BEAVERTON, Ore.— When President Barack Obama promotes trade, he likes to say that 95 percent of the world’s markets are outside the nation’s borders — a potential goldmine for U.S.-made products. But Nike, where Obama made a pitch Friday, wants easier access to the U.S. market for the products it makes overseas.
Obama’s appearance at the headquarters of the giant athletic-wear company illustrates the competing, sometimes contradictory goals of trade and how one industry, footwear makers in particular, can encapsulate the debate that is churning around Obama’s efforts to negotiate a Trans-Pacific agreement that would open up commerce among the U.S. and 11 other Pacific Rim countries.
“I know a lot of folks are skeptical about trade,” Obama acknowledged. “Past trade deals didn’t always live up to the hype. Labor and environmental protections weren’t always strong enough.”
He said this agreement is in America’s best interest. “Just do it,” Obama said, echoing Nike’s slogan.
Nike makes most of its shoes overseas. Of Nike’s slightly more than 1 million factory contract workers, more than 9 of 10 are in Asia. The largest number is in Vietnam, one of the countries in the Trans-Pacific talks.
The U.S. has tariffs on footwear imports that average about 10 percent.
Reducing tariffs in the U.S. and in other countries that are part of the Trans-Pacific deal, Nike says, would allow it to manufacture more shoes in the U.S. It announced Friday that if the Trans-Pacific deal is approved, Nike and its U.S. manufacturing partners would create up to 10,000 jobs over 10 years in the United States. Nike said they would be manufacturing and engineering jobs.
Citing Nike’s jobs announcement, Obama said that “far more Nike products would be made in the USA. That means thousands of new jobs in manufacturing and engineering and designs in Nike facilities across the country, and potentially tens of thousands of new jobs along Nike’s supply chain here at home. That’s what trade can do.”
Labor unions are skeptical of such talk.
“We have heard similar promises from companies before, and very few have panned out,” AFL-CIO spokesman Eric Hauser said in a statement. Past trade agreements, he said, “have taught us that corporate-driven trade policy too often accelerates a global race to the bottom.”
The pitch at Nike was a variation from the more typical argument the White House makes. More common is the assurance that jobs will be created in the U.S. when lowering tariffs overseas opens markets to U.S. producers, like when Obama said he wanted to clear the way overseas for Oregon pinot noirs.
But the push to lower shoe tariffs also illustrates how protective policies have defenders in the U.S. Nike competitor New Balance, which makes millions of shoes in New England, has argued that removing all footwear tariffs would hurt its business by allowing cheaper imports into the U.S.
Trade deal critics also say that a Trans-Pacific deal would reward countries like Vietnam where the U.S. concedes that worker-rights protections fall short of international standards. Of the 11 countries the U.S. is negotiating with in the Trans-Pacific talks, seven have manufacturers that contract with Nike for shoes or apparel.
Obama acknowledged that criticism but argued the Trans-Pacific deal would contain enforceable labor standards.
“Nike has factories all around the world, and let’s face it … some of these countries, they don’t have the standards for wages and labor conditions that we have here,” he said. “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’ freedoms to form unions for the very first time,” Obama said.
Some of the more recent free trade deals with Latin American countries have also included enforceable labor rules, but a Government Accountability Office report last year found that while some of the countries have taken steps to strengthen labor rights, enforcement was limited, and monitoring of labor standards in those countries by U.S. agencies was inconsistent.
Obama’s toughest sell is with his own Democratic allies, who fear the loss of American jobs and weakened financial and environmental rules.
“They’re, like, whuppin’ on me,” he said Friday. “Some of my dearest friends are wrong. They’re just wrong”
The White House has been courting Democratic fence-sitters, arguing that export-dependent industries pay higher-than-average wages and that while job losses have affected some industries, trade deals have been good for the U.S. economy overall.
But Obama faces an uphill fight. The last time Congress gave a president negotiating authority was in 2002, under President George W. Bush. The vote was heavily Republican, with only 29 House Democrats voting in its favor.
The White House believes there are about 60-70 House Democrats who are persuadable. But even trade advocates say Obama faces a struggle to get even half of those Democratic votes.