WorldCity Business Magazine

(2) Doing business anywhere

by WC

The subtitle for Miami attorney Tom Travis new book is “The Essential Guide to Going Global”

There were no trade lawyers south of Washington, D.C. or east of Los Angeles, writes Tom Travis in the opening pages of Doing Business Anywhere, recounting the decision he and Lee Sandler made to leave the New York firm where they met in the mid-1970s for Miami.

This was before the Berlin Wall fell, freeing Eastern Europe and the countries of the former Soviet Union to participate in the global economy; before China began its opening to a more market-based economy, spawning the manufacturing juggernaut so familiar to all today; and before India began its journey along the same path, developing great expertise in technology and call centers.
It was before, as Travis writes, globalization entered the lexicon. The world was still round.

Today, the firm celebrating its 30th anniversary in Miami is known as Sandler Travis & Rosenberg, with offices and attorneys across the United States, in Brazil, Canada and China. Launched from the firm is Sandler Travis Trade Advisory Services. It hosts more than 100 events per year, all focused on international trade and Customs. Its clients are governments, leading apparel and automotive companies and many other prominent multinationals.

Looking back over three decades of work as an attorney and advisor, Travis boiled down to six tenets The Essential Guide to Going Global, the subtitle for the book. As a backdrop for each of the tenets, he intersperses anecdotes from his travels, headline-making events, strategies employed to create opportunities, and the regulatory framework behind it all. A quick look:

Take Advantage of Trade Agreements: Think Outside the Box

>The first subhead in the first chapter is The Underwear War, and it recounts how Fruit of the Loom lost its market dominance to Hanes, then part of Sara Lee, when Hanes began using trade preferences with the Caribbean Basin to greatly reduce its costs by building textile plants there.

>Trade and politics can be used to diffuse, or attempt to ameliorate, tensions. The United States first free trade agreement was with Israel, in 1985, and an extension of sorts in 1996 gave Egypt, Jordan and the Palestinian territories the opportunity to benefit from this FTA by increasing trade with Israel through qualified industrial zones in their countries or territories. Although it has
shown little success in the Palestinian territories, Travis writes, Egypt and Jordan have both created in excess of 30,000 jobs. The United States and Jordan subsequently signed their own FTA, 17 days after the Sept. 11, 2001 terrorist attacks on New York and Washington.

Protect Your Brand at All Costs

>Tommy Hilfiger has a powerful brand recognized the world over. When Norwegian Church Aid, a human rights group, charged it with human rights abuses for conditions at a factory in Thailand, the manufacturer knew it had more than a public relations problem. It turns out, Hilfiger had worked with the factory for six months but pulled out four years before the allegations were made. The goods being produced there were counterfeits. Up to 25 percent of all pharmaceuticals in the developing world and 10 percent in the developed world are believed to be counterfeit. China reported 192,000 deaths in 2001 due to fake drugs, according to the World Health Organization.

>Nike, Starbucks and Union Carbide are three high-profile companies that have come under intense international criticism for labor or environmental issues. Union Carbides Bhopal catastrophe is on a entirely different scale, of course, but few remember that sabotage led to the incident which left thousands dead.

Maintain High Ethical Standards

>The U.S. Department of Justice conducted more foreign bribery investigations, Travis reports, between 2001 and 2006 than in the two decades prior to that, after the creation of the Foreign Corrupt Practices Act.

>Usually companies lose but sometimes the government can convict and imprison company officers, as American Rice discovered in 2004, after it was found to have worked in cahoots with Haitian Customs officials to save $1.5 million in duties. A vice president directly involved received a 37-month term and the president, found to have been aware of the scheme, received 63 months.

Stay Secure in an Insecure World

>This one is largely about Sept. 11, of course, but where much of the attention on the regulations that resulted is negative, Travis writes New security measures are improving efficiencies. A Stanford University study he cites found that companies took greater control over their supply
chain, reducing theft and inventory and increasing speed.

>Keeping people safe is also critical in the globalized world. Latin America, specifically Colombia, remains a hot spot for abductions. More than 3,500 kidnappings and $250 million in ransom payments are reported in Colombia annually.

Expect the Unexpected

>No matter how sound your strategic plan and how prepared you are to move forward with your international business endeavors, there will come a time when circumstances beyond your control thwart event the best laid plans, begins this chapter.

>Katrina. The SARS Scare. Mexican Peso Crisis. The West Coast Port lockout of 2002. None of these could be easily foreseen, and their impacts on trade, tourism and commerce were all profound. The 29 West Coast ports accounted for an incredible 7 percent of U.S. gross domestic product at the time, Travis writes, and to end the port lockout, President Bush invoked the Taft-
Hartley Act for the first time since the Carter Administration. Almost 2,000 people died as a result of Hurricane Katrina but there was an impact on commerce as well. New Orleans-area seaports were critical to exports of soybeans, wheat, rice and corn, and Katrina had a profound impact on the Mississippi River barge traffic.

All Global Business is Personal

>Pointer 1: E-mail is great. Phone calls and video conferencing are excellent tools. But nothing can match face-to-face, Travis writes. When Hanes wanted to source underwear from Honduras, the then-senior executive of parent Sara Lee, Jack Ward, headed to Honduras to meet with Juan Canahuati, a major apparel producer. That decision led to the deal that helped propel Hanes past Fruit of the Loom. Years later, when Ward had moved on to Russell Athletic, his personal relationship with Canahuati was rekindled to the benefit of both.

>Pointer 2: One of the keys to succeeding as a global entrepreneur is to set up the infrastructure in the home office so that it runs smoothly during your extended absences. In South Florida, home to more than 1,200 multinational companies and tens of thousands of globe-trotting executives, that is a truism already well known.

>Pointer 3: Make yourself available 24/7 if you plan to participate in the global economy, Travis writes, with anecdotes about a 4 a.m. call from China, where it was 4 p.m., and a call from Singapore breaking up a quiet and difficult to arrange Sunday night dinner with two adult children.

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Q&A with Tom Travis
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_Tom Travis, author of Doing Business Anywhere: The Essential Guide to Going Global, co-founded the Miami law firm of Sandler Travis & Rosenberg with Lee Sandler in 1977. In addition to being managing partner of the firm, he is chairman of Sandler Travis Trade Advisory Services, which is a consultant to governments and multinationals on a wide variety of issues related to international trade. The two firms have offices in Asia, Latin America, across the United States
and in Canada, with more than 300 Customs and trade professionals on staff. WorldCity President Ken Roberts conducted this interview with Travis._

First, a compound question. Why write a book? When did you decide to write it? How long did it take to write it?

Certain colleagues and friends suggested that I consider setting forth some of the insights I have gained as a result of over 30 years advising multinational corporations and countries as they adapt to the everchanging landscape of the global marketplace. I decided to write it about 15 months ago. The book was completed over a number of months due to my heavy travel/work load.

How is it selling?

The book is selling well. We hit No. 1 on Amazons and Barnes and Nobles internationally themed lists and as high as No. 11 on general business books.

Both the law firm and the advisory firm do a great deal of work for governments. Which governments is the firm representing today?

Our consulting group, Sandler and Travis Trade Advisory Services, provides advice to U.S. Customs and Border Protection (the new name for the Customs service) on the development of the new Automated Commercial Environment, or ACE. This is its new generation of software that all entities that work with CBP will use in the future. STTAS also provides advice on global customs and modernization and security requirements to governments and port authorities around the globe.

Our law firm, Sandler, Travis & Rosenberg, has provided advice to many countries in connection with the negotiation of trade agreements, including South Korea, El Salvador, the Dominican Republic, Panama, Malaysia, Laos, Cambodia and Sri Lanka. We were one of only two U.S. law firms that advised the government of South Korea on the recently negotiated free trade agreement with the United States.

You obviously travel extensively for work, from Asia to Latin America, across the United States, to the Middle East. Is there one place in the world you havent been where you would really like to go?

To date, I have almost 9 million miles on American Airlines alone. So there are not too many places still on my list; however, the Seychelles and Maldives islands in the Indian Ocean would be toward the top.

Who has been the best and who has been the worst for free trade the current President Bush, former President Clinton, the first President Bush or former President Reagan?

Honestly, each of the presidents you mention has been involved with the expansion of trade opportunities and agreements. Highlights of each: Reagan the Caribbean Basin Initiative, and especially for Miami, the extension of quota-free access for Mexican/Caribbean apparel and Israel Free Trade Agreement; Bush I NAFTA; Clinton extensive lobbying to pass NAFTA with side letters on environment and labor; Bush II CAFTA , FTAs in the Mideast (Oman, Bahrain, Morocco) as well as Australia, Singapore, South Korea, Peru, Panama, Colombia, etc.

Who looks good among the current crop of candidates for president with regards to trade policy?

Trade is always a contentious issue in an election cycle simply because of the change it accelerates in the nature of business and products and its impact on citizens workers and consumers. Nevertheless, we have continued on a path of trade liberalization since World War II and I do not think that movement will stop no matter who is elected.

What U.S. trade policy would you most like to change? How and why?

Elimination of special antidumping procedures against Vietnamese apparel. It will not help the domestic industry and it hampers development in a market and country with which we should be engaged.

Will Latin America be more important on the global scene in five years or less important? Why?

Likely the same. The one recent big change is that the unending appetite in China for raw materials has boosted a number of Latin American economies.

What are your thoughts about the U.S. trade deficit?

If you discount the oil imports, the deficit looks more manageable.

What three to five countries look the most promising to you, like they are most likely to leverage trade opportunities for the benefit of their people?

Haiti (new HOPE law), Central America Free Trade Agreement nations.

What country or countries are headed in the wrong direction, with regard to trade policy?

Myanmar.

Can the apparel industry in Central America survive against competition from China and other Asian nations? If so, how?

Yes, those businesses that provide more services to their customers than just cutting and sewing (will succeed). The proximity of the markets in the United States along with the trade preferences in place provides good incentives for some products.