation. He said Ms.
Redman's suggestion was that we target a savings of $1 million over
three years instead of saying $500,000 per year for two years. Co-
Chair Rieger asked Co-Chair Masek if she has an opinion.
CO-CHAIR MASEK said she liked the wording of $500,000 in 1997
and....
CO-CHAIR RIEGER indicated there are only two members in attendance
and there is no further business for the task force to take up.
Number 545
CO-CHAIR MASEK said she would like to make some comments. She said
during meetings there has been a lot of talk about what the task
force has been doing and what they intend to do. She said she
would like to go on record saying she doesn't approve of some of
the back door tactics that were used by the Administration and
others to convey the impression that legislators were recommending
eliminating overseas offices. She said when former governors and
congressmen receive and act upon false information, it really is a
serious matter that she doesn't take very lightly. Co-Chair Masek
said she thinks the task force needs to hear an explanation as to
the source of that statement and letters that were sent to the
members' offices. She said she has found that no one in the House
or Senate has suggested any action in closing the overseas offices
in Japan and Korea. She is sad to see that sponsors of these
rumors are using well respected officials to respond to a position
which in truth does not exist. If they're going to continue to put
out false information like that, she thinks it is important that it
is done in a manner that they be accountable and responsible about
where they're getting their information from. Co-Chair Masek said
she has not put out any recommendation to close the offices in
Japan and Korea. After hearing a wide range of sides from the
working task force on the draft resolution, she believes they are
really reasonable and the goals were set out that hopefully all
parties could agree on. She said she would recommend the
resolution be moved in final to the full Finance bodies for further
review.
Number 560
CO-CHAIR RIEGER indicated he doesn't have much to add other than to
reiterate that at the very first meeting there was a report from a
contractor that was working on this, and the chairs, at that time,
made it very clear that was not the position of the committee. He
said since that time, the task force has been responding to alarmed
parties thinking that there was a position of the chairs or of the
committee that they were going to recommend closing the Japan and
Korea offices. It has been a tough ongoing problem, but he hopes
it hasn't done damage to the relationship with those countries.
CO-CHAIR RIEGER thanked everybody who testified and also thanked
the Export Council for the work they have done on this issue.
TAPE 96-5, SIDE B
Number 001
CHUCK ZAGER, U.S. Department of Commerce, was next to testify via
teleconference. He noted he is in an awkward position as a
representative of a federal agency which is involved in working
with companies throughout the state of Alaska to help them get
their products and services to foreign markets. Mr. Zager said he
needs the kind of resources that are available through the Division
of Trade and Development through their offices in Tokyo and Seoul.
Mr. Zager said he needs the kind of strengths those offices have
and the strengths he gets from the World Trade Center. He thinks
with proper support from the state, there will be some dramatic
changes. Mr. Zager referred to Co-Chair Masek's concern and said
it is very justified, but in reviewing the draft resolution, dated
March 12, the "FURTHER RESOLVED" clause could prove to be the
source of that confusion. He said if the intent is to move the
resolution, the task force might want to take a look at that clause
and perhaps clarify the intent.
CO-CHAIR RIEGER asked if there was further testifiers. Hearing
none, he adjourned the meeting at 4:58 p.m.
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