Final
Presentation by Jim Reis on International Trade
ECONOMIC DEVELOPMENT
Votes:
Action Taken:
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11:24 AM -- Presentation by Jim Reis, World Trade Center, on International Trade and Business in Colorado
Mr. Jim Reis, President of the Denver World Trade Center, opened by discussing his organization, which is a privately-funded organization that is part of a worldwide World Trade Center network. He indicated that the goal of the center is to increase Colorado activity in the global marketplace. He indicated that the state exported $2.8 billion worth of products and services in 1989, when the World Trade Center first opened. Exports increased to $6.7 billion in 2004. He stated that international trade has created 20,000 jobs in Colorado. However, he noted that the state has also lost jobs due to globalization. Mr. Reis commented that the Bureau of Economic Analysis indicates that 5,000 direct jobs are created for every $1 billion in exports.
Mr. Reis explained some statistics on Colorado's trading partners. Statistics on Colorado's involvement in international trade were distributed to the committee (Attachment A). He stated that China is increasingly a significant importer of Colorado products. NAFTA members receive 36 percent of Colorado's exports. Japan used to be the largest importer of Colorado's goods and services, but changes in the Japanese economy and the proliferation of free trade agreements have caused Japan to import less than other countries. He stated that developing economies can benefit by international trade; international trade increases the wealth of other countries, which benefits the American economy. He stated that Kodak's exports to Australia have doubled since the Australian free trade agreement was implemented. He stated that Colorado telecommunications exports to India have increased 40 percent because of its developing economy.
Mr. Reis commented on the importance of education, particularly in technology, to the future of Colorado in the global economic marketplace.
11:38 AM
Mr. Reis continued by discussing the increase in Colorado jobs due to globalization. He indicated that there were 76,000 employees in Colorado employed by foreign companies; 1 out of every 9 manufacturers in Colorado are foreign-owned companies. He stated that the country's trade deficit exists because the United States is a large consuming nation.
Mr. Reis stated that the world will continue to increase its business with Colorado as long as it continues to build a strong economy, which must include the presence of an educated workforce. He explained that the state needs to leverage the most out of each dollar it spends on economic development and business expansion because Colorado does not spend has much as other states. Also, the state needs to partner with the business community, continue to support the efforts of the Office of Economic Development, and maintain a presence around the world by building partnerships. He urged the committee to help their constituents understand the importance of international trade. He stated that society needs to help workers who are displaced by the dynamic global marketplace transition into new employment.
Mr. Reis commented on the need to continue to obtain more international flights to Colorado and support tourism, particularly international visitors. He explained that international tourism efforts are extremely important because foreign visitors discover ideas for their markets which increases international trade in Colorado.
11:52 AM
Representative Borodkin asked about the quality of jobs generated by international trade. Mr. Reis explained that companies that export tend to pay 10 to 15 percent more than companies that do not. Also, jobs involved in international business tend to be more complicated and require more experience; thus, they generally pay more.
Mr. Reis stated that he does not have specific policy prescriptions regarding how the state can support efforts in international trade. The legislature needs to be aware of international trade when it is making policy and the state needs to increase its partnerships internationally.
Representative Massey asked about organizations that help companies with exporting questions and trade rules. Mr. Reis explained that the Denver World Trade Center works with federal government organizations and the Office of Economic Development and International Trade to provide assistance. The committee discussed whether schools have programs dealing with international trade and the need for the business community to partner with schools to create such programs. Senator Tapia discussed the drop in international students in the country after the 9/11 terrorist attacks. Mr. Reis discussed the importance of international students, but indicated that the country needed to also balance this need with security concerns.
12:05 PM
Ms. Carolyn Siegel, member of the advisory board, discussed the negative impacts of international trade in Colorado, such as the loss of jobs due to outsourcing. She also commented on the possible negative consequences of the country's large trade deficit. Mr. Reis indicated that there was a lack of data on imports into Colorado, but stated that it was likely that the state had a trade deficit as does the entire country. He also explained that the state cannot do much to stop the changes that are resulting from Colorado's involvement in the global economy. Ms. Siegel concluded by indicating that the state needs to look at the whole picture and should help keep good jobs in the state.