In a push to boost exports to Europe, Minnesota will open a trade office in Germany, the state’s fifth-largest trade partner.
Gov. Mark Dayton and Katie Clark Sieben announced the new office Wednesday during a trade mission to Germany, Sweden and Norway with representatives of 35 Minnesota businesses and education institutions. The office, in Düsseldorf, will be Minnesota’s second international trade office.
“We share many similar industries,” said Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development. “We have a focus on medical technology and medical device innovation, food processing and renewable energy.”
The Rhine and Ruhr river valleys have historically been the center of industry for Germany, and Düsseldorf is now a center for telecommunications, advertising and medical technology, with nearby operations for several Minnesota companies, including 3M, Cargill, Medtronic, Carlson, Ecolab and St. Jude Medical.
Düsseldorf lies amid one of Europe’s largest metropolitan areas, a zone that includes Dortmund, Essen, Cologne and the former capital of West Germany, Bonn.
While exports to Europe have stalled in recent years as the continent struggles with slow growth and crippling debt in nations such as Greece, Portugal and Spain, Germany’s economy has been strong. The country generated $728 million in sales with Minnesota in 2012.
Germany is also a major international source of foreign direct investment, ranking fifth in the world, the state said. German companies have invested $1.4 billion in plants, property and equipment in Minnesota and employ 9,000 Minnesotans.
The new trade office will also be aimed at drumming up business in neighboring countries. Belgium, the United Kingdom, the Netherlands, France, Ireland, Sweden and Finland are other European Union countries on the state’s top 25 export list. The European Union accounted for 20 percent of state exports last year, about $4 billion.
The state already has a trade office in Shanghai, China, which opened in 2005, and plans to open two more in locations to be determined. Dayton’s budget included $1.5 million in funding for the state to establish the new trade offices.
Dayton’s views on foreign trade offices have shifted since his campaign in 2010, when he said he would eliminate the Minnesota Trade Office to save $3 million, adding in a release: “I will not need a trade office to support my international trade junkets, aimed at improving my presidential gravitas,” a jab at then-Gov. Tim Pawlenty.
Now Dayton sees trade offices as a key way to promote Minnesota for foreign investment and connect Minnesota businesses with foreign customers. Dayton said Clark Sieben helped change his mind about satellite trade offices. He said it will take time to see results from the trade office in Germany.
“This one will need a decade to percolate these relationships,” he said.
Clark Sieben said the office in Düsseldorf will most likely open this fall. Exports of goods account for a little less than a tenth of Minnesota’s economic output, and Dayton has identified exporting as a key economic development goal. Last year, he announced the MSP Export Initiative, aimed at doubling Twin Cities exports by 2017.
To reach that goal, businesses in the metro area would have to increase exports at the brisk pace of nearly 15 percent per year, and so far they have not achieved that. Minnesota exports grew 1.2 percent in 2012.
One major German manufacturer, Geringhoff, last year announced a $20 million investment for a factory in St. Cloud that will create 100 jobs in its first phase. Dayton, Earl Potter III, the president of St. Cloud State University, and Diana Lawson, business school dean at St. Cloud State University, met with Geringhoff officials on Tuesday to thank them for opening the Minnesota factory, the company’s first in North America.