The Boston Globe is reporting that U.S.-based shoe manufacturer New Balance has come out hard against the Trans Pacific Partnership trade deal. The odd thing, though, is that “the Boston company had gone quiet [on TPP] last year.”
Now, apparently, we know why:
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.
But no order has been placed, and New Balance officials say the Pentagon is intentionally delaying any purchase.
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.
Tariffs on shoes are steep, and New Balance is one of a handful of shoe companies that still manufactures shoes in the United States. (Though, 75 percent of their shoes are made abroad.)
The company’s leaders appear to disagree that the now-broken deal was underhanded. “There was no quid pro quo deal,” Rob DeMartini, CEO of New Balance told WMTW. “We wanted to compete for a big piece of business that we are very confident we can win in.”
Matt LeBretton, VP of public affairs for the company, tells the Globe that:
We swallowed the poison pill that is TPP so we could have a chance to bid on these contracts,…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.
The fight comes as a result of a statutory requirement known as the Berry Amendment, which places restrictions on where the items used by members of the armed forces are manufactured. New Balance had hoped their U.S.-made shoes could put an end to the exemption for imported athletic shoes, which the DoD has allowed in recent years.
A lifting of the athletic shoe exemption would benefit domestic shoe manufacturers and give New Balance a boost, as it would cut out a broad swath of competitors who only manufacture abroad.
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