Nike the Trans-Pacific Partnership agreement would accelerate the launch of its new domestic manufacturing plant.
President Barack Obama said during a visit to Nike headquarters in Beaverton, Ore. Friday that the Pacific Rim trade agreement now being negotiated would support the recent rebirth of advanced manufacturing in the United States. In an announcement coordinated with the President’s visit, Nike emphasized the point, saying it would accelerate efforts to build a factory the United States if the Trans-Pacific Partnership agreement becomes a reality.
Over the next decade, that could mean 10,000 new jobs in manufacturing and engineering from Nike and its suppliers, and up to 40,000 jobs across the company’s supply chain, Chief Executive Officer Mark Parker said during opening remarks. In an interview with CNBC, Parker said the TPP would lower duties on imported merchandise freeing up money for domestic investment.
“With the relief that we expect within the TPP, we can use those funds to actually support innovation to drive advanced manufacturing here in the U.S.,” said Parker.
Nike is the type of company that critics of trade deals fault for outsourcing jobs to Asia and other parts of the world to make its shoes and sports apparel. Nike has also come under fire for using overseas factories that pay low wages and have poor working conditions, but in recent years the company has led apparel industry reform efforts to improve conditions.
“We have a deep commitment to worker’s rights, to improving conditions within our contract factories to create a greener, more sustainable supply chain,” Parker said on CBNC.
Meanwhile, Obama made a vigorous case that the TPP is a modern deal that corrects the ills of previous trade agreements that helped ship out jobs and would reverse that trend.
“Past trade agreements, it’s true, didn’t always reflect our values or didn’t always do enough to protect American workers. But that’s why we’re designing a different kind of trade deal,” Obama said. “The truth is that companies that only care about low wages, they’ve already moved. They don’t need new trade deals to move. They’ve already outsourced. They’ve already located in search of low wages.
“What this trade agreement would do is open the doors to the higher-skill, higher-wage jobs of the future – jobs that we excel at. It would make sure our manufacturers who are operating at the higher end of the value chain are able to access these growing markets.”
A confluence of rising Chinese wages, energy, and trans-continental transportation costs, along with with lower U.S. energy prices due to a resurgence in shale oil and gas extraction and a desire for companies to be closer to their customers, has contributed to a rise in U.S. manufacturing this decade.
“Outsourcing is already giving way to insourcing,” the President said. “Companies are starting to move back here to do more advanced manufacturing, and this is a trend we expect to continue. This trade deal would help that.”
Congress is considering legislation designed to strengthen the administration’s hand in negotiations with the 11 other TPP member nations by creating a process for upfront guidance on U.S. goals in exchange for an up-or-down ratification vote with no amendments. The TPP is expected to significantly lower tariffs and open markets for U.S. companies, streamline customs procedures, and prevent restrictions on open Internet use.
Obama reiterated that the TPP is a major plank of his agenda to boost the prosperity for middle-class Americans, who have seen stagnant wages and a decline in their relative wealth the past 20 years.
He acknowledged that his stiffest opposition to TPP is coming from some in his own party who are skeptical that the TPP might be a replay of the North American Free Trade Agreement, which experts say has benefited the United States, Canada and Mexico, but not to the degree advertised.
“Past trade deals didn’t always live up to the hype. Labor and environmental protections weren’t always strong enough…Some of our manufacturing base shifted over the last 25 years, and it wasn’t good for manufacturing and it wasn’t good for those communities, and it wasn’t good for workers. That’s the truth. It had benefits – other jobs were created, we got cheaper goods. But there was real displacement and real pain. And so, for many Americans, this is not an abstraction – this is real.
“But we’ve got to learn the right lessons from that. The lesson is not that we pull up the drawbridge and build a moat around ourselves. The lesson is, is that we’ve got to make sure that the trade deals that we do shape are ones that allow us to compete fairly,” Obama said.
If America doesn’t engage with other countries to write the rules of the road for trade, then China, which is on its way to becoming the world’s largest economy in a few years, will strike agreements in the region that maintain barriers for American goods, he warned. TPP has strong, enforceable provisions on child labor, wildlife trafficking, deforestation and other labor and environmental standards that will help level the playing field for workers and businesses in the United States, who face greater costs to comply with regulations, Obama insisted.
“When you look at a country like Vietnam, under this agreement, Vietnam would actually, for the first time, have to raise its labor standards. It would have to set a minimum wage. It would have to pass safe workplace laws to protect its workers. It would even have to protect workers’ freedom to form unions – for the very first time. That would make a difference. That helps to level the playing field and it would be good for the workers in Vietnam, even as it helps make sure that they’re not undercutting competition here in the United States,” he said.
“And if Vietnam, or any of the other countries in this trade agreement don’t meet these requirements, they’ll face meaningful consequences. If you’re a country that wants in to this agreement, you have to meet higher standards. If you don’t, you’re out. If you break the rules, there are actual repercussions. And that’s good for American businesses and American workers, because we already meet higher standards than most of the rest of the world, and that helps level the playing field.”
Obama dismissed the notion that the TPP should be blocked because it doesn’t cover currency manipulation, saying that problem can be dealt with separately.
The TPP would benefit small businesses such as Egg Press, a Portland-based greeting card company, and Sokol Blosser Winery in Dayton, Ore., not just multinational corporations, Obama told Nike employees and other guests.
Egg Press could sell 50 percent of its U.S. volume in Japan if non-tariff barriers that created huge shipping delays were eliminated, and family-run Sokol Blosser could increase wine exports to Japan if high tariffs on American wine were eliminated, according to Obama.
Obama extols job benefits of TPP during Nike visit
