Local companies feeling effects of international economy crises

By CHERYL FRANKENFIELD
Collegian Staff Writer

While Americans are experiencing a stable economy, other countries are facing economic woes affecting some international business relationships.

Russia, Brazil and various Asian countries have experienced economic problems in the past few years that have had both positive and negative effects on the U.S. economy.

Local businesses such as Restek Corp. depend on foreign distributors to sell products and are affected by economic problems overseas.

"We noticed it did affect our business," said Don McCandless, director of marketing and international distribution for Restek, of the economic turmoil in Asian countries during the past year and a half.

When Thailand was experiencing currency devaluation, McCandless said Restek representatives developed payment terms for one company affected by the problem.

When a country is in an economic crisis, it experiences a recession or decline in growth, said Paul Graf, economics lecturer.

Due to the lower income, a country's residents buy fewer American exports. Americans buy more products from these foreign countries because they are cheaper, he said. For example, Brazil has experienced a devaluation of its currency, making its goods cheaper for other countries to purchase, he said.

Through both good and bad economic periods, Pennsylvania's Department of Community and Economic Development sets up trade missions to these countries to promote Pennsylvanian industries such as agriculture, tourism and technology, said Erica Clayton, deputy press secretary for the department.

"We look for opportunities to promote Pennsylvania globally," she said.

A department mission to Asia in 1997 occurred when there were great economic problems in the region and proved Pennsylvania's long-term commitment to foreign companies, said David Briel, Japan and Korea trade representative for the department.

The department estimates about $9 million in ongoing growth resulted from the trade mission to Asia, Clayton said.

Building international economic ties can be expensive, Clayton said, but it is worthwhile because Pennsylvania exports help the state's economy.

Briel said even though countries such as Japan and South Korea have experienced economic troubles that slow markets, building good business relationships is important during both good and bad times.