The Joint Budget Committee today turned down two proposals to punish China.
First up was Sen. Trent Garner (R- El Dorado), who proposed to strip the Arkansas Economic Development Commission of $300,000 to operate an office in China. He’s been on this tear for some time for China’s failure to stop the spread of the coronavirus. “China lied and people died,” he said.
Gov. Asa Hutchinson, who’s made China a major economic target, is reducing state spending in China but said it would be unreasonable to freeze out a country that is a major buyer of Arkansas farm products. He said it was isolationism.
He said China holds the U.S. hostage through control of the supply of many medical supplies. By punishing China, manufacturing might return to the U.S., he claimed.
Sen. Jim Hendren asked Garner what it could cost Arkansas if China retaliated against such a measure by stopping agricultural products. Garner said he doubted that would happen. “You’re willing to risk that for a $300,000 savings?” Hendren asked.
Sen. Keith Ingram noted that Tyson Foods opposed the measure. He said Tyson and the governor’s office wouldn’t negotiate with him. Ingram gigged his comments about China whistleblowers with what’s happened to U.S. whistleblowers and he drew an angry denial from Garner about Donald Trump’s downplaying of the virus threat.
Rep. Stephen Meeks worried that Arkansas farmers could be hurt without a representative in China.
Garner got friendly questioning from Sens. Brianne Davis and Jason Rapert. She emphasized no company had gotten directly in touch with him. Rapert talked about abuse of human rights in China. He also mentioned the failure of a $1 billion pulp mill in Clark County once proposed by a Chinese company. The return here is “very poor,” Garner said. Said Rapert: “I represent freedom and liberty. I don’t represent communists.”
Commerce Secretary Mike Preston defended the spending. He opened by noting he was wearing a Donald Trump tie made in China. Now is not the time to take away economic development tools, Preston said, with an economic recovery ahead.
The AEDC has been spending $285,000 on two contracts in China, but plans to reduce it to $125,000. Some 240 Arkansas businesses have Chinese relationships, he said. He noted a Chinese garment plant is now operating in the Little Rock Port. It is manufacturing gowns and masks to UAMS, employing 200 people. He said a Walmart can look out for itself, but small businesses are helped a lot by “having someone to lean on.” Taking that away doesn’t hurt China, “it hurts Arkansas,” Preston said.
Rapert asked if Arkansas should be supportive of the kind of unfair labor practices that the Chinese government allows. Preston said he wasn’t supportive of unfair labor practices.
Jim Hendren noted Saudi Arabia has every bit as bad a human rights record. Preston said defense manufacturers, including in Arkansas, probably wouldn’t like to see retribution against Saudi Arabia.
Garner rounded up only seven votes for his amendment.
Next up was Sen. Mark Johnson (R-rural Pulaski County). He proposed to bar use of economic development money in the governor’s quick action closing fund or the state superprojects fund from going to China, the Chinese Communist Party or a company controlled by China.
Johnson said the U.S. doesn’t have an even playing field with China and should take steps to encourage reciprocity with his measure. He said he would amend his amendment to exempt previously negotiated deals and to exempt Arkansas companies. He emphasized that it was a one-year limitation.
Johnson’s amendment also failed. It drew 9 votes on the Senate roll call, needing 15 for passage.