BILL ANALYSIS Ó
SCR 6
Page 1
Date of Hearing: June 23, 2015
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY
Eduardo Garcia, Chair
SCR
6 (Monning) - As Introduced January 12, 2015
SENATE VOTE: 33-0
SUBJECT: Santa Fe, Argentina: sister state relationship
SUMMARY: Memorializes the intent and commitment of the California
Legislature to formalize a sister state relationship with the Province
of Santa Fe, Argentina, for the purpose of encouraging and facilitating
social, economic, scientific, educational, and cultural exchanges that
further promote the prosperity of both regions and to improve the
international understanding and goodwill between both regions. Upon
adoption, the Secretary of the Senate is to transmit copies of the
resolution to the author for distribution.
FISCAL EFFECT: None
POLICY ISSUE FRAME
This resolution proposes the commitment of the Legislature to establish
a sister state relationship between California and the Province of
Santa Fe, Argentina.
SCR 6
Page 2
A sister state relationship is a formal declaration between two
regions, states, or nations. Such an agreement is a symbol of mutual
goodwill. Additionally, it is an effort to encourage and facilitate
mutually beneficial social, economic, educational, and cultural
exchanges. Both the Legislative and the Administrative branches of
government have the authority to establish sister state relationships.
The California Senate has had an ongoing exchange over a decade with
both the government of the Province of Santa Fe and a Santa Fe-based
foundation whose mission is to promote civic awareness and democracy,
the Fundación Nueva Generación Argentina (FNGA).
The California Senate has sent official delegations to Argentina in
2004, 2007, and 2010. The FNGA has sponsored delegations to California
in 2005, 2007, and 2012. Among other non-government meetings, the FNGA
meets with California business and trade related organizations
including the California Chamber of Commerce. Another round of
meetings is planned for 2015/2016. According to the author, SCR 6
would build on these relationships in formalizing a sister state
relationship with the Province of Santa Fe.
COMMENTS:
1)Author's Purpose: According to the author's statement, "The State of
SCR 6
Page 3
California and the Province of Santa Fe have developed a strong
bilateral relationship over the last decade, bolstered through a
number of educational visits by official legislative delegations.
These reciprocal visits, including an upcoming delegation visit to
Argentina in fall of 2015, have provided leaders of both states an
opportunity to share knowledge and ideas, as well as establish
meaningful relationships that promote goodwill and partnership
between both regions.
California and Santa Fe have strong economic ties rooted in their
agricultural sectors, and share important connections between their
public higher education institutions. SCR 6 will legislatively
recognize the important relationship that exists between these states
and will promote and create more opportunities for collaboration
between the regions, foster growth in trade, and encourage greater
cultural exchanges.
The California Legislature has already established a precedent of
recognizing special bonds between states through the passage of 26
official Sister State relationship resolutions. The Santa Fe Province
plans to enact a similar measure establishing a sister state
relationship, and SCR 6 will reciprocate the gesture and solidify the
political, economic, and cultural bond between our two regions."
2)Background on Argentina and the Santa Fe Province: Argentina is
located in South America, bordering the South Atlantic Ocean, between
Chile and Uruguay. The area became independent from Spain in 1816
with the dissolution of the United Provinces of the Rio Plata. It is
the eighth largest country in the world, second largest in South
America after Brazil, and is just under one-third the size of the
U.S.
SCR 6
Page 4
As of 2014, Argentina had a population of 43 million people, with a
median age of 31.2 years. Youth between the ages of 15-24 have
reached a record high proportion of the population (15.7%),
contributing to a growing labor force in the short run.
Buenos Aires is the capital and the largest urban center in
Argentina, with 13.5 million inhabitants. Other large urban areas
include Cordoba (1.5 million population), Rosario (1.2 million
population), Mendoza (917,000 population), and San Miguel de Tucuman
(831,000 population) (2011).
According to the CIA Fact Book, Argentina suffers from a range of
environmental problems typical of an industrializing economy such as
deforestation, soil degradation, desertification, air pollution, and
water pollution. The country, however, is a world leader in setting
voluntary greenhouse gas targets.
Argentina's economy is one of the largest in Latin America; currently
ranked 26th in the world, with a 2014 GDP (purchasing power parity)
of $927.4 billion, and a real growth rate of -1.7% from 2013-2014.
Argentina benefits from an abundance of natural resources, a highly
literate population, an export-oriented agricultural sector, and
SCR 6
Page 5
diversified industry. In 2014, Argentina exported $76.47 billion in
goods and imported $1 Billion in goods. The country's top trade
partners include: Brazil, China, U.S., Germany, and Chile. Today,
more than 500 U.S. companies are among the top investors in
Argentina, with nearly $15 billion worth of investments.
Of the 23 provinces in Argentina, the Province of Santa Fe has one of
the most significant economies, accounting for nearly 10% of the
nation's output. More than 20% of the cultivated lands of Argentina
are in Santa Fe, whose main crops include soybeans, sunflowers,
maize, wheat, and rice. In addition, the Province of Santa Fe is home
to 20% of the nation's livestock in meat and dairy.
The U.S. is Argentina's third-largest trading partner. In 2014,
exports from California ranked 8th in the nation. Merchandise
exported from California to Argentina in 2014 totaled $333 million,
down 11.9% from $378 million exported in 2013. Argentina is
California's 45th largest export destination, after Denmark and South
Africa.
In 2014, the top 5 major California exports to Argentina included:
Computer and Electronic Products ($130 million), Chemicals ($88.2
million), Machinery, except electrical ($35.4 million), Misc.
Manufactured Commodities ($21.2 million), and Agricultural Products
($16.5 million).
SCR 6
Page 6
California and the Province of Santa Fe, Argentina have an ongoing
reciprocal exchange program, which began in 2004 between the
California Senate International Relations Foundation and the FNGA.
The goal of their activities is to increase the governments'
political and economic ties, and increase the discussion of specific
public policy issues including sustainable energy, port security,
goods movement, and public safety.
3)Origins of Sister Programs: U.S. sister affiliations began shortly
after WWII and developed into a national initiative when President
Dwight D. Eisenhower proposed the people-to-people program at a White
House Conference in 1956. According to research on Maryland's Sister
State webpage, President Eisenhower's intention was to involve people
and organized groups at all levels of society in personal, citizen
diplomacy with the hope that people-to-people relationships, fostered
through sister city affiliations, would lessen the chance of future
world conflicts. Many sister city relationships are coordinated
through the nonprofit network, Sister Cities International.
4)Sister State Programs: States differ in their approach to selecting
and implementing sister state relationships. Some states, such as
Hawaii, require a detailed application from the foreign state wishing
to enter into partnership. The application form includes information
on prospective partner's economic structure, cultural resources,
primary industries and foreign trade and investment. Applications
are reviewed by the Hawaiian Governor, who refers applications he or
she supports for further review by the Legislature. The Legislature
expresses their approval through the adoption of a concurrent
resolution authorizing the Governor to proceed in negotiating a
sister state agreement with the applicant state.
SCR 6
Page 7
One recurrent model for managing the sister state relationship is the
establishment or designation of a sister organization. Iowa, for
example, has Iowa Sister State, a non-profit, volunteer organization
whose mission is to "develop and implement international programs
that promote the interests of the State of Iowa and its citizens."
Activities for each of Iowa's nine sister state relationships is
coordinated through a special committee, which organizes events and
exchanges.
Several states have information on their webpages regarding
longstanding sister state relationships. Michigan, as an example,
has had a sister state relationship with Shiga Prefecture, Japan,
since 1968, and stills hosts several exchanges per year. For the
40th Anniversary of the sister state relationship between HyMgo
Prefecture, Japan, and Washington state, the two governor's attended
several special events including "Kobe Day" at a Seattle Mariner's
Game, with 260 delegates from HyMgo and Governor Toshizo Ido throwing
the first pitch.
Another core component of sister state relationships is education.
Michigan and other states often emphasize educational exchanges, as
well as cultural exchanges. South Carolina even offers fee waivers
to foreign students from their sister state who wish to attend public
universities.
Many sister state relationships also include economic and business
development priorities, as well as cultural and educational
SCR 6
Page 8
exchanges. The Alberta, Canada, and Jalisco, Mexico, sister state
relationship focuses on enhancing the economic cooperation between
the two regions. The Albert-Jalisco sister state relationship is
guided by the initial and 13 supplemental agreements including
agreements that support joint research funding on micro and
nanotechnology, e-heath, radio-frequency identification and
multimedia; and value added food processing.
California has no formal structure for establishing, negotiating, or
maintaining sister state relationships. This resolution contains no
provisions to track the development of a sister state agreement or be
informed on future sister state activities between California and the
Province of Santa Fe.
5)Offices of International Relations: Both the Assembly and the Senate
maintain respective offices that serve as the key point of contact
for foreign relations and protocol for each House. The California
Senate Office of International Relations (SOIR) was established in
1987 and the Assembly Office of International Relations and Protocol
(AOIRP) was established in 2000. Through these offices Legislators
find assistance in furthering strong economic and diplomatic ties
between California and the rest of the world. Both SOIR and AOIRP
host international delegations at the State Capitol, as well as
facilitate and occasionally host Member-delegations to foreign
countries. Over the years, SOIR has also established special and
longer term relationships between California and foreign countries
including the California Brazil Partnership and the California and
Japan Scholars Program.
SOIR additionally maintains a website, which is the only known source
SCR 6
Page 9
for identifying sister state resolutions the California Legislature
has approved. According to the website, the Legislature passed 26
resolutions expressing an interest in establishing an sister
state/friendship state relationship including resolutions related to
State of Baja California Sur, Mexico; Archipelago of the Azores,
Portugal; and Catalonia, Spain. Neither SOIR nor AOIRP have any
specific mandated duties in regards to sister state relationships.
6)California Trade-Related Activities: California's economy benefits
significantly from trade and foreign investment. If California were
a country, it would be the 31st largest exporter and the 15th largest
importer in the world. Merchandise exports from California ($174
billion) accounted for over 10.7% of total U.S. exports in goods,
shipping to over 220 foreign destinations in 2014. California's
land, sea, and air ports of entry served as key international
commercial gateways for the $577 billion in products entering and
exiting the U.S. in 2014. Statewide, 4.4 million California jobs are
dependent on foreign trade. Over 562,700 California workers benefit
from jobs with foreign-owned firms, which accounts for 5.1% of all
private sector jobs in the state.
California's importance within the global marketplace results from a
variety of factors, including: its strategic southwest and coastal
location offering direct access to growing foreign markets in Mexico,
Latin America, and Asia; its nine diverse regional economies; its
large, ethnically diverse population, representing both a ready
workforce and significant consumer base; its access to a wide variety
of venture and other private capital; its broad base of small- and
medium-sized businesses; and its culture of innovation and
entrepreneurship, particularly in the area of high technology.
SCR 6
Page 10
Mexico has been California's top trading partner since 1999 and, in
2014, California exported $25.4 billion (14.5%) in goods. The chart
shows export data on the state's top five trade partners. Other
top-ranking export destinations not shown on the chart include the
Netherlands and the United Kingdom.
-----------------------------------------------------------------
| California Exports 2011 to 2014 (billions of dollars) |
-----------------------------------------------------------------
|---+-----------+-----------+-----------+-----------+-----------|
| | Partner | 2011 | 2012 | 2013 | 2014 |
|---+-----------+-----------+-----------+-----------+-----------|
| |World | 159.4 | 161.7 | 168.0 | 174.1 |
|---+-----------+-----------+-----------+-----------+-----------|
|1 |Mexico | 25.8 | 26.3 | 23.9 | 25.4 |
|---+-----------+-----------+-----------+-----------+-----------|
|2 |Canada | 17.2 | 17.4 | 18.8 | 18.2 |
|---+-----------+-----------+-----------+-----------+-----------|
|3 |China | 14.2 | 13.9 | 16.2 | 16.0 |
|---+-----------+-----------+-----------+-----------+-----------|
|4 |Japan | 13.1 | 13.0 | 12.7 | 12.2 |
|---+-----------+-----------+-----------+-----------+-----------|
|5 |South | 8.4 | 8.2 | 8.3 | 8.5 |
| |Korea | | | | |
|---+-----------+-----------+-----------+-----------+-----------|
|6 |Hong Kong | 7.6 | 7.8 | 7.7 | 8.5 |
|---+-----------+-----------+-----------+-----------+-----------|
|7 |Taiwan | 6.2 | 6.3 | 7.5 | 7.4 |
|---+-----------+-----------+-----------+-----------+-----------|
|8 |Germany | 5.3 | 4.9 | 5.5 | 5.4 |
---------------------------------------------------------------
-----------------------------------------------------------------
SCR 6
Page 11
|International Trade Administration, accessed |
|4/11/2015 |
-----------------------------------------------------------------
California's largest industry sector by employment is Trade,
Transportation, and Utilities, which encompasses everything from
major retail outlets, to import-export businesses, to transportation
and warehousing. California leads the nation in export-related jobs.
The U.S. Department of Commerce estimates that for every one million
dollars of increased trade activity, 11 new jobs are supported.
Workers in trade-related jobs earn on average 13% to 28% higher wages
than the national average.
In today's globally linked economy, manufacturing utilizes products
from across the U.S., as well as from other nations. In 2012, 61%
($1.3 trillion) of the products imported into the U.S. were inputs
and components intended for use by American producers. In addition,
U.S. imports often include components or benefit from services
provided by U.S. firms, including many California companies. The
Wilson Center estimates that Mexican imports and Canadian imports
contain 40% and 20% of U.S. components, respectively.
Trade and foreign investment support new job creation, bring new
technologies and skills to California workers, generate local and
state revenues, and generally strengthen the state's economic base.
In the future, California's economy will become increasingly reliant
on accessing foreign markets where a majority of global economic
growth is expected to occur.
SCR 6
Page 12
7)Related Legislation: Below is a list of bills from the current and
prior sessions.
a) ACR 100 (Alejo) Relations with El Salvador: This bill
memorializes the Legislature's commitment to work cooperatively
with the Governor's Office of Business and Economic Development on
trade promotion and foreign investment activities that enhance the
state's economic relations with El Salvador, as specified.
Status: Adopted by the Legislature, Resolution 172, Statutes of
2014.
b) SCR 82 (Hueso) Jalisco, Mexico: Sister State Relationship:
This bill memorializes the Legislature's desire to recommit to the
formalizing of a sister state relationship between California and
the State of Jalisco, Mexico, for the purpose of promoting
economic growth and well-being of small, medium, and large
corporations and by increasing their potential trade and
investment within the State of Jalisco. Status: Adopted by the
Legislature, Resolution 70, Statues of 2014.
REGISTERED SUPPORT / OPPOSITION:
Support - American Federation of State, County, and Municipal Employees
Opposition - None received
SCR 6
Page 13
Analysis Prepared by:Toni Symonds / J., E.D., & E. / (916)
319-2090