Legislation that would bar the Arkansas Economic Development Commission from establishing or maintaining an office in China failed to clear the Senate State Agencies and Governmental Affairs Committee on Thursday, after officials for the commission and Arkansas Farm Bureau opposed the bill.
The bill is Senate Bill 252 by Sen. Trent Garner, R-El Dorado.
In last year's fiscal session, the Joint Budget Committee rejected Garner's proposal to close the office after the commission's executive director, Mike Preston, said the department already planned to trim the office's budget from $285,000 to $125,000 a year, starting in July 2020, and employ an American citizen as a liaison in China.
Garner told the Senate committee that "of course, when I put this bill out there, the governor's office pushed back."
He said his bill "won't change one contract, one policy, one economic difference from what we have done in the past and what we are doing right now.
"This is a bare minimum, a policy we already adopted to take the first of a little micro step to do something about China," Garner said.
"If we can't [pass this bill], then we might as well admit that the state of Arkansas will not address these real issues," ranging from human rights violations to stealing intellectual property, he said.
Preston said the development commission has operated an office in China since 2008 to assist businesses in the largest consumer market in the world and the second-largest economy in the world.
The commission cut its number of consultants who represent the state in China from two to one last year, based on trade wars and economic considerations amid the covid-19 pandemic, he said.
"We still have an office there through a consultant, not a physical place," Preston said. "Our China office represents China, Hong Kong and Taiwan. This individual is actually a U.S.-based citizen who travels there frequently and we refer to that as a China-based consultant."
He said 21 states -- including 10 of the 11 states in the Southeastern Conference -- have an office in China.
"This isn't about sending Arkansas tax dollars to China," Preston said. "This is about using the tax dollars to support Arkansas businesses, mostly small ones."
But Sen. Bob Ballinger, R-Ozark, said, "This to me seems like a relatively small step.
"It is something we can do to say, 'Look, we recognize that there are people who have been suffering from famine, from being locked up in cages, who are being treated as animals or put in labor camps ..., '" he said. "From a policy-maker standpoint, we have a moral obligation to God and the citizens of Arkansas."
Sen. Jason Rapert, R-Conway, said Garner's bill wouldn't prevent the commission from having a consultant in China and "just prevents a brick and mortar office space or maintaining an office."
Preston said he is worried that the bill would send "a message that we are not allowed" to have a consultant in China.
Rapert said a consultant isn't even a commission employee and it is not an office.
Jim Hudson, an attorney for the commission, said the consultant travels to China and may be working out of an office in China on an extended basis.
Rapert said the bill wouldn't prevent the Arkansas State Chamber of Commerce from having an office in China. Preston said the state chamber opposes the bill.
Rapert said that the bill "just says that the state of Arkansas doesn't want to spend their taxpayer dollars on probably the greatest world threat to the United States of America today that has been identified by our military and the State Department as communist China."
Matt King, director of public affairs and government relations, told the committee that "with the growing middle class in China, they continue to demand more and more U.S. agricultural products from the grains that we produce in the Delta to the high quality meat and poultry products that are grown in west Arkansas.
"Our farmers need to be able to continue to trade with China," he said. "We feel the need to keep the official Arkansas presence in China as it helps our producers and businesses."
The committee voted on SB252. Rapert, committee chairman, initially ruled the bill cleared the eight-member Senate committee before Sen. Jane English, R-North Little Rock, pressed for a roll call vote.
Sens. Cecil Bledsoe, R-Rogers; Breanne Davis, R-Russellville; Clarke Tucker, D-Little Rock, and English voted against the bill, while Ballinger, Rapert and Garner voted for it. Another committee member, Sen. Bart Hester, R-Cave Springs, was absent.
The committee later expunged the vote to clear the way for Garner to ask the committee to reconsider the bill.