Governors Urge Steps to Raise US Trade Competitiveness

AMERICA'S governors say it is time for the United States to bring back the spirit of the Yankee trader, who once blazed new openings in worldwide markets from Japan to Europe. Rapid changes in the global economy of the 1990s will force Americans to work harder, smarter, and faster, the governors say. It will require major changes in the way Americans train workers, educate their children, and compete for business.

In a year-long study of America's world-trade problems, the nation's 50 governors found that the US has lost its preeminence with shocking speed.

After being No. 1 for years, the US has watched its trade surplus change into a $118 billion trade deficit. US manufacturing wages, once the world's highest, now trail West Germany, France, and Italy. Real earnings of US workers have dropped 17 percent in the past 15 years.

``We cannot take things for granted,'' warns Virginia Gov. Gerald Baliles, chairman of the National Governors' Association. ``We cannot rest upon our past accomplishments. We must be willing to invest the time and resources to be competitive.''

Mr. Baliles, a Democrat, was interviewed by the Monitor at his office in Virginia's historic State Capitol.

``We must change our attitudes,'' he says. ``What happens in distant places can affect our economy, can have an impact on our jobs, can impinge upon the social stability of [our] nation.''

The National Governors' Conference, meeting this week in Chicago to discuss the trade issue, proposes several steps to meet foreign competition. Although some politicians blame foreign economic barriers for US trade problems, Baliles says its most important trade problems have their roots right at home.

``There are markets out there that are open and are available to be filled, and we are not responding to the challenge and meeting those market needs,'' he says.

Baliles practices what he preaches, the most notable example being the locally famous story about chicken feet.

Two years ago, while traveling in the Far East, the governor noticed that Asians consider chicken feet to be a delicacy - deep-fried as hors d'oeuvres or boiled in soup. In Virginia, a chicken-processing state, the feet were thrown away.

Today, at Baliles's urging, Virginia exports 40 tons of chicken feet per month to Asia. A throw-away became a profitmaker.

Baliles has also courted direct foreign investment in Virginia. The state now has 119 foreign companies operating here with 28,000 employees. Since Baliles took office three years ago, foreign firms have pumped $651 million into the state's economy.

Meanwhile, rising exports of machinery, transportation equipment, livestock, and electrical equipment from Virginia are estimated to be responsible for 25 percent of the state's recent economic growth.

But Virginia and other states still have a bumpy road ahead. Competition is growing. The governors recommend urgent action in six areas that could determine America's economic future. The areas are:

Children. Without healthy, strong workers in the future, America cannot compete. Yet America's infant mortality rate for white children ranks 19th of 30 developed nations. The black infant mortality rate ranks last in 30 nations that were studied.

The governors urge heavy investments in prenatal care to provide help ``when the family system fails.''

Education. Most Americans can't speak a foreign language, and many students can't identify major nations on a world map.

The governors want foreign language instruction to begin in the first grade. They would insist that every college graduate be proficient in a foreign language. And they would greatly expand student exposure to geography and foreign cultures.

Technology. America invents wonderful devices, such as the videorecorder and the silicon chip, but loses the battle to produce them for the marketplace.

The governors want more long-term support for research that has commercial potential, new partnerships between business and academia, more joint-technology agreements, more exploitation of foreign inventions, and a work force that is literate in technology.

Transportation. Traffic jams, decaying roads, aging bridges, and overcrowded airports are slowing American commerce.

The governors want more investments in transport, particularly highways, with user fees to pay the higher costs where necessary.

Domestic markets. American firms are losing market share right at home. For example, 95 percent of consumer electronics sold here are built abroad.

The US needs improvements across the board to get its home market back. That means greater access to capital, better technology, a more skillful work force.

Foreign markets. Forty years ago, America dominated world trade. Today, everything from autos to banking faces strong foreign competition.

The governors want to search out markets in every corner of the globe. But as the governors' report on trade puts it: ``You can't sell full-sized refrigerators to people who have closet-sized kitchens.'' America must understand foreign markets, then customize products to satisfy foreign consumers.