Gov. Tim Walz is headed to Japan and South Korea this weekend, making his first international trip as governor to bolster ties with key economic partners in Asia as the U.S. trade war with China continues to stir fears of a global economic slowdown.
“I want to reassure them that their trading partners in the States, and certainly in our private sector businesses here in Minnesota, we’re prepared to do what we’ve always done. … There will be a day when these trade wars will end and we’ll come out on the other side,” Walz said.
Governors from across the Midwest and Japan will meet for a conference in Tokyo, where they will hear from corporate executives and politicians and take city tours. The business conclave also will feature some “speed dating” between businesses and state leaders, said Minnesota Department of Employment and Economic Development (DEED) Commissioner Steve Grove.
The decision to make Asia the focus of Walz’s first international trip sends a message against the backdrop of President Donald Trump’s trade wars, Grove said. “We want to reach out a hand to other countries,” he said. “And I think going to Asia first is a very specific decision and one that we don’t take lightly.”
After a few days at the Midwest U.S.-Japan Association Conference, Walz will stop in South Korea for a day. He said he will mostly be meeting with government officials there. Walz, a Democrat and former congressman, said he helped craft the agricultural side of the U.S.-Korea Free Trade Agreement and wants to reaffirm Minnesota’s commitment to that deal.
Eight state government officials are in the Minnesota delegation, including Walz and a policy aide, members of the Minnesota Trade Office, Grove and a couple of state troopers. The budget for the eight-person trip is $58,102, but DEED spokesman Shane Delaney said they don’t expect to spend the full amount. Of that, $11,000 will be covered by scholarships from businesses including Delta Air Lines and Dorsey and Whitney, and by Rice County, Delaney said. The rest will come from state coffers outside the general fund.
Executives from several Minnesota medical companies — Mayo Clinic, Boston Scientific, Heraeus — also are traveling to Japan, along with local government leaders from Faribault and Rice County, Delaney said. Medical and optical exports from Minnesota have seen an uptick in the second quarter of 2019 compared to the same period last year, according to a newly released DEED report. Exports of those products to Japan were up $127 million and up $113 million for South Korea.
But overall, the DEED report documents a slump in trade, citing retaliatory countermeasures by trading partners.
Japan is Minnesota’s fourth-largest trading partner, and about 35 Japanese businesses are operating in the state. Exports to the country totaled $1.5 billion last year, and exports to South Korea were $1 billion.
“It takes a little bit of time, but I hope we have some deliverables where we’re getting ... real commitments of investments back in Minnesota. Either in terms of job creation in Minnesota or export opportunities,” Walz said, noting that Tokyo-headquartered printing company Toppan Merrill recently expanded in Sartell.
Strengthening the state’s trade with countries like Japan and South Korea is particularly important given uncertainty around trade with China. The U.S. and China agreed this week to resume trade talks soon, but Minnesota farmers and retailers have been struggling with the impact of lost exports and new tariffs. China was the second-largest importer of Minnesota goods in 2018, after Canada, and received $2.8 billion in Minnesota exports, according to DEED data.
Whether Walz can boost the state’s business prospects in Asia remains to be seen. Past studies on the effectiveness of such trade trips by governors have been “pretty inconclusive,” said Robert Kudrle, an international trade and investment policy professor at the University of Minnesota’s Humphrey School of Public Affairs. But he said Walz’s experience as a member of Congress could increase his impact.
“This state has a lot to sell,” Kudrle said. Minnesota also could stand to lose out on business opportunities if it doesn’t participate in events like this, when governors from Wisconsin, Ohio, Illinois and across the region will be there. “If other people are doing it, you better be doing it yourself,” Kudrle said.
Trade missions have become a regular part of elevating the state’s international profile. Walz’s predecessor, Mark Dayton, led several overseas trips, including stops in Japan and South Korea. His predecessors Tim Pawlenty, Jesse Ventura and Arne Carlson led a combined 27 international trade missions, including Ventura’s historic 2002 trip to Cuba.
Walz departed for Japan on Friday and said he will spend much of the trip meeting with businesses now operating in Minnesota. However, the conference schedule says the governors will spend much of Sunday on a Tokyo Bay cruise, where they will see Olympic sites and take a “sumo tour” to a sports stadium. That afternoon the U.S. and Japanese governors have an off-the-record discussion of politics, the economy and the upcoming Olympics.
The next two days involve a series of speeches and panels, as well as networking. Speakers will include U.S. and Japanese business executives from Dow Chemical, Toyota, United Airlines and other companies. All of the Japanese and U.S. governors at the conference, as well as all of the scheduled panelists, keynote speakers and moderators, will be men. Organizers could not be reached for comment Friday on the gender imbalance.
The topics they will discuss are: “Mutual Success Through Cooperation,” “Cutting-Edge Technologies for Growth” and “Expanding Trade & Investment.”