I came across an article last week in Businessweek that discussed New Balance and the current effort underway by the Obama administration to conclude yet another free-trade deal, the Trans-Pacific Partnership, with eight Pacific nations, including Vietnam. Vietnam now ranks fourth among the world’s footwear exporters; Vietnam exported $5.57 billion worth of shoes in 2010. The new trade deal would remove tariffs on shoes imported from Vietnam and the other nations included in the Trans-Pacific Partnership. The article does a nice job touching on a whole range of issues relating to trade and manufacturing in this country.
Ironically, New Balance makes shoes in Vietnam, and would benefit as a result of this deal. But from my point of view, the comments of the New Balance spokesperson Matt LeBretton are compelling: ““If this is purely a business decision, then it’s very clear that you make more profit by making shoes in Asia than in the United States. We aren’t purists, but we are doing this for reasons that are other than financial impact. It’s the right thing for us to do. We suffer as a country when we lose the ability to manufacture.”
Nike, which doesn’t make any shoes in this country, wholeheartedly supports the deal. Nike pledges that if the deal goes through, it will create “thousands of high-paying U.S. jobs, from designers to product engineers.” But the jobs that Nike would create would require at least a four-year college degree, while the New Balance jobs that may be lost do not require a diploma from a university. This country should be doing all it can to preserve manufacturing jobs that provide work for our citizens with little or no post secondary education. That is an important consideration since 3/4 of Americans do not graduate from college.
When I heard about this new trade deal, it reminded me of an old trade deal, NAFTA. Remember NAFTA? My Mum was in Congress when the NAFTA deal was being debated. I remember people who questioned the passage of NAFTA were labeled protectionists and shortsighted. The proponents of NAFTA made some pretty spectacular claims about job creation and trade surpluses that would accrue to the U.S. as a result of the passage of NAFTA. Those claims proved to be complete bullshit. In 1993, prior to the passage of NAFTA, the U.S. had a $1.6 billion trade surplus with Mexico. In 2010, our trade deficit with Mexico was $97.2 billion. Robert Scott of the Economic Policy Institute estimates that NAFTA led to the loss of almost 700,000 U.S. jobs, even after taking into account jobs created by increased exports to Mexico.
Now don’t get me wrong, I like a bargain. But buying American is more important for me than getting a “bargain.” I am in the process of designing my own personal pair of New Balance shoes. I feel good knowing that by buying my pair of New Balance shoes, I will help keep members of our extended American family gainfully employed.
Finally, check out this great New Balance video; it put a smile on my face.