O’Malley’s trade trip to Asia: Was it worth it?

While Gov. Martin O’Malley’s recent trip showcased deals between Maryland companies and Asian businesses and governments, some question whether its expense and extent were justified.

“Could this have been accomplished with much less cost?” asked House Minority Leader Anthony J. O’Donnell (R-Dist. 29C) of Lusby.

In a report, O’Malley (D) refers to global competition, rather than local competition, as the “true competition” that states face in this economy.

“With many of Maryland’s top business leaders and educators among our delegation, we sent a strong message to companies in China, Korea and Vietnam that Maryland is the gateway to doing business in the U.S., particularly in the life sciences and high tech industries,” he said in a statement. “… I am confident that this mission will continue to open doors for new investments and help Maryland businesses navigate untapped opportunities to provide goods and services to some of the world’s fastest growing economies.”

But the Maryland Business for Responsive Government says it is concerned with a shifting focus from in-state business concerns to global ones.The group points to Moody’s Analytics ranking Maryland 32nd in the nation when it comes to economic outlook and Chief Executive Magazine ranking Maryland 37th when it comes to doing business.

“There is general agreement on the need for each state to participate in the global economy, and the Governor’s Asian economic development trip is a step in that direction,” Kimberly M. Burns, president of the group, wrote in a statement. “More importantly, with a special [legislative] session looming in the Fall is the need for fiscal responsibility, holding the line on taxes and improving our business climate here at home so we can compete both with neighboring states and in the global economy.”

O’Donnell and Minority Whip Jeannie Haddaway-Riccio (R-Dist. 37B) of Newcomb also expressed concerns through a letter to O’Malley.

“This was a very large delegation. We want to understand the cost,” O’Donnell said. ”At a time when Marylanders are struggling to pay their bills, we want to know the actual cost of the trip, and we’ve asked for that to be chronicled.”

The letter mentions the governor’s office reporting the trip cost about $100,000. State officials have said they are working to come up with a total cost. At his news conference Tuesday, O’Malley said he did not have the cost.

O’Donnell’s letter requests an accounting for the individual costs for the 27 government-related staff, as well as unnamed staff members and the security detail. Although O’Donnell said he expects the private-sector executives paid their own way, the letter also calls for reporting any taxpayer dollars used to cover them.

Experts say O’Malley’s presence was instrumental in fostering deals, even if some were prearranged.

“Just because the deals may be cut before doesn’t mean he’s not cutting more deals while there,” said Peter Morici, a business professor at the University of Maryland, College Park.

“There’s time and effort that goes into attracting these businesses,” said Morici, who acknowledged that he is often openly critical of lavish government spending, but O’Malley’s trip doesn’t fall into that category. “The cost is really just airfare.”

He said Asian government and business officials typically place a great deal lot of importance on a government presence went it comes to economic development, so a governor’s presence has an impact.

For example, BlueWing Environmental Solutions & Technologies’ deal with Vietnam Natural Resources and Environmental Corp. was facilitated by O’Malley’s support, said Kevin E. Hedge, CEO of the Ellicott City company.

Most business deals in Vietnam go through its government, said Peter Gourlay, president and founder of the Maryland-Asia Environmental Partnership.

“Having the [Vietnamese] government sign an agreement is huge,” he said. “Vietnam is one of the most vulnerable [nations] to climate and environmental issues, and that directly impacts their exports. … So the government is especially interested in BlueWing’s technology.”

Lin Hwang of J&R Seafood agreed that the governor’s presence lends credibility.

“Most emerging countries appreciate it very much,” Alexander M. Gordin said of a governor’s presence on a trade mission. Gordin is a trustee of the Princeton Council on World Affairs and international trade expert with the Broad Street Capital Group in New York.

The trade mission shortened Planned Systems International’s contract cycle by six months, saving the Columbia company thousands of dollars, CEO Terry Lin said. He said such contract negotiations can be especially difficult, so having a significant presence such as O’Malley’s was helpful.

Gordin said the governor’s presence sends a message that the U.S. sees global trade as especially important. He added that having the governor actually addressing the foreign groups also helps differentiate the state within the U.S. and helps other countries understand they are working with Maryland specifically.

“Maryland is in a great position to take advantage of this international post-recession-world,” Gordin said. “If the mission is followed through with actual activity, it will be very useful.”

He said such missions build long-term relationships and that nothing will ever replace face-to-face discussions when it comes to commerce.

“We can’t stop trying to attract businesses to Maryland just because things are tight,” Morici said. “We need to do this to compete. Other states are also attracting foreign investment.”

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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

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