Economic Development and Trade

Dear SIDO Colleagues,

Welcome to the 2018 SIDO Washington Forum! Thank you for making the trip to our nation’s capital and we’re looking forward to an exciting couple of days. On behalf of our SIDO leaders, we sincerely appreciate your participation in our Washington Forum and for your ongoing support. For those who are not yet members, we would encourage you to become a member. Please feel free to reach out to me or any of our board members if you are interested.

CSG Midwest
With the popularity of craft beer on the rise, state legislators across the nation have been re-examining their laws to allow for greater growth in the industry, from statutory changes that help increase production to the removal of restrictions on self-distribution. That trend has continued in 2018, with South Dakota and Kansas among the states exploring proposals to assist craft brewers.
CSG Midwest
In August, Apple Inc. announced that the company would locate its new data center in Waukee, Iowa. The technology giant will receive more than $200 million in state and local tax incentives to build the $1.3 billion facility on a 2,000-acre site in the Des Moines suburb.

Issue: Factors like the decline of brick-and-mortar retail and rise of e-commerce in recent years have produced a transformation of the nation’s supply chain that is impacting multiple modes of transportation from trucking to rail to ports and airports. Those states that have been most successful in attracting elements of the new logistics economy have demonstrated the ability to tout key infrastructure assets, invest where necessary and enact programs to ensure they will have the workforce in place to serve this sector. As innovative companies like Amazon continue to expand their footprint in the years ahead, these efforts are likely to become even more important for those logistics leaders and the other states that hope to compete with them.  

WHEREAS, international trade and foreign investment are major contributors to the United States economy and help support millions of good-paying jobs throughout state and local communities; and

WHEREAS, U.S. exports account for nearly 13 percent of the U.S. gross domestic product and support an estimated 11.5 million jobs; and

WHEREAS, the United States and Canada have one of the largest trading relationships in the world, and Canada is the United States’ largest export market, valued at $322 billion in goods and services; and

WHEREAS, in 2016, trade between the United States and Canada totaled over $1.7 billion in goods and services every day, supporting 9 million jobs in the U.S., and Canada is the leading export destination for 32 U.S. states; and

CSG Midwest
What’s at stake for the Midwest’s food and agriculture sectors when it comes to the future of the North American Free Trade Agreement? A whole lot of jobs and economic activity, according to a letter signed in November by nearly 170 agriculture organizations and companies and sent to all 50 U.S. governors.
“Withdrawal from the accord would have adverse impacts,” the letter states before detailing why, as well as the economic consequences in various sectors.
For instance, Canada and Mexico account for 40 percent of the volume of U.S. pork exports (seven of the 10 leading states for pork production are in the Midwest) and 27 percent of U.S. beef exports (five of the 10 states with the most cattle are in the Midwest).
CSG Midwest
In September, Amazon announced its search for a second North American corporate headquarters, known as HQ2. The scale and scope of the project — the e-commerce giant is expected to invest more than $5 billion in the facility and employ up to 50,000 high-paid workers — captured not only headlines, but the attention of state and local officials.
A very public competition has ensued, and at least one Midwestern state, Illinois, is right in the middle of it.
“I’m excited about our chances for [landing] HQ2,” Illinois Rep. Mike Zalewski says. Earlier this year, he was part of an effort to reform and reinstate a long-standing Illinois incentives program known as EDGE, which is among the programs that the state could use in its pursuit.
“For every Amazon, there’s a lot more 40- or 50-person manufacturers looking to move to Illinois or to grow their business [here], and we want them to succeed,” Zalewski says. “EDGE is designed ... to help both the big fries and the small fries.”
The role of state incentives (tax credits, tax exemptions, grants, low-interest loans, etc.) has gotten increased attention in the Midwest during the latter part of 2017. In September, around the same time Illinois began making its Amazon pitch, Wisconsin was closing the deal on what lawmakers say is the biggest economic development project in that state’s history.

CSG South

Since NAFTA’s implementation in 1994, trade between the SLC region and Canada and Mexico has changed dramatically. As officials from Canada, Mexico and the U.S. attempt to renegotiate the agreement’s stipulations, it is instructive for policymakers to understand the current position of their states’ exports and imports with these trading partners. A renegotiation could have significant ramifications across state economies, including in the agriculture, automotive, and manufacturing industries.