Nike, footwear industry to watch trade talks closely

Nike, footwear industry to watch trade talks closely

Oregon’s footwear industry, led by Nike, will be closely watching trade negotiations that resume next week among the U.S. and 10 trading partners.

The footwear industry hopes the Trans-Pacific Partnership negotiations, which open Monday, lead to eliminating tariffs assessed on footwear imported from the 10 other nations.

This is especially the case for Vietnam, the source for 8 percent of U.S. footwear imports. The southeast Asian nation has emerged as a major source of contracted footwear for American brands; it is the leading source of Nike footwear, followed closely by China.

China is not one of the 11 nations in the TPP negotiations, which started about three years ago and are expected to conclude as early as the end of this year. Talks open next week in Kota Kinabalu, Malaysia.

Sen. Ron Wyden, D-Oregon, sent a letter earlier this week to U.S. Trade Representative Michael Froman stressing the importance of recrafting duties assessed on footwear entering the U.S. from the 10 countries. A dozen other senators, including Jeff Merkley of Oregon and Patty Murray and Maria Cantwell of Washington also signed the letter.

“More than 99 percent of the footwear — by volume — sold in the U.S. is imported,” the letter says. “And, although there is little domestic manufacturing of footwear, these imports face some of the highest import tariff rates under law.”

A similar letter was sent by 47 House members, including Oregon Reps. Earl Blumenauer, Suzanne Bonamici, Kurt Schrader and Greg Walden.

Tariffs for footwear imported to the U.S., not just from Vietnam, are complicated and arcane, crafted in the 1930s and taking into account the type of material and construction method, said Matt Priest, president of the Footwear Distributors and Retailers of America.

The average duty the U.S. places on all consumer goods is 1.3 percent, Priest said. For footwear, it’s about 10 percent.

“The facts are on our side,” he said.

Nike, a footwear association member, issued a statement supporting the letters from Congress to Froman, the trade representative.

“A TPP agreement modernizing the current footwear tariff structure would allow Nike to further reinvest into innovation and maintain our global competitiveness, resulting in more high-paying jobs in the U.S.,” said the statement, attributed to Sean O’Hollaren, vice president, government and public affairs.

“The high-value work required to innovate and create our shoes is based primarily in the U.S., including product design, marketing, sales, manufacturing and distribution. Nike footwear is produced globally and the company directly employs more than 25,000 people in the U.S., with a significant employee presence in Oregon, Tennessee, Missouri, California, New York, Florida, Maine, Massachusetts and Texas.”

Columbia Sportswear Co., in Washington County, supports a tariff overhaul for similar competitive reasons as Nike, said Peter Bragdon, the company’s vice president and general counsel.

For Portland-based LaCrosse Footwear Inc. the issue is tricky.

While LaCrosse is a member of the Footwear Distributors and Retailers of America, the company counts Danner Inc. as a subsidiary. And Danner has built a reputation for making about a third of its hand-crafted boots in the U.S. — specifically at a plant near the Portland International Airport. LaCrosse officials could not be reached for comment about TPP.

Another geopolitical complication for LaCrosse / Danner: They’re owned by ABC-Mart, which is based in Japan, a country that is poised to join the TPP.

— Allan Brettman

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