BILL ANALYSIS �
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ASSEMBLY THIRD READING
ACR 100 (Alejo)
As Amended June 4, 2014
Majority vote
ECONOMIC DEVELOPMENT 8-0
APPROPRIATIONS 14-0
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|Ayes:|Medina, Daly, Fong, Fox, |Ayes:|Gatto, Bigelow, |
| |Linder, Melendez, V. | |Bocanegra, Bradford, Ian |
| |Manuel P�rez, Brown | |Calderon, Eggman, Gomez, |
| | | |Holden, Linder, Pan, |
| | | |Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Memorializes the Legislature's commitment to work
cooperatively with the Governor's Office of Business and
Economic Development (GO-Biz) on trade promotion and foreign
investment activities that enhance the state's economic
relations with El Salvador, as specified. Specifically, this
resolution :
1)Makes statements regarding California and El Salvador's
cultural and economic ties. Among other things:
a) Salvadoran Americans represent the second largest Latino
community in California, numbering over one million people;
b) The United States (U.S.) enjoyed a trade surplus with El
Salvador of $731 million in 2013;
c) President Barack Obama initiated a policy directive on
global development in 2010, which identified El Salvador as
one of four select countries chosen for increased foreign
investment based on their track record for partnering with
the U.S., past policy performance, and the potential for
continued economic growth; and
d) The California Legislature recognizes the potential for
mutually beneficial economic gains resulting from increased
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trade and foreign investment with Salvadoran businesses and
encourages trade-related exchanges, including, but not
limited to:
i) Supporting economic development activities of the
Salvadoran foreign consulate in California to establish
new business and investment partnerships;
ii) The value of developing a series of export-related
seminars/webinars on best exporting practices and
utilizing GO-Biz to undertake and facilitate these
activities;
iii) Hosting incoming Salvadoran delegations in order to
promote California products and services;
iv) Facilitating trade missions to El Salvador to
promote California products and services within
prioritized industries.
2)Resolves that the Legislature of the State of California, in
coordination with GO-Biz, shall work to develop and implement
trade promotion and foreign investment activities that enhance
trade relations with El Salvador. These trade and investment
promotion activities shall be undertaken in partnership with
the government of El Salvador and the Salvadoran business
community.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, to the extent GO-BIZ develops comprehensive trade
promotion and foreign investment activities, this resolution
could result in unknown General Fund administrative costs to
GO-BIZ in the thousands of dollars.
COMMENTS : This resolution highlights the economic opportunities
of a stronger trade relationship between California and El
Salvador. The resolution further expresses the Legislature's
interest in supporting administration lead activities, as well
as taking its own actions to increase trade and foreign
investment between the state and El Salvador. The resolution is
consistent with the 2014 California Trade and Foreign Investment
Strategy released by GO-Biz in February 2014.
The policy analysis includes additional information on U.S.
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trade agreements, El Salvador, and California's trade economy.
U.S. Trade Agreements: Within a globally connected economy,
trade agreements create the framework by which a significant
number of businesses and workers must compete, collaborate, and
create economic value. The U.S. is currently negotiating two
major trade promotion agreements, the Trans-Pacific Partnership
and the Transatlantic Trade and Investment Partnership. In
their current iterations, these trade agreements will cover 21%
of the world's population, with the U.S. at the nexus. These
agreements are especially important to local and regional
governments which have been proactive in using trade promotion
activities as a springboard for their own economic agenda.
The U.S. has trade agreements in force with 20 countries. El
Salvador is covered under the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR) which also
includes Guatemala, Honduras, Nicaragua, the Dominican Republic,
and Costa Rica. As a result of this agreement, 100% of U.S.
exports of consumer and industrial goods to the CAFTA-DR
countries will be tariff-free by 2015. Tariffs on nearly all
U.S. agricultural products will be phased out by 2020. The
CAFTA-DR region was the 14th largest U.S. export market in the
world in 2013, and the third largest in Latin America behind
Mexico and Brazil.
Background on El Salvador: El Salvador is the smallest and most
densely populated country in Central America. Located on the
Pacific Ocean side of Central America, between Guatemala and
Honduras. El Salvador is led by President Salvador S�nchez
Cer�n and a Council of Ministers selected by the president.
They have a unicameral 84-seat Legislative Assembly, which is
elected to serve three-year terms.
In 2013, El Salvador's gross domestic product (GDP) was $47.4
billion, making it the 99th largest economy in the world. Since
the economic contraction due to the global recession, growth has
been averaging less than 2% from 2010 to 2013. Remittances
accounted for 16% of GDP in 2013 and were received by about a
third of all households. Top preforming industries include:
food processing, beverages, petroleum, chemicals, fertilizer,
textiles, furniture, and light metals. The U.S. dollar is used
as a medium of exchange, which encourages U.S. import and export
of goods and services. In 2013, the U.S. had a $731 million
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trade surplus with El Salvador.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN:
0003936