California's trade program: a model state-federal partnership - includes information on export finance services; trade contacts; Cresset Powers, an export trading company

Business America, March 27, 1989 by Niels Erich

As states develop innovative new strategies for promoting international trade, coordinating those efforts with federal export promotion programs has taken on growing importance.

It is certainly important to the state government of California, the nation's number one exporting state (see chart on page 8). At a meeting at the U.S. Department of Commerce in Washington, D.C., March 13, eight of 11 members of the California State World Trade Commission visited with top officials of the Department's International Trade Administration and Bureau of Export Administration.

Commission Chairman Robert Monagan and Executive Director Gregory Mignano presented two reports that illustrate the potential for state/ federal cooperation: a survey of business and job growth among California firms taking part in World Trade Commission overseas trade show exhibits; and a memorandum identifying opportunities for more closely coordinating state and federal energies in specific trade promotion program areas.

"We see a lot of exciting possibilities for expanding joint trade promotion activities over time," says Mignano. "Our objective is to utilize federal resources such as financing programs and foreign commercial offices more fully, in connection with programs tailored to the particular needs of California business."

California began to develop a comprehensive trade promotion program in 1983, with bipartisan support from the State Legislature and Gov. George Deukmejian to establish the World Trade Commission. From initial funding of less than $500,000, the state program has since grown into a coordinated $10 million export development effort. Commission activities focus in four key areas:

*Trade shows and marketing assistance; *Export finance; *Trade policy advocacy and research; and *Interagency coordination to "internationalize" state programs.

The commission's major objective is to offer marketing, financing, and research support to small- and medium-sized California companies, in order to simplify and reduce the cost of selling in foreign markets. Additionally, the commission provides trade input in formulating related state programs and policies. Through Governor Deukmejian's Washington, D.C. office, it serves as a voice for California's trade interests as they pertain to federal policy.

Export Development Through its Office of Export Development in Long Beach, Calif., the commission assists both new-to-export companies and established exporters looking to enter new markets, with low-cost trade show packages, overseas trade catalog promotions, and trade leads.

In 1988, the office organized special California booths for two dozen international trade shows, usually as part of larger U.S. pavilions assembled by the Commerce Department's U.S. and Foreign Commercial Service, part of the International Trade Administration. More than 300 California manufacturing and exporting firms took advantage of shared-booth "MiniDisplays," travel and freight forwarding discounts, and translation services.

By reserving a standard exhibit booth and dividing it into several displays, the Office of Export Development has made exhibit space available to smaller companies which otherwise could not have participated in a trade show on their own. Apart from the savings on booth space, the costs of promotional and display materials are considerably less.

"We get them to the show, ship their displays, book hotels, provide translation, and mind the store while they keep appointments," says Office of Export Development Director Robert DeMartini of the trade show participants. "Sometimes we give them tips on ways to do additional promotion. We want them to come out of these shows as winners, because that's the only way we win."

The office also arranges meetings with foreign buyers and distributors through the U.S. and Foreign Commercial Service and California's own trade and investment offices in London, Tokyo, and Mexico City. Two new state offices in Hong Kong and Frankfurt are scheduled to open by the end of the year.

The independent university study presented to Commerce Department officials includes survey responses from more than 200 companies participating in commission-organized trade show exhibits since 1985. One in 14 generated more than $1 million in new business through overseas agents, distributors, licensors, wholesalers, and retailers visiting their "MiniDisplays."

Roughly one in four enjoyed sales of $100,000 to $500,000 as a direct result of participation in these shows, which focus on major California industry sectors such as computers and office automation equipment, electrical components, aircraft, telecommunications equipment, and medical and scientific instruments.

Total documented export sales directly attributable to the trade show component of California State World Trade Commission activities alone since 1985 have amounted to more than $66 million.

A more recent state export development project involves publications. Recently, the Office of Export Development joined with the Commerce Department to produce a special edition of Commercial News USA devoted exclusively to California products. Some 120 California firms participated in the publication, which has reached 100,000 business readers worldwide.