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New Balance Renews Opposition to TPP; Footwear Industry Reacts

Though New Balance has been quiet lately in regards to its long-standing opposition to the Tans-Pacific Partnership (TPP), the sneaker company stirred up controversy again today when it renewed its opposition to the trade deal, much to the dismay of others in the footwear industry.

New Balance says it is renewing its opposition to TPP because the Obama Administration reneged on a deal to provide the Boston-based company with a military contract in exchange for its public silence on the issue. The planned deal would have had New Balance producing athletic shoes for the Department of Defense to outfit recruits, a first for the agency, which has historically only used foreign-produced shoes.

New Balance is opposed to TPP, which lowers tariffs on shoes produced in Vietnam and the Pacific region, because it says it will hurt jobs at its New England factories, although the company’s shoes are mostly produced overseas. The planned contract would have allowed New Balance to add workers to its five New England plants, which currently employ about 1,400.

“We swallowed the poison pill that is TPP so we could have a chance to bid on these contracts,” said Matt LeBretton, New Balance’s vice president of public affairs in a statement to the Boston Globe. “We were assured this would be a top-down approach at the Department of Defense if we agreed to either support or remain neutral on TPP. [But] the chances of the Department of Defense buying shoes that are made in the USA are slim to none while Obama is president.”

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But the DOD says the deal was withdrawn because New Balance failed to meet the agency’s budget and because the shoes were not durable enough.

“It is unfortunate that, despite a strong outcome in TPP that advances the interest of US footwear workers, New Balance now appears to be changing its position on TPP in response to the Pentagon’s separate procurement process,” Pentagon spokesman Matt McAlvanah said in a statement.

While TPP may not be voted on until later this year, or indeed until after the next president is elected, the footwear industry is already reacting to New Balance’s renewed opposition to the deal. In a statement today, FDRA President Matt Priest expressed disappointment over the sneaker company’s change of heart.

Priest said, “We are disappointed at New Balance’s change of heart on this vitally important agreement for the entire U.S. footwear industry over a matter unrelated to TPP. New Balance’s position is especially surprising as it is one of the companies that would see significant tariff reduction under the agreement. In fact, TPP will save footwear consumers and companies $450 million the first year of implementation and $6 billion over the first decade. That is why 99% of the entire footwear industry, both domestic manufacturers and importers, support TPP and why we will continue to lead the charge in explaining to lawmakers how this agreement will strengthen jobs across the U.S. and provide real value to footwear consumers.”