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Silver Lining: Trump’s Commitment to Renegotiate Trade Agreements Could Lead to Positive Change

To recap: Throughout Trump’s presidential campaign, he pledged to “Make America Great Again” by ripping up all existing free trade agreements, including the North American Free Trade Agreement (NAFTA), the Central America Free Trade Agreement (CAFTA) and the Permanent Normal Trade Relations (PNTR) with China, and either scrap the deals entirely or renegotiate them.

“We need to be flexible where we can because things are going to change,” stressed Michael Lambert, director of global trade and compliance at Urban Outfitters Inc., speaking on a panel discussion Wednesday at the 28th Apparel Importers Trade and Transportation Conference in New York City. “We must be prepared to deal with that flexibility and provide options to leadership as to how we can make sure we comply with trade policy. We need to have that constant engagement so we can influence trade policy so that there is an opportunity for us to be heard—even if it’s a discussion with someone who’s already made up their mind about whether they were going to agree with us. We need to find that common ground, move forward from there and possibly have a dialog about something in the future.”

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Julie Hughes, president of the U.S. Fashion Industry Association (USFIA), echoed this sentiment.

“Sometimes the most important meetings are those that we have with members who think they are opposed to trade and don’t understand our industry, don’t understand our global value chains and don’t understand where the jobs come from here in the U.S.,” she said.

Lambert and Hughes recalled a meeting they had with Robert Brady (D-Pennsylvania) in Washington, D.C. regarding his opposition to the Trans-Pacific Partnership (TPP) and what that trade agreement would mean for U.S. retail. They discovered that he didn’t think there was enough workers’ rights protection in TPP.

“I think it was a good opening to start a different dialog about ethical sourcing and some of the things we do from a compliance perspective at Urban,” Lambert said. “We just wanted to express to him where we have a common ground here, because regardless of the legal requirements around protection of worker rights in the TPP, we at Urban have higher standards than that already. So regardless of whether we’re obligated under TPP to be at a certain standard for the factories we do business with, we are already looking out for the workers in the factories that produce goods for us because it’s important to us, it’s important to our customers and it’s important to our associates.”

Avedis Seferian, president and chief executive officer of Worldwide Responsible Accredited Production (WRAP), pointed out that the fashion industry has few friends outside of itself, in part because it does not tell its story. But that also presents an opportunity.

“We have a bad reputation among the NGO community, we don’t seem to have too many friends in Congress and unfortunately the real sad part of that narrative is how wrong the basis for that decision was,” he said. “Because there’s a lot of good that this industry does and quite frankly a lot more good than all these legislative efforts have been able to achieve, and all these name-and-shame campaigns have been able to achieve.”

Faced with an uncertain future regarding trade policies, the fashion industry no longer has a choice to sit back and watch inaccurate information flow.

“We have to tell our story, not just from a ‘tactical, controlled narrative, political strategy’ point of view, but from a ‘educate the folks that make the decisions that impact us’ point of view,” Seferin continued. “Because right now they’re making up their minds based on inaccurate and incomplete information and quite frankly that’s because we’re not telling our story. We’re not supplying the other side, which is something that we ought to be doing and it is a great opportunity to make positive change.”

“If some of this renegotiation of existing trade agreements starts to happen, I think instead of looking at that as a bad thing—even though it is a bad thing—we should take that as the opportunity to try to make change in things that we don’t like in those agreements,” added Domenick Gambardella, partner and national practice leader in PricewaterhouseCooper’s customs and international trade practice. “If they’re going to renegotiate them, find whatever silver lining we can and try to at least get something good out of whatever comes out of something like that because if just left to their own devices, if they’re going to try to restrict and everyone sits back, then we’re stuck with whatever they come up with. We need to try to influence some of it to at least make some positive change.”

At the end of the day, however, whatever Trump does or doesn’t do, the world will still turn.

“We’re all in business to make money and that has to be the fundamental thing we can’t lose sight of,” said Robert Antoshak, managing director of Olah Inc. “If there’s not a TPP, business keeps going. If there’s not a TTIP (Transatlantic Trade and Investment Partnership), business keeps going. The fact is, either the business makes sense or it doesn’t make sense.”

As Seferin put it, “Whether I’m just trying to be optimistic or not I keep defaulting back to the fact that Trump is a businessman and at the end of the day I think that will be at the center of how he thinks about these things.”