18 Jun FDRA Talks Shoes with BBC News
US-EU trade deal: How it affects you
By Tom Geoghegan BBC News, Washington
Talks to thrash out the largest free trade agreement in history have been officially launched at the G8 meeting in Northern Ireland. So what might a US-European Union deal achieve?
About £100bn ($157bn) to the EU, £80bn to the US, and £85bn to the rest of the world.
As UK Prime Minister David Cameron officially launched the trade talks, rattling through the potential gains, it was easy to forget how much work lies ahead.
Tearing down trade barriers between the world’s two largest economies will not happen overnight, and nothing will be signed on a deal before the end of 2014.
There are two key elements – the reduction of tariffs and the harmonising of regulations.
So, unpicking the jargon and distilling the generalities, what might it really mean?
1. Cheaper shoes for Americans
Only 1% of shoes sold in the US are made on American soil, but that influx of foreign-made shoes comes at a price – tariffs are as high as 66%, giving the US Treasury a handy $2.4bn (£1.5bn) a year.
“From the importer to the distributor to the retailer, that price is marked up to create profit margins,” says Matt Priest, president of the Footwear Distributors and Retailers of America (FDRA).
“So looking at a children’s shoe at $9.99, $3-4 of that could be attributed to the tariff paid at the border.”
By eliminating that barrier, put in place by the Tariff Act of 1930, prices will fall in the mass market, he says.
“If Walmart was to pass on that saving to consumers, the competitors will follow. If you’re a single mum with three kids and you have to buy them shoes once a quarter you’re talking about a decent saving just by eliminating this tax.”