KUALA LUMPUR, May 13, 2015:
US President Barack Obama’s visit to Nike Inc last Friday, which saw him defend his proposed Trans-Pacific Partnership agreement (TPP) did not bode well with labour groups, lawmakers and other firms.
With Nike seen as the leading example of an American-based global giant built around low-wage labour in places such as Vietnam, one of the 12 countries negotiating the proposed TPP, it has drawn criticism in its support of the agreement which many are saying that will only benefit itself and other similar large corporations.
US congressman Peter DeFazio reportedly said: “The savings from tariffs from Nike and other firms would more likely go to profits than they would accrue to the lowering of prices for consumers.”
Nike’s competitor New Balance, which is headquartered in Boston and has factories in Maine, also has a lot at stake in the proposed agreement.
The company employs more than 1,350 of the few thousand workers who still make shoes in the US, and its officials fear those jobs could be lost if tariff cuts under the deal lead to an influx of cheaper wares from Vietnam.
“I think it’s great that the president is getting out and talking about his agenda,” said New Balance vice president Matt LeBretton in a report by Politico.
“But it would be great to have him come to a footwear company that actually still makes shoes in the US and be talking about this agreement. We’d welcome that opportunity.”
However, Nike argues that it has more than 26,000 employees in the US, including more than 8,500 jobs in Oregon which is far more than what New Balance has.
“These jobs depend on free trade and our ability to reach consumers in 190 countries around the world in which we sell our product,” said company spokesman Greg Rossiter
Nike also announced last Thursday that the trade deal would allow it to get back into US manufacturing, creating as many as 10,000 manufacturing and engineering jobs, as well as tens of thousands more construction and support positions.
Labour unions have instead discounted the job promises.
“We have heard similar promises from companies before, and very few have panned out,” said Eric Hauser, communications director for the AFL-CIO, the labor federation that includes millions of workers.
“Whatever job gains Nike is promising, even assuming that they occur, is questionable considering the losses that would result at existing US manufacturers because of the drop on tariffs,” said Marc Fleischaker, trade counsel to the Rubber And Plastic Footwear Manufacturers Association, a group that represents domestic-based manufacturers in matters of trade and legislation.
“TPP will be positive for a lot of US companies, like our competitors,” LeBretton said.
“But we’ve been looking at this from a manufacturing perspective, not design jobs or things like that. I’m not trying to be critical.
“But optically, there’s one athletic shoe company that still makes shoes in the US, and that would seem to be a better backdrop for an occasion like this, perhaps,” he added in regards to Obama’s venue choice.
Currently the TPP is being negotiated between 12 countries – the US, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei – all of which represent more than 40% of the world’s gross domestic product.
The final TPP draft is expected to be concluded by mid-2015 where currently, 10 chapters of the TPPA’s 29 topics have been finalised while another ten chapters are said to be in the final stages of negotiations.
The agreement has been met with numerous criticism due to its secrecy and also many saying that the agreement will see the removal of measures designed to protect local industries and increase of US influence in Asia Pacific.
Also read:TPP plan stumbles in US senate