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August 23, 2013

2011 Press Herald file/Shawn Patrick Ouellette

Justin Waring lays soles on shoes at New Balance factory in Norridgewock in 2011. New Balance – the only large sneaker manufacturer that still makes shoes domestically – employs about 900 in Maine.

New England shoe companies out of step on tariff

By Kevin Miller
kmiller@pressherald.com
Staff Writer

WASHINGTON – A fight over footwear is brewing among several major sneaker manufacturers in New England.

Six New England-based footwear companies wrote a letter to President Obama's top trade official recently, urging the administration to eliminate import tariffs on shoes made overseas as it negotiates a new free-trade agreement with Pacific nations.

The letter, signed by executives of companies including Converse and Adidas, is a direct response to efforts by New Balance to protect tariffs that the company claims are critical to preserving more than 1,000 manufacturing jobs in Maine and Massachusetts.

"Today over 99 percent of all shoes sold in this country are made outside the United States," reads the letter to U.S. Trade Ambassador Michael Froman, signed by executives of Converse, Adidas, Saucony, Sperry Top-Sider, Clarks Americas and Black-Diamond Group. "Excessively high duties have failed to keep manufacturing jobs here, but they have succeeded in making shoes artificially expensive, hampering our ability to expand domestic employment throughout the footwear supply chain."

The letter ends with an invitation "to visit any of our companies and meet the men and women of the 21st Century footwear industry" and "consider their future" as the administration negotiates the Trans Pacific Partnership free-trade agreement.

The invitation is a direct response to Froman's visit last month to New Balance's factory in Norridgewock, one of three New Balance plants in Maine that employ a total of about 900 people.

Froman met with workers and listened to their concerns that eliminating tariffs on shoes made in low-wage countries such as Vietnam will endanger the few footwear manufacturing jobs left in the U.S.

Massachusetts-based New Balance is the only large sneaker manufacturer that still makes shoes domestically, although about 75 percent of the company's footwear is made overseas.

Matt LeBretton, spokesman for New Balance, called the letter "disingenuous on its face" and a "transparent political maneuver" by the six companies.

"None of them make shoes in the U.S. today," said LeBretton. "It is a huge distinction. In my opinion, it is not reasonable to compare manufacturing jobs to design and retail jobs. We have design and retail jobs too, and they are all in New England."

LeBretton also dismissed the letter's suggestions that eliminating tariffs would create jobs in the U.S. or lower retail prices. If the tariffs were eliminated, he said, New Balance's domestic manufacturing would be at an even bigger disadvantage, threatening jobs in parts of Maine that already are struggling with high unemployment.

But Matt Priest, president of the trade group Footwear Distributors and Retailers of America, said the letter "makes it clear where the vast majority of the footwear industry stands in New England and across America."

"This letter is a powerful counter to what Ambassador Froman heard from just one New England company he visited last month," Priest said in a prepared statement. "We applaud these companies for being the voice of and fighting for the thousands of 21st century footwear jobs in the North East. In spite of excessive duties, New England footwear companies are innovative and forward-thinking. Can you imagine the growth that will be unleashed if we can eliminate duties on footwear from Vietnam, the second largest supplier to the U.S. market?"

Most free-trade agreements eliminate perceived "barriers" to exports and imports between nations, which often means phasing out U.S. tariffs on foreign imports.

Froman and other officials from the U.S. Trade Representative's office are now in the small southeastern Asian nation of Brunei for negotiations on the Trans Pacific Partnership. Other nations in the negotiations include Vietnam, Singapore, New Zealand, Japan, Australia and Chile.

Members of the Maine and Massachusetts congressional delegations have been lobbying to preserve the footwear tariffs. Obama's previous trade ambassador, Ron Kirk, toured New Balance factories in Maine last year, and Sen. Angus King of Maine held up Froman's nomination on the Senate floor until Froman agreed to visit a factory as well.

During his visit to Maine, Froman said shoe manufacturing is one of the most difficult and sensitive aspects of negotiations over the Trans Pacific Partnership.

According to LeBretton, he assured New Balance that he understands the importance of the manufacturing jobs in Maine and Massachusetts.

Kevin Miller can be contacted at 317-6256 or at:

kmiller@mainetoday.com





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