8/14/2019 Policy Analysis of 'HB07-1015 Colorado International Trade Office'

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To: Representative Judd, ChairmanFrom: Inayet Hadi, Policy AnalystDate: October 22nd, 2007

Subject: Analysis of House Bill 07-1015

Additional Responsibilities for the International Trade Office

Executive Summary

As requested, I have analyzed the problems associated with the State of Colorado non-existingauthorizing legislation to empower Colorado International Trade Office (C-ITO) to analyze, review,influence and affect U.S. International Trade Agreements in favor of Colorado. Based on five importantcriteria political feasibility, administrative feasibility, cost-effectiveness, effectiveness, and beneficiaryI have concluded that the best policy is the adoption of HB07-1015.

By not reviewing and analyzing international trade agreements for potential impact onColorados produced goods and services is not wise a decision to make in a globalized economy. Forexample the free trade agreements signed by the U.S. has accounted for then $900 billion in two-waytrade (Heritage, p. 4). The total trade the US had with the rest of the world in 2005 was $1.2 trillion(Heritage, p. 2). This in sharp contrast to Colorados export in 2006 totaled to $8 billion (export.gov,

para. 11). Authorizing ITO to analyze, review, influence Federal government trade negotiation will

allow Colorado increase its international trade with the rest of the world.Also, the policy is required in order for Colorados legal structure to conform to treaties theFederal government has signed and accepted. By not having laws conformed to international tradeagreements signed by the U.S. government can create legal vulnerability for Colorado State.

GoalDefinition

Establish rules, legislation, or other means through which the State of Colorados ITO caninfluence international trade agreements. The State will be empowered to become aware of and

influence U.S. trade policies that will benefit Colorados economy and legal structure.

Alternatives

8/14/2019 Policy Analysis of 'HB07-1015 Colorado International Trade Office'

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8/14/2019 Policy Analysis of 'HB07-1015 Colorado International Trade Office'

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Evaluation

Matrix

Beneficiary? Cost

Effectiveness

Feasibility

(Political)

Feasibility

(Administrative)

Effectiveness Summary and

Recommendation

Status Quo Low

Benefits dispersedacross the 50 Statesas result of U.S.governmentInternational TradeAgreements.

Medium to High

No additionalexpenditure ofpersonnel, time,or money.

Medium

No strong interestsexist to support thestatus quo. But onthe other hand, noone might beopposed to it either,

High

Nothing furtherneeds to be done.

Low

The Director ofITO is constrainedto actually affectU.S. Trade Policy

Low on 3 of the 5criteria. Analternative solution

is highly desirable.

HB07-1015 HighColorado wouldactively influenceU.S. Trade Policy,thus benefitingColorado directly.

HighNo fiscal impacton Statesexpenses orrevenues.

HighStrong supportexists amongCommitteemembers foraccepting the Bill.

HighCompetent office (C-ITO) already existsto implement thisBill.

MediumThe C-ITO has theauthority, capacity,and support of theState. Does notnecessarilytranslate toinfluence.

High on 5 of the 5criteria. Solution isRecommended.

Abroad ITO

Offices

High

Colorado is taking a

more directapproach to benefitfrom InternationalTrade.

Low to Medium

The potential for

foreign directinvestment toexceed costassociated withabroad offices isslim.

Low to Medium

Opposition by

decision makersand legislators tosending jobs over-seas at taxpayersexpense. whatabout the costs aswell? They mightbe opposed to that.

Low

The administrative

and security costassociated withmaintaining overseasoffices will bedifficult toimplement andmaintain.

Low to Medium

The limited

number of foreignoffices will be tiedto geographicareas. Will not beflexible enough tobenefit fromglobalizedeconomy.

Low to Medium on allfour criteria. This

alternative has futurepotential as needarises. Differentalternative

preferred.

Contracting

with a Firm

Medium

The Federal

government mightnot be convinced toconsult withColoradosgovernment.

Medium

Current funding

will be re-allocated toprivate firm.

Low

Resistance from

sponsors of ITO inthe State Assembly.Legislatorsinfluenced bypowerful interestsgroups andAdministrators.

Medium

Additional duties

will be created tomonitor, evaluate,and audit contract.This may not below, but certainlymedium- it doesntsound like thesewould beprohibitive duties,so I would say it is

medium,

Medium Theprivate firm has the

potential to becomeeffective atinfluencing U.S.Trade PolicybenefitingColorado. The issueof loyalty will likelyarise. The firm isloyal to profit andmay not be loyal to

the states needs.

Medium on threecriteria, contracting

out duties from a stateagency to a privatefirm does notguarantee goals will

be met.