AUGUSTA – Gov. John Baldacci considered canceling his participation in the trade mission to Canada this week. But he decided that with exports continuing to grow, he had to at least go to Toronto to help solidify trade with the state’s biggest trade partner.
“With all the budget cuts we are having to make with less revenues, I did not want to send the wrong message,” he said in an interview. “I am only going up for a day, and it is on my dime.”
Baldacci said he decided to pay his own expenses because of the importance of personal meetings with executives at such major companies as TD Banknorth that already have significant business ties to Maine and are considering further expansions.
“Canadian businesses are looking at investing billions of dollars in Maine,” he said. “There is some good news out there with the bad.”
Baldacci cited plans for wind power projects and the expansion of electricity distribution networks as examples of major investments.
“We need to do more with exports, and that is one reason for my visit,” he said.
Janine Cary, president of the Maine International Trade Center, said Maine exports were up 14 percent over 2007 through August of this year. She said that was good growth and close to the average of the New England states at 14.6 percent.
She said Canada is Maine’s largest trading partner with that nation importing approximately $900 million in goods and services from Maine in 2007. She said Maine is on track to top a billion dollars in exports to Canada this year.
Cary said Maine is also seeing double-digit increases in exports to Malaysia, South Korea, Belgium and Australia. All are among the state’s top 10 export markets. Among the 10, only Great Britain has a decrease, 9.8 percent, through August of this year.
“When I first worked for the trade center back in 2000, 70 to 80 percent of the calls were from companies seeking help importing something they needed,” she said. “Now it is almost the reverse with 60 or 70 percent of the calls asking about exporting.”
At their meeting last month, the chairman of the Consensus Economic Forecasting Commission, University of Southern Maine economics professor Charles Colgan, said the growth in exports was a significant factor in Maine’s economic growth in the first part of 2008.
“The big question that I don’t think anyone can answer is how much of that was the weak dollar and how will that change now,” he said.
Many investors have pulled their cash out of the stock market and invested it in U.S. government securities. Many foreign investors have converted their cash into dollars and the strength of the dollar compared with other currencies has soared.
“That will certainly have an impact on some export markets, but not all,” Cary said. “I think that on some companies exporting from Maine, it will have no impact.”
She said much of the total exports to Canada are raw materials, principally wood and raw fish. She said she is encouraged that some Maine companies are exploring developing processing facilities in state.
“Governor [Angus)] King had it right when he said we should not ship a fish out of state with its head on, ” said Department of Economic and Community Development Commissioner John Richardson. “We need to focus more on exporting finished products as part of developing our economy.”
He acknowledged that in the current recession, many companies are delaying investments, but he believes some are seizing the opportunity to enter new markets, both domestic and foreign. Baldacci agrees.
“I have some companies telling me they are investing now because they want to get ahead of their competitors,” the governor said. “And that includes exporting more and to new markets.”
The weeklong trade mission started over the weekend and concludes with meetings in Toronto through the end of this week, including Baldacci’s series of meetings with company executives. He expects to conclude the trip with a keynote address at the Economic Club of Toronto where he will tout Maine as a good place to invest and buy goods and services.