Thursday, April 14, 2016
But now the deal is off.
The Boston Globe is reporting that U.S.-based shoe manufacturer New Balance has come out hard against the Trans Pacific Partnership trade deal. The odd thing, though, is that "the Boston company had gone quiet [on TPP] last year."
Now, apparently, we know why:
Tariffs on shoes are steep, and New Balance is one of a handful of shoe companies that still manufactures shoes in the United States. (Though, 75 percent of their shoes are made abroad.)
The company's leaders appear to disagree that the now-broken deal was underhanded. "There was no quid pro quo deal," Rob DeMartini, CEO of New Balance told WMTW. "We wanted to compete for a big piece of business that we are very confident we can win in."
Matt LeBretton, VP of public affairs for the company, tells the Globe that:
The fight comes as a result of a statutory requirement known as the Berry Amendment, which places restrictions on where the items used by members of the armed forces are manufactured. New Balance had hoped their U.S.-made shoes could put an end to the exemption for imported athletic shoes, which the DoD has allowed in recent years.
A lifting of the athletic shoe exemption would benefit domestic shoe manufacturers and give New Balance a boost, as it would cut out a broad swath of competitors who only manufacture abroad.
The U.S. Trade Representative's office suggested that the Pentagon's procurement process was "separate" and made no comment on the alleged deal.
You know what they say: If the shoe fits...