Former Washington governor Gary Locke is the newly minted Secretary of Commerce and his in-basket is already overflowing. One problem some observers hope winds up on his to-do list: save the U.S. from the looming international embarrassment of dropping out of history's largest-ever world's fair, Expo 2010 in Shanghai, China.
Locke is well-suited to end the, well, gridlock. As America's first Chinese-American governor he has a special relationship with China. He's led trade missions there, he headed up the Davis Wright Tremaine's China practice, and he even keynoted a conference in Shanghai in 2007 on the benefits of corporate event sponsorships. No one doubts that Gary Locke is well-regarded by both the Chinese and the corporate community, key players in a successful expo venture. As Commerce Secretary, Locke heads a government department that has played a role coordinating expo efforts, though the U.S. State Department is officially charged with sanctioning U.S. world's fair pavilions. Expositions are both a commercial and a diplomatic exercise.
But the State Department efforts have stumbled. A federal law prohibits them from funding pavilions, thus the onus for raising pavilion funds falls to the private sector. In addition, State's process for considering proposals from potential pavilion creators was a dud. Every bid was rejected and most bidders were caught in a Catch 22: They could not raise money without State's seal of approval, but could not get that approval without having raised money. In the meantime, a year of fundraising was lost. Major pavilions at expos often cost tens of millions of dollars, and the current estimate for the U.S. Shanghai pavilion is about $60 million.
Maybe not in AIG bonus terms, but $60 million is a lot of money. We're in the middle of a global downturn, and in recent years, U.S. government, public and corporate sponsors have been reluctant to spend on world's fairs even in good times. Americans tend to think expos are no longer happening, in part because a generation has passed since North American hosted a fair (Vancouver's Expo '86). But they are still going great guns overseas and spreading. Japan, Spain, Portugal, and Germany are some recent expo hosts; Italy and Korea have world's fairs in the works. Mexico, Morocco, and Turkey have been touted as other possible expo sites. One day, you might be able to say "Meet me in Tangiers."
The event in China is a big deal, symbolically and physically: more than 200 countries are expected to participate and over 70 people million projected to attend. Failing to be a presence would be seen as a slap at the Chinese, and perhaps a lost opportunity to win the hearts and minds of a growing mega-market.
Given the world economic climate, some are getting the jitters about whether China can indeed pull it off. A headline in Britain's Telegraph said China risked "humiliation" if corporations and countries don't follow through. That turns up the heat on the U.S. "I'm sorry to say it is just unbelievable that the richest country in the world would decide to ignore the Expo," Shen Dingli, the head of the Centre of American Studies at Shanghai's Fudan University, told the newspaper. The pressure increases as things get dicey. In boom times, the U.S looks arrogant for not participating; in tough times, it can be accused of abandoning a major trading partner when the chips are down.
After its bidding failure, State did sanction a new non-profit group headed by Nick Winslow, a theme park expert, and Ellen Eliasoph, a Washington, DC attorney with China experience, to pull a pavilion together. At first, they got nowhere and last fall threw up their hands. But State talked them into trying again, and Winslow now reports progress. Recently, 3M Company came on board as a sponsor and the former head of international trade at the Commerce Department and ambassador to Singapore, Frank Lavin, has joined their group's advisory board.
Winslow says the diplomatic efforts have picked up too: the Chinese Foreign Minister and Chinese ambassador are talking with State officials and U.S. CEOs to get them on board supporting the pavilion effort. As a result, he says, his phone is "ringing off the hook." Still, he faces stiff deadlines: he has about a month left to raise his $60 million. April 15 looms as the date when the U.S. must make a final commitment. The Chinese press is putting on an optimistic face, but it's a huge hill to climb.
That deadline pressure, and the long history of the U.S. expo effort being snagged and tangled, combined with the lateness of the hour, have caused at least one major pavilion bidder that was passed-over by State to suggest that it join forces with the Winslow group. The jilted BH&L Group has long expo experience and advisors that include many with Northwest ties, including the Seattle area's legendary China consultant Sidney Rittenberg, UW Hit Lab co-founder Bob Jacobson, and Northwest tech consultant Mark Anderson. BH&L believes it has a better pavilion concept (one with an Internet component) and the know-how to pull off something special (they had architect Frank Gehry lined up to consult on pavilion design). They were angered that State backed a group that wasn't even part of the bidding process. But they're determined to help make something work. Jacobson says that the bungled process is because of roadblocks thrown up by the former Bush administration. Winslow, pressing ahead, has not taken them up on their offer to join forces.
Jacobson also believes that everyone involved in the process has been operating under a mistaken assumption about the U.S. law regarding funding pavilions. It is widely believed that federal law prohibits the government from spending money on pavilion efforts, but Jacobson says that his reading of the law suggests wiggle room. He says that it only prohibits the State Department from spending its funds. That means other government sources could potentially be tapped or Congress could appropriate money (or better, change the law). The Commerce Department, he says, could pass the hat and get funds from other agencies. Given the economic climate, it's hard to imagine private sources being the sole source of pavilion support.
One problem with relying so much on sponsorships versus public funds is that corporate funded pavilions can become either too commercial, or a surreal mish-mash. In 1992, the U.S. pavilion in Seville, Spain featured a recycled geodesic dome, an old film from General Motors, and a display of the wonders of Kansas City. In 2005, in Aichi, Japan the U.S. pavilion sported garish commercial signs, funding from Toyota, and a hip-hop friendly Ben Franklin.
Winslow's pavilion funding pitch sketches out the thrust of a multimedia presentation that takes visitors on a tour of the ideal American city of 2030 (high-rises, clean smart cars, etc.), but it indicates that the future portrayed will be shaped by sponsor marketing needs: "The USA Pavilion organizers will work closely with Pavilion sponsors to incorporate their visions of the American city of 2030 into the Pavilion story." Perhaps the people of the future will all sport Microsoft tattoos.
Both Winslow and Jacobson pin hopes of success on new goals and leadership from the Obama administration. Hillary Clinton was going to discuss the expo with officials on her trip to China. Winslow tell me things are already shifting in DC: "The prevailing attitude has moved from 'should we do this' to 'let's figure out how to get it done.' Senior U.S. Government people will now be pro-active in support of the pavilion. We are feeling very good and look forward to having a wonderful pavilion at Shanghai Expo."
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