Connecting state and local government leaders
The state executives are often seeking foreign direct investment and cutting trade deals, though they’re admittedly no substitute for presidential leadership.
WASHINGTON — Governors are gaining international clout while President Trump tweets of trade wars.
But the so-called “new ambassadors” are careful not to couch the dynamic as a dramatic shift in how the U.S. conducts foreign relations.
And the organization’s winter meeting in the nation's capital later that month saw Australian Prime Minister Malcolm Turnbull promoting the very Trans-Pacific Partnership that Trump withdrew the U.S. from negotiations over in January 2017. Ghanian President Nana Akufo-Addo also addressed the group, the first African leader to do so in NGA's history, on a skilled workforce and other issues.
“I would say there’s no other time in recent history that governors have mattered as much as we do now,” Rhode Island Gov. Gina Raimondo told reporters ahead of Turnbull’s speech. “We are living through an unprecedented period of inaction, political gridlock in Washington like we’ve never seen, and that means the responsibility is falling to governors to take action to help the American people keep up and get ahead in this economy.”
Trump had a different take when he met with the governors Monday.
The president called for “fair and reciprocal trade deals,” arguing Mexico, with its 16 percent value-added tax, was costing the U.S. about $130 billion a year and China $504 billion.
“You, as governors, are not being treated fairly, and when I get too tough with the country you’re always calling, ‘Oh, gee, don’t do that,’ Trump said. “But I must say, it’s more senators and congressmen and women that call; you haven’t been calling so much. You want to see great deals.”
By Friday, Trump was contemplating a trade war.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
Turnbull warned against exactly that thinking in his speech to the governors.
“I think the challenge for us as political leaders is to ensure that the easy lure of protectionism doesn’t overtake us,” Turnbull said. “I think you have to just make the case that more trade means more jobs, more investments, more exports.”
Free trade agreements like the TPP help on that front, Turnbull added. So while he respected Trump honoring a campaign pledge in withdrawing, he’s “determined to keep that project alive.”
TPP-11 will be signed in Santiago, Chile on March 8 and includes an option for the U.S. to return in the future—a prospect Trump said he’s open to.
“There’s always an opportunity there, and I’m obviously going to defer to the president to make that decision,” Nevada Gov. Brian Sandoval, who chairs NGA, told reporters at the winter meeting.
South Dakota Gov. Dennis Daugaard said governors were more concerned with the North American Free Trade Agreement, which could be undermined by Trump’s plan to place a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports. A seventh round of NAFTA talks, which the Trump administration pushed for, is ongoing.
Both Daugaard and Raimondo were open to changes to the trade pact but didn’t want to see it scrapped.
“South Dakota’s an agriculture state, and we want to be sure the trade that we enjoy with Canada and Mexico of our agriculture products, which is very important to us, can continue,” Daugaard said.
But Trump believes protectionism works, on Jan. 22 imposing hefty tariffs on washing machine and solar energy cell imports mostly coming from China, the world’s largest solar producer.
The president defended the move to the governors, saying it would reverse a trend of U.S. solar panel plant closures, but large-scale solar farm developers and power purchasers fear an uptick in costs and downturn in adoption.
“The president’s trade policy has come into clarity, and it’s brain-dead,” Washington Gov. Jay Inslee told reporters at NGA’s meeting. “And I’ll tell you why: On this solar industry situation he set a tariff that is high enough to kill the installation part of the industry, which is about 70 percent of the industry, and low enough not to help any of the cell manufacturers.”
Inslee added the “incompetent” decision would cost 24,000 solar jobs across the U.S., including in Washington State.
Governors are in the business of courting international companies, like those in renewable energy, for the jobs and employees they bring to their respective states. Raimondo used NGA’s meeting to meet with a delegation from China on economic development, while Michigan Gov. Rick Snyder was at the Invest in America! Summit in D.C. on Tuesday touting Detroit’s comeback to foreign investors.
Another question I receive a lot is about #Detroit, our #comebackcity! I’ve told everyone in DC it’s so amazing they just have to see it for themselves. A lot of interest in the city today from investment delegations from Korea and China at the Invest in America Summit https://t.co/0h8ga4ZJeI— Governor Rick Snyder (@onetoughnerd) February 27, 2018
NGA has witnessed growing interest from international and subnational governments in gaining access to governors, sharing innovations and even funding state projects.
On May 4, U.S. governors will meet with their counterparts from Mexico and Canada in Phoenix to talk supply-side logistics, with NGA Global planning everything from traditional trade missions to leadership exchanges with Japan.
“It’s the governors that are often making the trade deals,” Tiffany Shackelford, NGA Office of Communications chief strategic officer, told Route Fifty. “They are often the ones looking for direct investment in their states.”
Governors supplement the federal government in improving foreign relationships and information sharing, Shackelford added.
Australia sending its largest-ever political and business delegation to NGA was part of that, with Turnbull and four premiers, the country’s equivalent to governors, encouraging greater U.S. involvement in the Indo-Pacific region.
“The political leadership in America in the years ahead will come not exclusively from the leadership of Congress,” Australian Ambassador to the U.S. Joe Hockey told Route Fifty on a press call prior to Turnbull’s visit. “It’s going to come from the broad reach of the American polity.”
The president to prime minister connection will remain the backbone for relations between the two countries, Hockey added. But he also said that these days relationships “have to be broader, and they have to be inclusive rather than exclusive.”
Governors figure to be a bigger part of diplomacy with countries like Australia moving forward, but they’re the first to admit they’re not looking to take the place of the president.
“It would be a real shame if it came to that because—international policy, trade policy, foreign diplomacy—those rest with the president and his Cabinet, and that’s probably the hardest area for any governor or coalition of governors to make up for efficiency in national leadership,” Raimondo told Route Fifty. “So I think all of us will do what we can in terms of individual trade missions, but that’s a hard one.”
Dave Nyczepir is a News Editor at Government Executive's Route Fifty and is based in Washington, D.C.