Latin America Offers State Trade Partner Possibilities

By Marie Price The Journal Record | THE JOURNAL RECORD, January 25, 2000 | Go to article overview

Latin America Offers State Trade Partner Possibilities

Marie Price The Journal Record, THE JOURNAL RECORD

Oklahoma and many Latin American countries have one thing in common -- having to diversify their oil-dependent economies in order to survive.

At one time, Rep. Bill Nations, D-Norman, told Latin American representatives attending a meeting of the Joint Special International Development Committee Monday, tax revenues from the energy industry made up about one-third of Oklahoma's state budget. Since the oil bust of the early 1980s, its share has dropped to about 10 percent.

"The development of international trade is a high priority for the state of Oklahoma, maybe its top priority," the lawmaker said.

Nations, who chaired the meeting with Sen. Bernest Cain, D- Oklahoma City, was part of an Oklahoma international trade delegation that visited Washington, D.C., last summer.

"We got a new perspective on how important Latin America is to Oklahoma as a trade partner," Nations said.

Attending Monday's meeting were government and business representatives from Honduras, Costa Rica, Panama, Nicaragua, Venezuela and Ecuador. The group will also visit Washington, D.C., California and Puerto Rico.

Elba Julieta Garcia, with the Ministry of Finance in Venezuela, asked how diversity of Oklahoma's economy was accomplished.

Nations said that it was actually a matter of necessity brought about by the bottoming-out of the oil industry in the early 1980s.

"There has been more diversification of the Oklahoma economy in the last decade than in all of state history," he said. "There's nothing like necessity as a motivator."

To accelerate the transition, Nations said, the Legislature enacted changes in the state's tax structure and incentives such as the Quality Jobs Act to attract manufacturing and other types of industry to Oklahoma.

Cain asked Garcia what steps Venezuela has taken toward diversification.

She replied that the nation is currently working on a foreign investment law to encourage a more broadly based economy.

Nations said that in recent years Oklahoma's diversification emphasis has been shifting to technology and ensuring an educated work force.

Another trade representative asked how the move away from heavy reliance on oil and agriculture was achieved without displacing those who work in those areas.

Rep. M.C. Leist, D-Morris, said that some displacement cannot be avoided.

"That's just a fact of life," he said.

Leist said that Oklahoma's nationally known vocational-technical education system is a valuable tool in retraining those affected by changes in the state's economic structure. At the same time, he said, the state is taking the initial steps in boosting the value- added concept in agriculture rather than merely exporting its raw materials.

Rep. Raymond G. McCarter, D-Marlow, said that when the oil industry went bust, much of Oklahoma's remaining economy was in the agriculture sector, and transition to a more diverse economy structure was difficult.

"We had a tough time," he said.

McCarter said that many of those who had earned their living in the energy sector had to retrain "or go to the unemployment office." He agreed that the state's strong vo-tech system was the salvation of many of those needing to learn new ways of making a living.

"We've done quite well, although some thought we wouldn't," he said. "We're making giant strides today."

Nations said that the extent of the oil industry's problems ultimately reached into most Oklahoma households.

"It was not hard to convince people of the need to change," he said.

Horacio Rose, with the Agriculture and Forestry Ministry of Nicaragua, asked what is Oklahoma's general view of the Free Market Area of the Americas concept.

"I think that Oklahoma is very interested in this prospect," said Nations. "We've come to see Latin America as the best focus for the development of international trade in Oklahoma."

Nations said that Oklahoma's international trade efforts could be improved.

"I think it's generally perceived that Oklahoma is an underachiever," he said. "We can do much better."

He also pointed out that Oklahoma shares with Latin America the importance to its economy of two key industries: agriculture and oil.

"My view is that we are just on the brink of being able to have a very productive relationship with Latin America," Nations said.

Priscilla Harris, protocol officer with the Oklahoma Department of Commerce, said that the group is sponsored nationally by the U.S. Information Agency.

She explained briefly how the Oklahoma Legislature works with state agencies, chambers of commerce and related organizations to promote Oklahoma exports.

"It's important that we all work together," Harris said, noting that a commerce official is now in Brazil promoting trade with that country.

She said that her agency promotes exports, foreign direct investment and globalization. To accomplish the latter, Harris said, the department welcomes international delegations and visitors, encourages bilateral relations between countries and promotes international education in Oklahoma. There are about 9,000 international students attending school in Oklahoma.

"We do have a relationship with each one of your countries," Harris told the representatives. "You are very important to us."

Harris also pointed out that Oklahoma boasts the nation's most inland port, the Port of Catoosa.

"That's very important, because we see this as also our connection with Central America and South America," she said.

McCarter said that some people have concerns about a free trade agreement with Latin America, ranging from inexpensive labor to the impact of any such agreement on domestic markets.

"Although I believe there is much more positive than negative," he said.

Sen. Gilmer Capps, D-Snyder, one of the key sponsors of spaceport legislation in Oklahoma, said that he would like to develop the idea in conjunction with equatorial nations. He said that the latter enjoy an advantage in space exploration, due to the "sling shot" effect, which makes it easier to launch and retrieve spacecraft and satellites.

Another Latin American representative asked how the legislative panel is able to affect state trade policy.

Nations pointed out that the two committees are currently advisory only, although they do recommend legislation to the House and Senate and form trade delegations to other countries.

Capps said that the committees have been in existence for several years, but have languished recently and are just being reactivated.

Responding to a question about what the states in general have done to increase the importance of international trade, Harris said that a strategic plan is under development. She said it will bring together those in agriculture, tourism, commerce, chambers of commerce, nonprofit groups and business to identify a mission and action steps targeting communication, collaboration, coordination and cooperation in concert to reach a consensus on trade. Harris said the plan is due for presentation to government officials in March.

"It will be a plan to bring international trade to the forefront," she said.

Cain said that there are many successful businesses and industries in Oklahoma, but that they have exhibited a hesitancy to expand into foreign markets.

"I think that's a big mistake," he said.

Leist said that there is a tendency of American firms to think of Latin America as a market rather than as a marketing partner.

"It has a two-way communication," he said.

Leist said that there have been some joint international projects in the agriculture arena, however.

Mike Seney, vice president of The State Chamber, outlined the Oklahoma legislative process for the delegation, focusing on the role of the chamber and business community.

He said that Oklahoma is in a unique geographic position trade- wise.

"We are right in the middle of all of that international trade," Seney said.

Noting the trade-related efforts of the state's congressional delegation, Seney also said that the chamber is working closely with those involved in launching the Free Trade Area of the Americas.

Seney distributed to the group copies of the chamber's 2000 legislative agenda, which he said includes a recommendation that the international development panels of the House and Senate be made standing committees.

Seney concurred that agriculture and energy are two of the cornerstones of the Oklahoma economy, as they are in the international arena.

Also taking part in the meeting were: Maria Elena de Corrales, director of Multilateral Policy for Honduras; Gerardo Solis Sequeira, executive director of the Costa Rican Chamber of Pork Producers; Alexis Pineda Miranda, with the Ministry of Trade for Panama; Mauro Orellana, director of the Economic Section of La Prensa, a Honduran newspaper; Luis Enrizue Cardenas and Tatiana Ramirez, with the Ministry of Industry and Commerce, Venezuela, and Pablo Vasconez, president of the Ambato Chamber of Commerce in Ecuador.

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