A governor's perspective on the trade - Wisconsin governor Tommy G. Thompson

Business America, May 6, 1991 by Tommy G. Thomposn

Official and cultural exchanges often must precede business relationships. NGA and the National Governors' Association of Japan have exchanged visits since 1962, long before trade with Japan reached today's level of significance. Last November, governors of seven American states and six Japanese prefectures met in Washington, D.C. The meeting, which focused on "Coping with Change in the Economy and the Environment," was the 20th of its kind between U.S. and Japanese governors.

Mexico. The opportunities in Mexico are enormous. With Mexican President Carlos Salinas de Gortari's decision to privatize major industries and lower barriers to investment and trade, Mexico's modernizing economy of 85 million people presents tremendous trade potential.

Last November, I led a 31-member trade mission from Wisconsin to Mexico. Measured in dollars of sales per day, this unquestionably was the single most successful of the eight foreign trade missions I have led.

At the time, I initiated a sister-state relationship between the state of Wisconsin and the state of Jalisco. When this is established, perhaps by the end of this year, I am told this will be the first state-to-state agreement with Mexico (although city-to-city agreements are common). Jalisco, like Wisconsin, is a dairy state, with forestry, tourism, and high-tech manufacturing. Its capital, Guadalajara, is the second largest city in Mexico. Wisconsin's Department of Development also is considering setting up an office in Mexico that would cover trade with Latin America and the Caribbean. Wisconsin would be only the fourth U.S. state to open an office in Mexico, so there is a considerable amount of untapped potential there.

Since my trip to Mexico, President Bush has proposed a North American Free Trade Agreement comprising the United States, Canada, and Mexico. With a combined population of more than 350 million, such a market not only would be an opportunity for American businesses, but it also would help us compete with an economically integrated Europe and Asia. In the discussion and debate about this proposal in the three countries, many other factors beyond trade will need to be addressed. In the meantime, states can continue to pursue the emerging trade opportunities with our neighbors to the South.

Multilateral Trade Negotiations

For more than 40 years, the General Agreement on Tariffs and Trade (GATT) has been the major institution responsible for reducing trade barriers around the world. Governors are interested in the Uruguay Round because we are concerned about the future of our states' farmers and bankers, our economic development programs, our regulatory schemes, and our state purchasing practices and procedures. These are just some of the areas that will be affected by the outcome of the GATT negotiations. In fact, the potential effects of a broad-reaching international agreement raise a number of questions.

For example:

Agriculture. What will be the future of U.S. farm price supports? How will the wheat, corn, soybean, dairy, and sugar farmers be affected by changes in domestic programs? How might they benefit from increased access to European and other markets? What about the effects on state economies of lowering barriers to trade in fisheries and forestry products?