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Maine New Balance Officials Press U.S. Trade Rep on Shoe Tariffs
07/29/2013   Reported By: Jay Field

Maine's congressional delegation and officials with New Balance - the only company still making sneakers in America - are lobbying the Obama administration ahead of a key meeting next month. In Brunei, negotiators for the U.S. and 10 other nations are expected to continue a difficult discussion about footwear tariffs, as part of the Trans Pacific Partnership trade talks. Companies like Nike, which make their sneakers in Asia, say lifting the existing, high U.S. tariffs on footwear will benefit consumers and grow jobs here at home. But New Balance says eliminating the duties, especially on footwear made in Vietnam, will finally force the shoemaker to stop manufacturing products at its plants in Maine and Massachusetts. Jay Field reports.

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As the Trans Pacific Trade talks have deepened, members of Maine's congressional delegation have been aggressive about making sure that top officials in Washington come and meet the only men and women still making sneakers on American soil.

Last fall, former U.S. Trade Representative Ron Kirk paid a visit to New Balance's factory in Norridgewock. Monday, his successor came calling.

On an early morning tour, plant manager Raye Wentworth and Michael Froman, the new U.S. Trade Representative, hit different stops on the production line for one of New Balance's running shoes. Wentworth introduced Froman to Janice Corson, a line supervisor who used to oversee computer stitching.

"So back then, she only had to know about the computer stitching. But when we went to value stream, she had to learn about assembly, cutting and all that stuff," Wentworth says.

"Value stream" is the lean manufacturing technique made famous by Toyota and adopted by many U.S. companies. Corson now manages more than 40 people.

Corson: "It's scary, but Iearned it all!"

Froman: "Now you're teaching everybody else."

Corson: "I don't know about that!"

Wentworth: "She runs a pretty tight ship."

Corson has worked at New Balance for 32 years. "We love our jobs at New Balance," she says, "and right now, if we didn't have these jobs - I'm close to retirement, so I'm not so concerned about myself. But I am about all my other associates."

New Balance employs more than 850 people at its three locations in Maine. After the tour, the nearly 350 who work in Norridgewock brought their worries about the future with them to a meeting hall, where they took seats and listened to Michael Froman talk about the trade deal that could change their lives.

"I'll be frank: Footwear is perhaps the most sensitive and difficult product we deal with in this negotiations," Froman tells them. "We've got importers, retailers and consumers on one side, all arguing that their ability to add jobs depends on lowering the tariffs."

Others, the U.S. trade ambassador noted, argue that carving out special protections for parts of the U.S. economy will only inspire other countries to wall off parts of their markets for American exporters.

"What I can commit to you is that, as I listen to them and I listen to you, my goal is to maximize the positive impact of trade agreements on U.S. jobs and particularly on U.S. manufacturing jobs," Froman said.

But can you assure us we'll still have jobs, one worker asked, once the decision on footwear tariffs is made?

"I value - we all value - domestic manufacturing production. And so, what I will gurantee is that we are going to take all of your thoughts and your concerns, the concerns of your management, and make sure that we are fully integrating them into our thinking about how to deal with this," Froman responded. "We're trying to strike a very good balance here."

Striking that balance, though, will be an enormous challenge. Much of the controversy concerns the inclusion of one nation in the TPP talks: In 2011, Vietnam surpassed China as the number one producer of Nike footwear in the world. But when Nikes come back to the U.S., they're slapped with a tariff that can go as high as 67.5 percent.

Earlier this month, in two separate letters, members of the U.S. House and Senate, led by Oregon's delegation, wrote to Michael Froman, demanding that the tariffs be lifted. Nike and other U.S. manfacturers who make sneakers in Asia say the high duties are hurting consumers and the companies' ability to innovate and create jobs.

But Independent U.S. Sen. Angus King says the footwear tariff allows New Balance to compete on a fair playing field with companies making shoes in countries like Vietnam.

"They don't have the environmental laws, the labor laws and those kinds of things that we have. So it puts us on an equal basis," King says. "If you take it away, it makes it almost impossible for us to compete with those foreign countries. In fact, that's why most shoe manufacturing has already gone overseas."

The next round of talks on the Trans Pacific Partnership take place the last week of August in Brunei.



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