I appreciate this opportunity to discuss with you some issues of great importance to the economic future of our state and region. I’ll start by stressing that international commerce is vital to Oregon, and that government at every level –together with the private sector--must work vigorously and pro actively to strengthen and enhance that commerce.

After all, we're a trading state, and we've been a trading state since 1869, when the first load of Oregon wheat went to Liverpool, England, aboard the sailing ship, Helen Angier. Since then, trade has become part of Oregon's identity. Today, we export electronic goods, computers, industrial equipment, wood products, transportation equipment, grain, metals and chemicals, to name just a few. We're the 17th-largest exporting state in the country, and our exports have roughly doubled in less than a decade, to more than $12 billion a year. Clearly, trade is as important to our economic future as it has been to our past.

The Port of Portland will play an important role in making that future a bright one. We can easily see its importance to our future in the present. Today, the Port's maritime operation exports more wheat than any other port in the nation. The Port ranks ninth in total tonnage, 15th as a container port, and number one as a gateway for imported cars. PDX serves more than 13 million passengers a year, with service on 31 carriers and 581 flights a day. The Port creates nearly a billion dollars a year in direct earnings to the workers of the region, and generates about $3.5 billion in business for the private sector.

As you well know, many separate entities –both public and private—influence trade in a variety of ways. Some of these are federal agencies; others are state and local. Since 1996, 46 different organizations have sent representatives to the Oregon Trade Conferences held each spring and fall. While this much participation is heartening in one sense, it's sobering in another. With 46 entities influencing trade, we can't help but worry that we may sometimes work at cross purposes.

At the state level alone, we have the International Trade Commission, the International Trade Division of the Department of Economic and Community Development, the Department of Agriculture, and the Port of Portland, which I include because I consider it a resource of the entire state. With so many cooks in the kitchen, each working more or less independently, the issue of duplication of effort is a real concern.

We need a way to coordinate the activities and policies of the state-Ievel agencies as they pursue trade objectives. In addition to coordinating with each other, they should coordinate with all the local and regional entities working in the arena. Put simply, we need to "work smarter." This means getting the best possible results from our efforts to promote trade and open new markets. It means eliminating duplicated efforts and covering all the bases when we launch an effort to lure foreign investors to Oregon.  I've asked the Department of Agriculture and the Department of Economic and Community Development to reach out to our partners in the private sector to determine where the problems are. The International Trade Commission has already reached out in an effort to learn from business owners what they want and need in order to expand international trade.

We've begun to examine the activities and concerns of the various state agencies and entities involved with trade to look for ways to improve coordination and communication among them. We're approaching the task with an open mind, with no foregone conclusions. If we find that structural changes are in order, we'll implement them. The important thing, in my view, is to promote trade policies and services that make sense for all Oregonians, that maximize the return on scarce resources.

A moment ago, I mentioned the importance of the Port of Portland to the economic future of the state. In fact, it is probably more accurate to refer to it as the "Port of Oregon."

One of the challenges the Port faces is to recognize this broader role and to develop and communicate with a statewide constituency. Toward that end, as you know, I have appointed two people to this Commission who live and work outside the Portland metro area. In doing so, I wanted to underscore that much of the Port's business comes from manufacturers and growers throughout the entire region, and that businesses and individuals from all over the state use the Port's terminal facilities and Portland International Airport. The Port truly is a resource that's available to all of us, and all Oregonians have an interest in its activities and its future.

A second challenge is the way in which you conduct your business. I was glad to hear about Bill Wyatt's actions to open the Port's activities to public input and scrutiny. This new emphasis on openness will build public confidence in the Port and shore up public support. Communicating with the public and responding to their concerns are absolutely critical to the long-term success of the Port. This is the way to reinforce a partnership between business and other sectors throughout the state, one that can generate a helpful mutual awareness of each other's needs and concerns. This is the way to head off damaging conflicts and controversy, which often result from poor communication and the perception of closed proceedings behind closed doors.

This is especially important when dealing with controversial and environmentally sensitive issues like the Portland Harbor clean-up and deepening the Columbia River channel. Channel deepening, in particular—if we are to be successful –will depend on coalition-building with a broad range of stakeholders.

As you know, I've supported providing more than $26 million in lottery-backed bonds for the channel-deepening project. Only by deepening the Columbia River channel can we accommodate the fully loaded new-generation deep-draft vessels that now dominate the shipping industry.  In order to keep the Columbia channel as a vital resource to Oregon's economy, we must ensure that the ports along the channel remain competitive with other West Coast ports. Deepening the channel to accommodate the big ships would reinforce the position of the Port of Portland as a strong, vibrant regional port that offers a gateway to the world for the goods grown and manufactured throughout this region.

Viewed another way, failure to deepen the channel would jeopardize the viability and competitiveness of a system of ports that handles more than 30 million tons of imported cargo every year. Doing nothing would require our own container-shippers to use more distant ports, saddling them with extra shipping costs to the tune of $60-plus million a year. We have more than a thousand growers and manufacturers in this region who rely on the Columbia channel for affordable access to global markets, and we would do them and ourselves a great disservice by weakening their ability to compete in those markets.

I see another benefit to the project—a way to bridge the divide between rural and urban Oregon. In rural areas, the project will help keep transportation costs down for growers of agricultural products and makers of export goods. In cities like Portland, the project will help strengthen the more than 40,000 jobs that depend on seaport activity, not to mention the 59,000 jobs held by people who work for companies that ship cargo on the river. In other words, this is a cause in which the interests of rural and urban Oregonians converge, and that's important.

As you also know, however, my support for channel deepening is given with a keen concern for environmental issues. A project of this kind requires close attention to the possible impacts on fish and wildlife --especially those listed under the Endangered Species Act. It requires attention to water quality and Oregon's Coastal Management Plan, as it relates to the federal Coastal Zone Management Act.

I believe that deepening the Columbia channel can proceed in a way that meets the stringent state and federal standards on protecting fish, wildlife and water quality. I'm committed to resolving any and all environmental issues that might emerge as this project moves through the final stages of federal and state approval, and I'm committed to seeing it commence before I leave office.

My point to you is this—in this day and age, the Port must pursue its economic objective and responsibilities with an acute awareness that they exist in the context of other values, which are equally important to the public, we serve. While international trade is an important symbol of Oregon's identity, so are fish and wildlife. So is our magnificent coastline, together with all its aesthetic and commercial values.

There is an opportunity here for the Port to provide unprecedented leadership for a sustainable solution—conducting the channel deepening project in a way that results in a net gain for habitat, something that would be consistent with my ongoing efforts under the Oregon Plan for Salmon and Watersheds. That is certainly my objective and I will do all I can to work with you, our federal partners and the environmental community to make this outcome a reality.

Another critical challenge for the Port involves the need to reestablish nonstop passenger air service to Asia. I've followed the efforts of the International Air Service Committee with great interest, and I want to applaud the Committee and the Port for the progress you've made thus far. It's impossible to overemphasize the importance of reinstating direct air service for passengers, since Asian companies have invested more than $5 billion in the Portland area alone. Nearly 700 Oregon companies trade in Asia, accounting for more than 90,000 jobs. Direct passenger service is an absolute must, if our trade partnership with Asia is continuing to flourish and grow.

Last March, I led a delegation of state officials and Port representatives in a meeting with air carriers ---All Nippon Airways, Japan Airlines and Korean Air --and we reinforced Oregon's commitment to trade with Asia. You can count on our continued efforts to drive home the importance of reinstating direct service to Asia, not only with Asia-based carriers, but also with U.S. carriers.

Finally, I want to address one other matter that's been on all our minds since September 11, and that's the security and safety of our nation and our communities. I was pleased to learn that the Port's executive director Bill Wyatt has appointed a citizens' task force to examine security at PDX. With former Governor Neil Goldschmidt at the helm, I'm sure we can look forward to some strong, innovative measures to keep our airport safe. I can assure you that state government is both willing and eager to work with the Goldschmidt task force in coordinating efforts to achieve this goal.

Since September 11, we've taken steps at the state level to enhance the general security and public safety. In October, we formed the new Office of Public Safety and Security within the Oregon State Police, to coordinate intelligence-related activities with the state Attorney General, the federal Anti-Terrorism Task Force, the FBI's Joint Terrorism Task Force, the Military Department and local law enforcement agencies.

In order to ensure solid communications links, the Oregon State Police will open its new Operational Command Center in the spring of 2002 --a major improvement to the communications infrastructure of statewide law enforcement and security.

We are taking a hard look at critical public assets like dams, water supplies and power- generating facilities in order to assess their vulnerability to terrorist attacks. The goal here is to anticipate a problem before it occurs, and take the proper action to make certain that it never does.

I've mentioned the security issue because it's vital to our well being as a state, both in the short term and the long term. Among the obvious concerns is the assurance that our homes are safe, as well as our schools, airports, water supplies and all the other working assets of our civilized society. Among the less obvious concerns, however, is the need to expand our economy, to reinforce and protect the businesses and jobs that make possible the kind of life we Oregonians so cherish. Without a safe, secure place to live and work, we cannot hope to build our economy, or to "Export Oregon." Without a safe, secure transportation system, we cannot hope to open up new international markets.

In closing, I just want to reiterate my support for your efforts to expand and diversify the region's and the state's economy. These are tough times for every part of the state including the metropolitan area. Workers from Boeing to Fujitsu to small businesses throughout the region have borne the brunt of this economic downturn.

I want to let you know that as we go about the very difficult task of rebalancing our state budget to address the recession-caused revenue shortfall, I will do everything I can to protect those programs such as economic development and training funding which help stimulate the economy. This slump will turn around. And when it does, we need to be poised to help businesses grow, help workers train and help return prosperity to communities throughout the state.

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