The precarious position of New Balance, the last major U.S. athletic shoe manufacturer that still makes some of its wares in the United States, highlights the difficulty of international trade agreements. On one hand, a proposed trade pact with Vietnam will bring less expensive shoes to the U.S. market. On the other, it will likely end New Balance’s U.S. operations.
New Balance makes shoes at five plants in New England, three of them in Maine — Skowhegan, Norridgewock and Norway. Workers at these plants cut leather for a pair of shoes in 88 seconds, handle precise stitching in 37 seconds, and glue soles to uppers even faster, according to a Washington Post story published in the weekend Bangor Daily News. They earn about $10 an hour.
Similar workers are paid $1.50 an hour in China and less in Japan.
To keep these more cheaply made shoes from flooding the U.S. market, a tariff — typically 20 percent — is imposed.
“If you are buying shoes, you’re paying a shoe tax,” Nate Herman of the American Apparel and Footwear Association told the Post. The group has led the fight against the shoe tariff and supports the Trans-Pacific Partnership. “For products that are no longer produced here and haven’t been produced here for decades, there’s no sense for consumers to be paying it.”
Tell that to the New Balance workers in Maine.
“We want to fight really hard to keep this business in Maine,” said Lori Cook, 28, a single mom with two kids who works at the Norridgewock plant. “I’d like to keep my job.”
This highlights the difficulty for the Obama administration as it pushed the Trans-Pacific Partnership, a trade agreement between Vietnam and six countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru and Singapore.
The agreement “provides an opportunity to develop a new model for U.S. trade negotiations and a new regional approach that focuses more on jobs, enhances U.S. competitiveness and ensures that the benefits of our trade agreements are shared by all Americans,” U.S. Trade Representative Ron Kirk wrote in a 2009 letter to then-House Speaker Nancy Pelosi.
The New Balance situation shows that “sharing” the benefits is not that easy.
Cheaper shoes are a benefit to U.S. consumers, but losing jobs is not. The administration has yet to prove that is has found the right balance when it comes to trade.