This trade mission is about jobs, jobs, jobs

AGRA, INDIA - As crowds swirled past, Gov. Tim Pawlenty lay on the ground to capture just the right photo of the Taj Mahal's crisp white spires Sunday before climbing back into his tour bus to begin a dash across India, his fourth international trade mission and his seventh overseas effort since taking office nearly six years ago.

For Pawlenty, the trip, which will also take him to New Delhi, Mumbai and Bangalore, comes against the backdrop of a slipping job market in Minnesota that has put the state behind the national average for joblessness for the first time since statisticians started keeping track decades ago.

That slippage is putting a premium on opening new markets for Minnesota goods and services -- and on the Minnesota governor's diplomatic skills, considered one of his strengths.

The sightseeing stop at the Taj Mahal wasn't part of Pawlenty's original itinerary.

Only after complaints from delegates did Pawlenty and his staff acquiesce to the stop as a bit of tourism in a trip that former Michigan Gov. John Engler said promises to be "a forced march."

Part of Pawlenty's first day in India turned out to be a "forced halt." In a demonstration unrelated to the trade visit, thousands of Indians shut down the highway back to the delegation's New Delhi hotel and turned a drive that's normally four hours into seven. Toyotas, Hyundais and a sea of overstuffed trucks honked incessantly and battled for road space with sacred cows, camels, carts and even elephants. Rock star Mick Jagger showed up at the Taj Mahal to add even more color to a surreal day.

Global trade missions are increasingly popular economic development tools among governors, and India is increasingly on their radar.

Pawlenty's visit comes after trips by the governors of Virginia and Iowa. Utah's governor and California Gov. Arnold Schwarzenegger will visit India next week and next year, respectively.

Frank Vargo, international economist for the National Association of Manufacturers, called Pawlenty's trip "very well-timed."India is just cutting its trade barriers now," he said. "So Indian companies are more interested than ever in buying foreign products. India is becoming less protectionist, and the markets are growing. It's a hugely important mission."

Globe-trotting governor

Bob Kudrle, professor of international trade and investment policy at the Humphrey Institute of Public Affairs at the University of Minnesota, said Pawlenty "is a very, very serious person. And he makes a very good impression, and a very good diplomat."

The governor has been a regular traveler, having led trade missions to China, Canada, Poland and the Czech Republic, as well as having made trips to Kosovo, Bosnia-Herzegovina and Iraq in support of U.S. troops.

His 2004 missions to Poland and the Czech Republic didn't lift those nations onto Minnesota's list of top 25 trading partners, despite hopes for sizable construction and equipment contracts. But the trips to China and Canada are considered major successes.

Minnesota exports to Canada have grown more than 14 percent, to $3.6 billion in the past year alone. The mission to China in 2005 is seen as the benchmark against which other trade missions will be judged. Since the governor's visit with 218 delegates to Beijing, Shanghai and Hong Kong, China has risen from fourth to second on Minnesota's list of trading partners. China now imports $1.2 billion of Minnesota goods, up from $820 million in 2004, behind only Canada.

But it's also clear that the growth in trade with China and Canada is the result of larger factors than the governor's efforts.

Kudrle points out that the fall in the value of the dollar, Canada's proximity to Minnesota, rising U.S. pharmaceutical prices and a host of other factors account for much of the increased trade. "Believe me, the Canadians kind of know who you are in Minnesota, with or without a trade mission," he said.

And Minnesota companies were already working hard to boost their Chinese sales before Pawlenty went there.

Keeping it real

Minnesota trade executive director Tony Lorusso and Pawlenty are modest in assessing the impact of their efforts to boost trade.

"Let us be honest with ourselves about these missions," Lorusso said. "I don't think any of us ever try to position them as if they are going to help you immediately close the deal, or immediately spike exports. That is our long-term goal. We have a larger vision, of ensuring that Minnesotans see the value of participating in the global economy."

Before leaving for Asia last week, Pawlenty conceded, "I think we would be less than accurate if we said these trade missions contributed to all of [the trade growth] or some substantial portion.

"I think we helped a bit," he added, holding his thumb and index finger slightly apart.

"These trade missions are significant. I don't mean to understate it," he said. "They do add value. But when you look at [Minnesota's] 380 percent increase in trade to India since the turn of this decade and a similar percentage for China, there are a lot of factors that go into it."

That said, most trade experts believe that such trips (the India mission will cost about $6,400 per person, with 15 state workers also going) are well worth it.

"You have to measure the amount of investment coming into Minnesota [after the trip]," Briggs and Morgan attorney David Rosedahl said.

Rosedahl spent February consulting with India's Ministry of Finance in Mumbai concerning U.S. capital investment opportunities.

"Say this year we have $50 million coming in from India and then $150 million more coming in next year. Then the $100,000 or $200,000 cost to the state just doesn't seem like an awful lot," he said.

Kudrle said the diplomatic function the governor serves in going overseas is intangible, but real. "Most business is done by businesspeople for business reasons, and the governor's role is largely the laying on of hands. It's great diplomacy for the state if he makes a good impression, which I believe Governor Pawlenty does," he said.

Engler, the former Michigan governor who is now CEO of the National Association of Manufacturers, said most governors have focused on Europe until the past few years. He praised Pawlenty's recent focus on Asia, given its growing economic strength.

"As governor, you really are the chief economic development agent for the state," Engler said. "People really want to know what is going on with the person in charge. ... That is a region of the world that values, even more than other parts of the world, personal relationships. ... It's not important just that the economics look good. It's, 'Do I have a relationship with somebody?'"

Rep. Erik Paulsen, R-Eden Prairie, who joined this week's mission despite having just returned from a trip to China and India's New Delhi region, agreed that the business matchmaking sessions are invaluable.

"You are dealing with different cultures, where you really do have to sit down and build personal relationships. You can't just do it over the phone," Paulsen said.

Dee DePass • 612-673-7725

Dee DePass • ddepass@startribune.com