New Balance shoe plants fear job losses with Trans-Pacific Partnership

By Rob Hotakainen, McClatchy NewspapersSeptember 19, 2012 

LEESBURG, Va. -- With 1,350 employees in its five U.S. factories, New Balance is proud that it still produces 7 million pairs of shoes each year at its plants in Maine and Massachusetts, the last major athletic footwear company that still has manufacturing jobs in the United States.

But the company says those jobs could very well disappear if the U.S. scraps its tariff on athletic footwear coming in from Vietnam.

It's part of the mounting anxiety caused by the new Trans-Pacific Partnership, the largest trade pact proposed in U.S. history. And as 400 negotiators from nine countries met privately at a golf resort in northern Virginia last week in an attempt to finalize details, New Balance officials weren't the only ones fretting.

Autoworkers feared the loss of 26,500 domestic jobs and said the production of American cars would fall if Japan joins the pact and the United States drops a 2.5 percent tariff on Japanese cars, making them cheaper to buy.

Doctors worried that it will be harder to get medicines to fight AIDS and other diseases in developing countries if U.S. negotiators insist on extending patents for pharmaceutical companies.

And many members of Congress and other critics lamented that such big decisions were being made in secret meetings, at a luxury resort in the Potomac River Valley, far from public view.

In Washington, where at least one of every three jobs is tied to international trade, the pact presents "a tremendous opportunity" to boost trade with the Asia-Pacific region, which already accounts for nearly 70 percent of the state's exports, said Eric Schinfeld, president of the Washington Council on International Trade.

He predicted the pact would particularly help the state's apparel industry and some of its biggest companies, including Nordstrom, REI, Costco and Starbucks, helping them export more products. And with its close proximity to the region, the state would benefit from more imports passing through on their way to final destinations.

"That's big business for our ports," Schinfeld said. "Asia-Pacific is a really big deal for us."

But while opponents derided the new trade pact as "NAFTA on steroids," a reference to the huge North American Free Trade Agreement passed by Congress in 1993 that opponents say led to U.S. jobs moving to Mexico, backers predicted the Trans-Pacific deal would increase U.S. exports, create more jobs and lower prices for American consumers.

Negotiations include nine countries: the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Mexico and Canada will soon formally join the talks, bringing the total membership to 11 countries. Japan already has expressed interest in participating, and China is regarded as a potential partner down the road.

The deal is an attempt to get the United States to cash in on a region that accounts for more than 40 percent of all international trade. In addition to eliminating many tariffs, negotiators hope to reduce regulations and the cost of trade, to promote more digital and "green" technology, and to come up with rules on a wide variety of topics, addressing everything from sanitary standards to customs procedures to environmental issues. The Asia-Pacific region is an increasingly important market for U.S. businesses, accounting for $775 billion in exports in 2010, a 25.5 percent increase from just a year earlier.

In a speech in Russia on Sept. 8, Secretary of State Hillary Clinton said the deal marked a major push by the Obama administration to open new foreign markets and reduce barriers to trade, which she said would lead to "more and better growth." She said it's part of the president's plan to advocate for U.S. businesses and to double the nation's exports during a five-year period, from the year that Obama took office in 2009 to 2014.

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