California Will Open a Trade Office in Japan

Nearly two decades after California closed its last overseas trade offices, the state is establishing a new outpost in Tokyo, Gov. George Deukmejian said Thursday.

Named to head the office was James B. Vaughn, 38, currently director of the Office of Business Development for the state Department of Commerce. He will assume his position as director of California’s Asian Trade and Investment Office in Tokyo early next month.

The opening of the office marks California’s first official representation overseas since 1968, when then-Gov. Ronald Reagan shut trade offices in Tokyo, Frankfurt and Mexico City because of budget considerations. Deukmejian will travel to Japan to officially open the office in mid-January.

California will become the 31st state to be represented in Tokyo, Vaughn said. The state will open a second trade office in London this spring.

Under Deukmejian, the state is reversing a longstanding, hands-off policy toward coordinating trade and economic development. The decision to establish the offices was based on the recommendations of a 1984 study that, state officials say, found California falling behind in developing international business ties.

The state continues to be the No. 1 site for Japanese investment--it garnered about 45% of all Japanese investment in the United States in 1985. But, Vaughn said, California has been hurt “because the other states have been more aggressive in the Japanese-Asian market.”

California’s trade office in Tokyo will focus on encouraging Japanese investment in California as well as drumming up trade for California businesses. Vaughn said he believes that the opening of the trade office will complement the recent reform of the state’s unitary tax system, which was intended to draw more investment from overseas.