Tami Overby has TPP on the brain. She has for eight years now, seven of which have been as Vice President of Asia for the U.S. Chamber of Commerce. Ask her what keeps her up at night or about small businesses and she'll still end her answer with an impassioned argument for the ratification of the Trans Pacific Partnership (TPP), which she calls “biggest thing that will happen in trade in my lifetime.”
Prior to her current D.C.-based position, Overby lived in South Korea for 21 years, working with AIG and William M. Mercer Ltd. and leading AmCham Korea. For her work in promoting mutually beneficial US-Korean relations, Overby was awarded the Korean Order of Industrial Service Merit in 2009 by then-President Lee Myung-Bak.
As part of the “Asia in Focus” series leading up to the 2016 Asia Pacific Council of American Chambers of Commerce Conference (April 14-15), Overby spoke with AmCham China about not just China's role in trade agreements, but also that of South Korea, Japan, Vietnam and Malaysia.
How will TPP impact business across Asia?
It's going to be transformative (because of) the high standards of TPP and the fact that it encompasses both developed and developing countries. Countries like Vietnam and Malaysia will have additional transition periods and capacity building assistance, but the key was for everyone to agree to the same high standard.
This is quite unique, and, frankly, it's the reason the WTO fell apart. This small cluster of 12 countries, this coalition of the willing, all agreed on the importance of the high standard. The developed countries showed the flexibility and the support to help the developing countries basically use the agreement to help them modernize their economies. This is the biggest thing that will happen in trade in my lifetime.
Which countries will it impact most?
Economic studies show that Vietnam and Malaysia will have the greatest economic benefit initially, but I would suggest that it will have a huge impact on Japan.
This virtually is a US-Japan FTA (free trade agreement) inside TPP. This one helps us crack open some of the problems that we've had for decades.
It would have been very difficult in both countries to do something like this, but in a grouping of countries, we were able to address many long-standing trade challenges with Japan. I give huge kudos to Prime Minister Abe for his courage and his vision to use TPP as a way to carry out long overdue economic liberalization reform for Japan. We all know Japan lost two decades. While they were stalled in that morass, their neighbor, South Korea, used a series of free trade agreements to reform their economy. (And) most importantly, they have a very high-standard agreement with this US and the EU. No one else in Asia has that. They have used that outside pressure to help them do what they needed to do.
Reform is hard in any country. South Korea and Vietnam are using a large free trade agreement to help them do domestically, politically sensitive things that in the long-term will make their country much more competitive going forward.
Most countries have some aspects that are not competitive and need to reform. One example of this is when in 2014 (US Trade Representative) Michael Froman publicly said the US was not going to remove our sugar protection. The light bulb came on in my head that we just gave Japan a free pass in their sacred ag areas. When we started TPP, the goal was to get to zero in everything, make the highest standards possible. I suppose I was too idealistic to think that all the countries together would say this is really hard, but we will all rip this bandaid off together and do what it is in all of our countries best interests. Japan did not go to zero in five sacred areas, but they did make commercially meaningful progress.
What role do American Chambers of Commerce across Asia play in the next step for TPP?
The AmChams need to start socializing why these concepts are important. Many people say APEC is a useless, self-concerned organization, it's not binding, it's a big waste of time. I strongly disagree with that. In my 28 years, APEC is a great place to socialize ideas. The reason we have very strong cross-border data flow rules and TPP is because these have used APEC as a safe place to socialize it. What I want to do is work with the AmChams to take that even further.
American business has a really key important role to play to help with the government but also the domestic business. One example is IP (intellectual property). If China wants to have its own digital innovation, they're going to need to protect IP.
In my early days in Korea, in the early 1990s, I remember discussing IP with a particular Korean official. He said, “Oh, you Americans don't get it. IP is a basket of strawberries. America has a big basket, and Korea just wants a little of your strawberries.” Nine or 10 years later, that same official was yelling at me, “You need to push China more to protect our IP because they are stealing our technology!” And I said, “Oh, Mr. Kim, you don't understand. IP is just a big basket of strawberries. Samsung's got a big basket and the Chinese just wants a couple of them.” Then he's laughing and saying, “I get it, I get it!”
We saw this in Japan, we've seen it in Korea. As countries start developing indigenous innovations, they see the value. American companies can play a role in that. Your members deal with the Chinese government and Chinese companies every day. It's in everyone's best interest to help China. We want a strong, healthy China that follows international laws.
We need to help everybody understand why those rules are good for China, or good for Indonedia, or good for Thailand. That's the role AmChams can play.
Every two weeks, I do a TPP AmCham call with chambers in the other 11 countries. What I did yesterday was an APCAC call. I'm happy to have anyone on the call, as long as they're an AmCham and it's off the record. What we talk about is where things are in Washington.
What is the U.S. Chamber busy doing?
(This year,) the U.S. Chamber will create a TPP center. It's going to do many things. Right now it's going to work on ratification, getting TPP through the US Congress. Once we get it ratified, then we have to certify the other 11 countries and make the changes they need to make for TPP to go entry into force.
Then the really hard work begins, and this is what KORUS (the US-Korea Trade Agreement) taught me. The real challenge is implementation. You have this really complex agreement, over 5,000 pages. You have 11 different parties. When we go into force, what we're going to find is that the people who negotiated it will be gone. We're dealing with new people who maybe don't agree with how it was negotiated.
The good news is that USTR has a lot of experience doing this. In the next few weeks, USTR will announce something called the implementation and enforcement plan with the Treasury Department, State Department, Commerce – lots of different organs of the US government will be involved. If it's not enforced, and if it doesn't work, it's a huge fail. We would have all just wasted eight years of our lives.
What's your opinion of TPP?
The U.S. Chamber has a mandate to support TPP. Reality is, our members for the most part like the deal. Nobody loves the deal. That's really good because it means it's a balanced deal. If one country feels they got everything, that's bad.
There are a lot of good things in TPP, but there are some industries that are only focusing on what they didn't get. Ford Motor Company has come out in opposition because they did not get enforceable currency provisions. We do not think it belongs in a trade agreement. Trade officials don't have any controls over fiscal policy.
As soon as the deal came out, there were some members of Congress who said we needed to renegotiate. There were other members of Congress who said that we needed to wait for a new administration which could get more. As someone who was there for many of the rounds, especially the last rounds, there is no way we could get a better deal. This was the best deal to be had and I would argue that time is our enemy.
How do you stay abreast of all the interests within the U.S. Chamber?
Through AmChams, local chambers around the US and direct contact with members through our offices in Washington. I try to attend every APCAC.
We also have a Small Business Summit every May and that's one of my priorities as well because SMEs (small and medium enterprises) are so important to America. Most American SMEs don't export. Those who do tend to only export to one or two countries, usually Canada or Mexico. Each country has their own customs rules, it's very complicated. What TPP does is harmonize a lot of that. If you can do business with Canada or Mexico, you should also be able to do business with Vietnam, Japan, Malaysia, Australia, Singapore, Chile, Peru. That's the power of TPP.
Being at AmCham China, I often hear people say that US-China relations are the most important relationship in the world. Do you think that's overstated?
I think more about China than I do any country. Even though China is not in TPP, every single chapter of the trade agreement asks what does it mean when China joins. I didn't say if, I said when.
(Joining TPP) has to be that country's decision, and it needs to be at the right time, when they feel the political will is there and they're ready to make the commitments. Vietnam has the farthest to go and the most changes to make. China says it can't meet the standards. My response is if Vietnam can make it, then you can. No country has do it all on day one. There will be phases and assistance. We're all in this together.
What keeps you up at night?
There is growing protectionism – everywhere. That includes the US. Some candidates in the presidential election are saying we should build a wall. That's just crazy. The world is becoming more polarized, more crazy right wingers and left wingers. What we're seeing play out is gridlock. Compromise becomes a crazy word. (We) need to find pragmatic solutions.
We need to look at what happens if the US doesn't ratify TPP – what does that mean. It would be the same as AIIB (Asian Infrastructure Investment Bank), another big policy failure for the US. The closest friends and allies chose China when the US was actively trying to get them not to. If we don't do the right thing (now), we will be on a terrible path, pushing everyone towards China. Winston Churchill said, "You can always count on Americans to do the right thing – after they've tried everything else."
How do you foster new leaders?
I got lucky, but I work really, really hard. Luck is timing and hard work at that critical inflection point. I try to create opportunities for people on my team to get lucky.
I'm in the process of having to replace one of the stars on my team, Catherine Mellor, who was working on the TPP and APEC portfolio for six years. She had a great idea: She wanted the chamber to have CEO breakfast on healthcare. That created an opportunity for the US chamber to have a global healthcare program, and so she was just promoted off my team to run it.
What books have influenced your career?
I read How to Win Friends and Influence People as a very young person. It teaches that you can get anything you want if you help people get what they want.
I lived outside the US for 21 years, living in South Korea and traveling. (From that experience, I learned) there's not a right or wrong way to do most things, just different. I try to see things from another perspective. If I help other people, they will help me.
As an avid golfer, do you have a favorite course in Asia?
That's a tough question because there are some amazing golf courses. One of the weirdest is in the middle of Bangkok. Royal Bangkok Sports Club. It was originally built for horse racing, so the place is. To play that course when the horses are running is unreal.
Come back to America, and the first time I played golf again, (it was a shock). They said, “Put your golf shoes on here.” I said, “Here, in the parking lot? Where's the sauna, the restaurant, the club house?” Service in America is not what it is in Asia.
Tami Overby will speak at the 2016 APCAC Business Conference (April 14-15), which will bring together over 300 business, policy, diplomatic, government, and media leaders for two days of important and incisive discussion on China’s Asia Pacific engagement and its implications for American business. This story is part of the Asia in Focus series.
