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State Capitol Week in Review Nov 17

State Capitol Week in Review

From Senator Larry Teague

November 17, 2017

LITTLE ROCK – When the governor and the director of the Arkansas Economic Development Commission journeyed to China and Japan on a trade mission, it underscored how important foreign trade is to the Arkansas economy.

For example, more than 20 companies have manufacturing operations in Arkansas that employ about 5,300 people.

Two years ago there were four Chinese companies in Arkansas that hired about 10 workers, but since then our connections with Chinese businesses have changed dramatically. In the past 18 months four other Chinese companies have agreed to open manufacturing plants in Arkansas. Their combined investments in Arkansas will total more than $1.7 billion and they will create about 1,500 jobs.

According to the AEDC, plants owned by foreign companies employed more than 34,500 Arkansans last year. Most of those jobs were in manufacturing, mainly industrial machinery, food and timber products, metals and transportation equipment.

The largest foreign-owned companies with Arkansas locations are from the United Kingdom, Japan, France, Switzerland and Canada.

Exports to foreign markets are important to the Arkansas economy. According to the International Trade Administration, which is a branch of the U.S. Department of Commerce, 2,365 businesses in Arkansas exported goods overseas on 2014. They employed 49,000 people.

Of the Arkansas companies that exported products to foreign countries, 80 percent were small or medium sized businesses.

The Commerce Department reported that last year the countries that bought the most Arkansas products were Canada, France, Mexico, Japan and China. The top Arkansas products sold abroad were transportation equipment, chemicals, processed foods, machinery and paper.

Engines and parts for civilian aircraft were a major component of the transportation equipment exported by Arkansas firms. Rice and poultry products, including eggs, were at the top of the list of food products exported from Arkansas.

About 47 percent of Arkansas exports are to countries which have signed free trade agreements with the United States. The most significant, measured in dollars, is the North American Free Trade Agreement, or NAFTA. Also, Arkansas firms ship products to the Dominican Republic and central American counties under the CAFTA-DR agreement, and to Singapore, Australia and Colombia under separate free trade agreements.

Almost $6 billion worth of Arkansas products were exported overseas in 2015. The AEDC has offices in Shanghai, Tokyo and Berlin with officials who promote Arkansas as a location for foreign companies looking to expand.

Prison Overtime Pay

A legislative committee reviewed a request by the state Correction Department to spend an additional $2 million on overtime pay for security officers.

The money will be transferred from other prison programs. State prison units are working to fill vacancies and retain experienced personnel. Of 4,700 positions 300 are vacant, according to the director of prisons.

State prisons this year have experienced an alarming number of violent incidents in which officers are injured and in which inmates have been injured or killed. The State Police told legislators they have investigated 28 assaults by inmates on guards this year.

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