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<p class="MsoNormal"><b><i><span style="font-size:10.0pt;font-family:"Trebuchet MS","sans-serif"">“New Balance is reviving its fight against the trade deal, which would, in part, gradually phase out tariffs on shoes made in Vietnam. A loss of those tariffs,
the company says, would make imports cheaper and jeopardize its factory jobs in New England.”<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b>New Balance accuses Pentagon of reneging on sneaker deal<o:p></o:p></b></p>
<p class="MsoNormal">Boston Globe<o:p></o:p></p>
<p class="MsoNormal">By Jon Chesto<o:p></o:p></p>
<p class="MsoNormal">April 12, 2016<o:p></o:p></p>
<p class="MsoNormal"><a href="http://www.bostonglobe.com/business/2016/04/11/new-balance-says-obama-administration-reneged-deal-involving-military-business/zUdUWa23ZWv53D5a9AjNII/story.html">http://www.bostonglobe.com/business/2016/04/11/new-balance-says-obama-administration-reneged-deal-involving-military-business/zUdUWa23ZWv53D5a9AjNII/story.html</a><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">New Balance is renewing its opposition to the far-reaching Pacific Rim trade deal, saying the Obama administration reneged on a promise to give the sneaker maker a fair shot at military
business if it stopped bad-mouthing the agreement.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">After several years of resistance to the Trans-Pacific Partnership, a pact aimed at making it easier to conduct trade among the United States and 11 other countries, the Boston company
had gone quiet last year. New Balance officials say one big reason is that they were told the Department of Defense would give them serious consideration for a contract to outfit recruits with athletic shoes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">But no order has been placed, and New Balance officials say the Pentagon is intentionally delaying any purchase.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">New Balance is reviving its fight against the trade deal, which would, in part, gradually phase out tariffs on shoes made in Vietnam. A loss of those tariffs, the company says, would
make imports cheaper and jeopardize its factory jobs in New England.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The administration has made the pact a priority. It could be voted on by Congress later this year, though possibly not until after the November elections.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">“We swallowed the poison pill that is TPP so we could have a chance to bid on these contracts,” said Matt LeBretton, New Balance’s vice president of public affairs. “We were assured
this would be a top-down approach at the Department of Defense if we agreed to either support or remain neutral on TPP. [But] the chances of the Department of Defense buying shoes that are made in the USA are slim to none while Obama is president.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The administration says the issues of foreign tariffs and of whether the Pentagon should be required to buy shoes made domestically are entirely separate.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">New Balance disagrees. Though most of the company’s shoes are made overseas, domestic manufacturing is a big priority for owner Jim Davis, a longtime Republican donor.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">A running shoe is brushed in a final step before boxing them in Lawrence.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The company employs about 1,400 people at its five New England factories — one in Brighton, one in Lawrence, and three in Maine. Company officials say they are looking to add workers
to those plants, and they see a major military contract, with potentially as many as 200,000 shoe orders a year, as a way to help reach that goal.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Nearly every piece of gear that military recruits wear is made in the United States, per a 1940s-era law known as the Berry Amendment. But for many years, athletic shoes were exempt,
largely because of a lack of sufficient domestic options.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Hoping to change that, New Balance and other companies worked toward making an all-American shoe. New Balance even purchased an expensive machine to make midsoles, a key component that
was nearly always made overseas.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">In 2014, the Pentagon relented. With competition among US manufacturers, officials said they were ready to consider domestically made shoes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">LeBretton said a representative for the Obama administration then asked New Balance to accept a compromise version of the trade deal, partly in exchange for a pledge of help getting
the Department the Defense to expedite the purchase of US-made shoes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">But that help never arrived, LeBretton said. The agency still hasn’t ordered any US-made sneakers.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The problem, according to the Department of Defense, is that none of the three New Balance shoes offered for consideration met the agency’s cost requirements and one didn’t meet durability
standards.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The administration portrays the delay as quality and cost control. But New Balance sees it as foot-dragging, and as reason enough to revive its fight against the Trans-Pacific Partnership.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">“The Department of Defense has basically played a shell game with domestic footwear manufacturers to protect the profits of their [base stores],” said LeBretton, who added that the company
has offered to sell its shoes to the military with no retail markup. “They’ve put up roadblock after roadblock. Our shoes are ready to go. It’s a bureaucracy run amok.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">A spokesman for the Office of the US Trade Representative said the Obama administration supports New Balance’s efforts to develop a shoe that’s compliant with the Berry Amendment. He
said it is a mistake for the company to use that issue as a reason not to support the separate trade accord.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">“It is unfortunate that, despite a strong outcome in TPP that advances the interest of US footwear workers, New Balance now appears to be changing its position on TPP in response to
the Pentagon’s separate procurement process,” spokesman Matt McAlvanah said in a statement.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">New Balance’s stance also drew criticism from the Footwear Distributors and Retailers of America, which argues that eliminating the Asia tariffs would be good for consumers and could
allow US companies to invest more in domestic operations. “We would have loved to have had all duties eliminated on Day One,” said Matt Priest, the group’s president. “That’s not what we got. We got a compromise.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">But like New Balance, Representative Niki Tsongas is tired of waiting for the domestic shoe contract.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">The Lowell Democrat is trying to include legislation in the next big defense spending bill that would ensure the department’s purchase of US-made shoes for recruits. She is expected
to have assistance from members of Maine’s delegation.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Wolverine Worldwide, another company looking to build an all-US running shoe for the military, backs the Asia-Pacific deal and will also support Tsongas’s legislation. Spokesman David
Costello said Wolverine, whose Saucony brand is based in Lexington, is also frustrated by the delays. Landing a Pentagon contract, he said, could create a positive impact that would ripple throughout Wolverine’s and New Balance’s supply chains and support
smaller companies that make components for the shoes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">Executives at New Balance recognize that they risk alienating a big potential customer by challenging the US government over the trade agreement.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">But LeBretton said it’s worth the gamble.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif"">“We make a lot fewer shoes in the US than we do overseas, but the point is we’re trying to make more here, not less,” LeBretton said. “When agreements like this go into place, what that
says to us is that our president and our trade negotiators, they don’t want us to make more products here.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Trebuchet MS","sans-serif""><o:p> </o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-family:"Bell MT","serif"">Michael F. Dolan, J.D.<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Legislative Representative<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">International Brotherhood of Teamsters<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Desk 202.624.6891<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Fax 202.624.8973<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Bell MT","serif"">Cell 202.437.2254<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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