Finance President Vice President Members: Marcelo Siero Jim Faith Staff: Lidia Thompson If you would like to have an article published on this
newsletter please contact the editor by email.
This newsletter has been created by MBITA's editor
If you would like to have an article published on this newsletter please contact the editor by email.
This newsletter has been created by MBITA's editor
|Last November Governor Arnold Schwarzenegger and the California Commission for Jobs and Economic Growth visited Tokyo, Japan during a four-day trade mission. Governor Schwarzenegger is very popular in Japan and is known affectionately as the big American movie star ("Shuwa-chan"). This trade mission was designed to build on the historical success of trade between Japan and California, and to leverage the Governor's popularity in Japan to help expand Japanese tourism in California, increase California agricultural exports to Japan and encourage Direct Foreign Investment (DFI) and job creation by Japanese companies in California.|
|Japan is the second-largest importer of California products and services after Mexico, and the number one source for direct foreign investment (DFI) in California. However since 9/11, Japanese tourism and agricultural purchases have declined and DFI has remained flat in recent years. On the other hand, China's economy continues to grow especially in the telecommunications, information technology and agricultural industries and trade with Japan in these industry sectors also continues to grow rapidly.|
Even with China's
internal problems such as the farming-based poverty sectors in inland
areas of China, the inefficiencies of government run companies and the
possibility of a 'too-hot' economy with inflationary tendencies, China
continues to move its economic machine forward in the global economy becoming
a serious competitive force to the U.S. for the Japanese marketplace.
Also, the Beijing Olympics coming in 2008 will surely add more fuel to
the Chinese economic juggernaut.
Japan currently imports most of its agricultural products from China and the U.S. Because of Japan's aging society and the shortage of labor, accompanied with the decline of domestic agricultural production, the demand for imported fruits and vegetables will continue to increase for Japan. Where will Japan import its agricultural needs, China or the U.S.? China has the advantage of lower shipping costs and better price, yet, quality is a critical issue for the Japanese consumer who became weary of Chinese agricultural imports after the illness and deaths that occurred in China in 2002 because of residual chemicals found in agricultural products. China has now made every effort to grow its produce with less pesticides and also has increased its organic produce production for the Japanese consumer, which paints another competitive picture for the future of U.S. agriculture exports to Japan.
How can California's exports compete with China in Japan? Many great success stories, such as California wine, surfing equipment and sportswear, skateboarding equipment, 'street' and 'L.A.' Fashion and the entertainment industry gives California a competitive advantage with China in the Japanese marketplace. Japan appreciates and continues to have a strong affection for California 'life-style' products.
of Tokyo Disney Land (TDL) and Universal Studio Japan (USJ) are good examples
of successfully promoting the 'California Brand' in Japan. Why did they
succeed? TDL is like Disneyland-California and USJ is also just like Universal
Hollywood. History has now proven that the Japanese consumer appreciates
and supports authenticity and quality, yet, how do they continue this
success? Tokyo Disney Sea which opened in 2001 maintains the 'California
brand' but has been customized ('Japan-ize') to appeal to the Japanese
consumer. Extensive research was conducted at Universal Studios in Hollywood
and Florida by the Japanese to determine what were the most popular attractions
to Japanese tourists, and then they brought those attractions to USJ in
Japan. Thus, it is very important when promoting the 'California Brand',
to 'Japan-ize' the 'California Brand'.
Today the Food theme park Industry has become very successful in Japan. Entertainment parks like "Curry Museum", "Ramen (Noodle) Museum", "Ice Cream City", "Sweets Forest" are thriving. The success of these ventures is not just eating the food but to learn the history of these foods. Perhaps, the emergence of 'California cuisine' in restaurants throughout California might be successful in Japan?
|Governor Arnold Schwarzenegger at "The Taste of California" food show in Tokyo, Japan, November 11, 2004. The Governor is tasting the food cooked by chefs Mary sue Milliken of the Border Grill - on the left - and Emily Luchetti of Farallon - on the right -. The two Californian chefs were competing against two Japanese chefs in an 'Iron Chef' like competition using all California-grown ingredients.|
The opening of Universal
Studio Japan in 2001 began with the 'cutting of the ribbon' by a famous
international celebrity, Arnold Schwarzenegger. California has a great
opportunity now to further promote the 'California Brand' in Japan under
the leadership of 'Shuwa-chan'.
Click here for Tomoko Takamura's resume.
MBITA and TradePort
will participate in the Bridging International
Business Between the U.S. and Spain conference at
"BRIDGING INTERNATIONAL BUSINESS OPPORTUNITIES BETWEEN THE U.S. AND SPAIN" is the Third Edition of the Executive Program that will be held at THE HARVARD FACULTY CLUB (Cambridge, Boston, MA) from May 15-18, 2005. The four-day program aims to help bridge the cultural gap that divides the U.S and Spain, a key trading partner in Europe.
This unique program targets American and Spanish managers who are currently working in both markets or looking to explore opportunities in either country. It is specifically designed to help understand the pitfalls and privileges of doing business in either market. The Executive Program will offer specific knowledge of how the corporate culture of each country differs from the other and how to make those differences work to their company's advantage.
The mix of executives from both nations offers an excellent opportunity for managers to learn from each other's varied experiences as well as from the faculty, who bring a wealth of international business talent to the program.
Today, as never before, U.S and Spanish interests are closely intertwined. The countries' foreign policies and national objectives track closely, they share similarly sized Spanish-speaking population -the number of Spanish-speakers in the U.S. is currently 35 million, just below Spain's population of 40 million -and business ties are booming. Consider these statistics:
year, the vibrant Spanish economy -the eighth largest economy in the
OECD and the fifth largest in the European Community -exported nearly
6 billion dollars in goods and services to the U.S. A decade-long
economic boom, marked by bullish business confidence, has lured more
than 600 U.S. companies to establish subsidiaries in Spain. Add that
to 200 Spanish companies with subsidiaries in the U.S and the more
than 13,500 companies that have relevant economic and trade ties with
|John Quelch, the Associate Dean of the Harvard Business School -in the middle- with two managers of "Natura Bissé" company|
For U.S. companies, Spain offers a wealth of opportunities and a chance to gain foothold in one of the world's most important economic zones, the European Union. For Spanish companies, the U.S. continues to offer the enticing challenge of doing business in the world's largest single market.
The Executive Program is supported by Real Colegio Complutense at Harvard, the American Embassy in Spain, the American Chamber of Commerce in Spain, as well as others financial institutions.
The Real Colegio Complutense is non-profit organization established in 1990 by Complutense University of Madrid, in cooperation with Harvard University. The organization was created to foster scientific and academic exchanges between Harvard and Complutense as well as other prominent universities in Spain.
MBITA will be participating in this conference at Harvard as part of TradePort's California/Spain initiative.
Africa: Diamond in the Rough
by Monica Figa, MBITA Intern
As a global
economics student at the University of California- Santa Cruz
and an intern at MBITA, I have had the opportunity to study
emerging markets and economic development around the world.
I was asked by MBITA to choose an area of the emerging world
where I felt there was great opportunity for American business.
I chose Africa.
long been the 'forgotten' continent. Plagued by war, political
instability and disease it has become one of the poorest areas
of the world and consequently, its economic potential has been
vastly overlooked. Africa has stuck out as an area with great
economic potential and resources to offer the rest of the world.However,
reconstruction and reform of Africa's societies, economies and
politics are extremely necessary in order to be able to take
advantage of its economic potential.
The United States took the initiative to tap into Africa's resources and implement economic policies that will potentially help develop the African economy. This initiative was converted into the "African Growth and Opportunity" Act (AGOA), a free trade agreement to foster prosperity between sub-Saharan African countries and the United States.
In 2000, AGOA was passed by former President Clinton and was later pushed once again by President Bush. AGOA facilitates free trade between the United States and sub-Saharan African countries. For eligibility to participate in the act, African countries must work towards a market-based economy and political stability, eliminate trade barriers to the U.S., work against human rights violations and implement poverty reduction programs. This is determined by U.S. inspectors and authorized by the U.S. President. Currently there are 37 sub-Saharan African countries eligible to trade benefits under AGOA.(1)
The objective of the act is to promote free trade between the granted countries in order to alleviate countries of poverty and foreign debts and combat AIDS, human rights violations, and terrorism. This is done through lowering and abolishing trade barriers between the countries, granting duty-free treatment, establishing free trade zones and continuously granting access to U.S. inspectors in order to assess their state.(1)
In 2003 exports from the AGOA African countries to the U.S. increased by 55 percent (2), whereas American businesses increased their exports to sub-Saharan African countries by 15 percent.(3) Also, 80 percent of AGOA imports to Africa were petroleum products with an increase of over 50 percent in textile apparel imports. Crude oil, diamonds, platinum and motor vehicles were AGOA countries primary exports to the U.S.(3)
Although these measures seem to be very beneficial to the AGOA African countries, most of which are in destitute poverty, some critics are concerned about the risk infringement of sovereignty in these countries. Eligibility laws are harsh enough on African countries to amend their economic policies and laws in ways that might not necessarily be beneficial.(3)
Also, some critics
believe that economic development is more successful when trade
policies are established for countries based on their individual
economic and political situations rather than implementing a general
'economic formula' for all countries in a region. This criticism
stems from previous free trade acts with Latin America under the
IMF and WTO that were not as successful as initially promised.(2)
Several years must pass before the long-run effects on economic progress are visible in these countries. Particular attention must be paid to how countries' economies and political arenas individually react to these trade policies in order to determine if the AGOA is right for them or not. However, sub-Saharan markets are finally beginning to expand with a stronger stance in global trade and more opportunity for American companies.
For more information on AGOA, visit: www.agoa.gov, www.tradewatch.org, www.watradehub.com and www.export.gov
1. African Growth and Opportunity Act. <www.agoa.gov>
2. Export.Gov. US Department of Commerce 2001. <www.export.gov>
3. West African Trade Hub. Carana Corp. 2003-2004. <www.watradehub.com>
4. Global Trade Watch. Public Citizen 2005. <www.tradewatch.org>
2nd Annual 'Global
California-Expanding Opportunities' Conference.
The 2nd annual 'Global California-Expanding Opportunities' conference was held on February 10, 2005 at the Port of Oakland in CA. The event was produced by the Monterey Bay International Trade Association (MBITA), TradePort.org and the CalTrade Report.
Over 140 participants participated in the day-long trade conference with over twenty experts speaking on five different panels discussing the various opportunities, challenges and future of California's global trade industry. Panel experts included representatives from economic development organizations, trade promotion service organizations, industry groups, chambers of commerce, trade associations and companies from a variety of industry sectors. Panel topics were as follows:
One, Pulling SMEs Into the Free Trade Loop, moderated by Michael
White, CalTrade Report,
Panel Two, Issues and Challenges Facing California's Transportation Infrastructure, moderated by Sean Randolph, Bay Area Economic Forum, featured:
Panel Three, Security and Trade in a Post-9/11 World, moderated by Don Masters, Homeland Security Industries Association, featured:
Panel Four, Marketing the California Brand and Sacramento's New Role in Trade Promotion, moderated by Janice Cooper, California Pacific Resources, Inc., featured:
Panel Five, Forging Strategic Alliances, moderated by Michael Liikala, U.S. Commercial Service, featured:
Some of the major points discussed during the conference were the looming infrastructure crisis that exists in the L.A./Long Beach and Oakland port regions with their lack of freight train routes and traffic-free highways, and the need for a more coordinated effort to better serve small and mid-sized enterprises between the State Government and the public-private sector trade promotion service industry.
TradePort, managed by MBITA, also gave a presentation on some of its new features and its alliance with the ground-breaking online trade finance website, Trade Export Finance Online (TEFO). TradePort also announced its participation in the 'GlobalCalifornia.org' project funded through a grant from the Economic and Workforce Development (EWD) program through the Chancellor's office of the California Community Colleges.
goal of the GlobalCalifornia.org program is to create
a 'click & mortar' web portal to provide seamless and transparent
interaction between exporters, importers, vendors and participating
trade service providers to better serve small to mid-sized enterprises
in the Monterey Bay and Silicon Valley region. The program will be launched
in April of 2005 and accessible at www.globalcalifornia.org.
Stay tuned for more details about this new project for MBITA and TradePort.