The Asia Pacific Council of American Chambers, better known as APCAC, is an association of 29 American chambers of commerce in the Asia-Pacific region. Collectively, APCAC represents over 15,000 businesses, over 50,000 overseas American workers, and a total of over 10 million employees.

APCAC was established 50 years ago in 1968. Its original focus was to work on Section 911 of the tax code that concerns the taxation of American citizens based on their worldwide income and not solely on income earned in their country of residence, which almost all developed countries follow. Since 1968, APCAC has grown into a strong advocacy organization that continues to advocate for tax reform, but has also taken on many other important issues of concern to American businesses abroad, including trade, investment, tariffs, and travel.

The 2018 Delegation

APCAC’s primary method of advocating is through its annual Door Knock in Washington, D.C. The 2018 Door Knock was held from July 15-18 with about 40 attendees, representing 29 member companies from Australia, China, Hong Kong, Japan, Korea, Malaysia, Mongolia, Philippines, Singapore, and Thailand.

The Philippines was well-represented with five attendees including George Drysdale from Marsman Drysdale, Patrick Muttart of PMFTC, Rynor Jamandre of Quantity Solutions, AmCham’s Legislative committee chairman John Forbes, and Executive Director Ebb Hinchliffe.

There were many highlights during the week. The first three days were reserved for APCAC matters as a whole and did not deal with specific issues of specific countries; the final two days in Washington were used by the Philippine delegation to work on issues specific to and between the Philippines and the United States.

Looking Back, Looking Forward

Looking back, during the summer of 2017, on an almost daily basis, almost every major world newspaper had the Philippines on their front page . The drug war, Marawi, and the implementation of martial law in Mindanao were the prime headlines. This year – 2018 – it was a different story. The Philippines was seldom in the news - and what little there consisted of more positive stories.

However, in the summer of 2018,China made the headlines. The question was how to deal with China’s rise as a global power, both politically and economically, and, to some extent, militarily. At the Door Knock, the trade war and imposition of tariffs on imports of various goods from various countries to China and U.S. allies were well debated. Most agreed that actions are necessary to counter China’s policies toward intellectual property of investors and currency manipulation, among others. Policy makers told us the theory that China would play to the rules of Western liberal democracies after joining the World Trade Organization has been disproven by China’s action over the last 15 years. Thus a tougher policy is being taken by the Trump administration. Still, the overall sentiment was that a drawn out trade war is not the best way to settle trade imbalances of the US with China, Europe, or our North American partners.

In the wake of the success of the Trump tax reform that ended U.S. taxation on income of U.S. companies abroad, the U.S. Congress showed considerable interest in APCAC’s tax concerns. This included amending the Foreign Account Tax Compliance Act (FATCA), ending taxation on Americans working overseas, and a revision to some of the provisions of the recently passed tax bill that negatively affected small and medium enterprises.

The top U.S. political story was the upcoming November midterm elections. The general consensus of the prominent pollsters we met - among others - was that the Democrats would take back the House of Representatives and the Republicans would hold on to control of the Senate by a narrow margin.

Future for a Phil-Am FTA?

The highlight of the meeting from the Philippine perspective was the discussion around a Free Trade Agreement between the two countries. Not long ago the Philippines was far down any preferred list of countries with which the U.S. might enter into a free trade agreement. But with Japan and Vietnam preferring to pursue the 11-member Trans-Pacific Partnership (with or without the United States after its withdrawal), then the best country with which to form a FTA with would be its long-time friend and partner in Asia, the Philippines. Preliminary discussions are ongoing and, if a decision is made to begin, President Trump must formally notify U.S. Congress prior to their commencement. AmCham will provide updates on any future progress and what this could mean for businesses nationwide.

Highlights

This year’s Door Knock ended on a high note, but perhaps the best way to understand the content, influence, and importance of the Door Knock is to provide a list of the people we met and the discussions had over the course of the week.

• The U.S. Chamber of Commerce’s leadership welcomed the APCAC delegations by briefing them on trade and other policy issues.
• APCAC retained a lobbyist, the BGR Group, to assist with the Door Knock meetings and advocacy issues. BGR gave their view of the overall Washington political climate and an overview of the week’s activities.
• The second and third days were spent at the impressive U.S. Chamber of Commerce building facing the White House. In these all day overviews from the Administration, were graced by speakers from the Departments of Agriculture, Commerce, State, and Treasury, USAID, the office of the United States Trade Representative, the National Security Council, the Department of Treasury, the National Economic Council, and the office of the Vice President, among others.
• It was a great pleasure to have former USAID Philippines Director Gloria Steele speak to APCAC and point to the Arangkada Project as an example of how an American Chamber of Commerce in Asia cooperates with USAID in achieving policy reforms in the investment and trade environment of developing countries.
• Notably, the Vice President’s Chief Economist Mark Calabria cited the Australia-U.S. Free Trade Agreement as a model for bilateral trade agreements in the Asia Pacific.
• Ken Isley, the Administrator of the U.S. Department of Agriculture’s Foreign Agricultural Service spoke about trade and the agricultural priorities of the Trump administration.
• Ambassador Matt Matthews from the State Department spoke about the robust role of American businesses in the Asia Pacific and beyond. In his talk, he mentioned how “we are working with our partners to address unfair economic behavior, break down barries to market entry for American goods, and help U.S. companies grow market share.”
• Undersecretary David Malpass from the U.S. Treasury briefed members on important tax and regulatory issues.
• Stephen Moore, an economist for the Heritage Foundation think tank, discussed his insights on the Trump administration’s tax and economic plans, pointing to high economic power and low unemployment data.
• Briefings from political pollsters and major think tanks dominated the morning of the 17th: the America Enterprise Institute (AEI), Center for Strategic & International Studies (CSIS), and the Heritage Foundation, Whit Ayers of North Star Opinion Research, and Tony Fabrizio, principal of FabrizioWard spoke on politics, trade, and November 2018 election probabilities. The afternoon was spent on Capitol Hill with various U.S. Congressional leaders and Senators speaking to the delegation. This included Republican Congressmen Ted Yoho of Florida and George Holding of North Carolina, Republican Senators David Perdue of Georgia and Cory Gardner of Colarado, and Democrat Congressman Joe Crowley of New York. The last meeting on the Hill was a Trade Panel Discussion with the U.S. Senate Finance Committee and the House Ways & Means Committee Staff members. The day ended with a reception hosted by the Coca Cola Company at their Washington, D.C. office.
• The 18th was set aside for each Chambers’ agendas. For us, it meant a visit to the Philippine Embassy with Minister for Economic Affairs, Jose Victor Chan-Gonzaga, followed by a meeting with U.S. Commerce Department and Commercial Officer Sarah Fox and Deputy Director Ian Clements. A meeting in the U.S. Trade Representative office with Acting Assistant U.S. Trade Representative for the Asia Pacific, Karl Ehlers, followed. We then met with the U.S. Philippine Society where Ambassador Thomas Hubbard and Hank Henderson were in attendance. The U.S. ASEAN Business Council’s Mark Meily and Riley Smith also had a quick word with us, as well as the U.S. Chamber’s John Goyer. We rounded off the day with the U.S. State Department’s Deputy Assistant Secretary Peter Haas and Senior Philippine Desk Officer Richard Blackwood, and finally, the Philippine Caucus at the offices of Congressman Bobby Scott and Congressman Steve Chabot.

As a reminder, the APCAC Door Knock and the regional APCAC meetings are open to every AmCham member and all members are encouraged to take part. The next doorknock has been scheduled for July 14-19, 2019 , and AmCham will gladly take all willing participants, ensuring our delegation has a strong voice across all sectors. Sooner still, on March 4-5, the 2019 APCAC Business Summit will be held at the Grand Hyatt in Hong Kong, where the 29 Chambers will once again gather to discuss from across the region matters that concern them.

Here’s to this year’s successful Door Knock, and to all of us working towards a prosperous future for both American and Filipino businesses.

Written by Ebb Hinchliffe, AMCHAM Executive Director

Editors: Mikhail Banzon / John Forbes / Leslie Ann Murray

This article is lifted from the AMCHAM Philippines Business Journal August 2018 edition. For more information, please visit http://www.amchamphilippines.com/