[CTC] Lower Tariffs May Help Nike, But U.S. Manufacturers Concerned

[Arthur Stamoulis]

http://www.wsj.com/articles/lower-tariffs-may-help-nike-but-u-s-manufacturers-concerned-1431111751 <http://www.wsj.com/articles/lower-tariffs-may-help-nike-but-u-s-manufacturers-concerned-1431111751>
 
Lower Tariffs May Help Nike, But U.S. Manufacturers Concerned
Domestic manufacturers, trade groups worry easier path for imports could hurt jobs elsewhere
 
The Wall Street Journal
By SARA GERMANO and WILLIAM MAULDIN
May 8, 2015
 
Nike <http://quotes.wsj.com/NKE> Inc. is pledging support of trade legislation backed by President Barack Obama on the grounds that it would allow the sportswear maker to create thousands of domestic jobs over the next 10 years. But some rivals don’t see it that way.

The sporting gear giant used an appearance by the president at its headquarters <http://www.wsj.com/articles/obama-mounts-latest-defense-for-trade-pact-1431004165> Friday to say it could create up to 10,000 manufacturing and engineering jobs in the U.S. over the next decade if the Trans-Pacific Partnership still under negotiation is approved.

Domestic manufacturers and the trade groups that represent them, however, worried that an easier path for imports could hurt jobs elsewhere.

“Whatever job gains Nike is promising, even assuming that they occur, is questionable considering the losses that would result at existing U.S. manufacturers because of the drop on tariffs,” said Marc Fleischaker, trade counsel to the Rubber and Plastic Footwear Manufacturers Association, a group which represents U.S.-based manufacturers in matters of trade and legislation.

A drop on tariffs between signatories to a Pacific trade deal could put pricing pressure on companies that already produce goods here, which could force job cuts, Mr. Fleischaker said.

Boston-based New Balance said it employs about 1,400 manufacturing workers at five factories in New England. Spokesman Matthew LeBretton acknowledged there are concerns among U.S. footwear manufacturers about how a trade pact might affect the industry, but cautioned that it is premature to discuss exactly how without knowing final terms of the legislation.

“We’ve had productive discussions with the Obama administration regarding TPP, and we’re hopeful that the final agreement will reflect those discussions and will allow us to continue to thrive as a domestic producer,” Mr. LeBretton said.

Nike isn’t putting much detail around its argument of added jobs, including how lower tariffs would help and where they would be created.

“It’s too early to say specifically where investments would be within the U.S.,” spokesman Reggie Borges said. He said relief from overseas duties would help Nike expand its American supply chain. He said that Nike has 26,000 employees in the U.S., and 56,500 world-wide, not including workers at its contract factories.

Mr. Obama visited Nike headquarters in Beaverton, Ore., on Friday to gain support for the trade agreement under negotiation between the U.S. and 11 other countries. Its primary goal is to cut or eliminate tariffs between members. That includes Vietnam, where much of Nike manufacturing takes place, and where import tariffs can reach 20% of their value at the border.

The president’s choice of Nike to make his comments drew critics. “Nike represents how moving things overseas hurts American manufacturing,” said Kelley Roy, founder of the local trade group Portland Maker Community, which declined an invitation to appear with Mr. Obama at Nike on Friday.

Write to Sara Germano at sara.germano at wsj.com <https://mail.google.com/mail/?view=cm&fs=1&tf=1&to=sara.germano@wsj.com> and William Mauldin atwilliam.mauldin at wsj.com <https://mail.google.com/mail/?view=cm&fs=1&tf=1&to=william.mauldin@wsj.com>
 
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