New Congress, New Era?

WASHINGTON — Footwear executives are closely watching how the new makeup of Congress will affect legislation and regulations that impact their business.

The GOP control of the House will usher into power next year what is traditionally a more business-friendly and pro-trade party, according to industry observers. For footwear execs, the top legislative priority has been the Affordable Footwear Act, a duty-dropping bill that would eliminate some $800 million in duties across several footwear categories.

“Anytime you have a shakeup like the one in this election, not only do you have new members of committees and new leadership, you also have a recalibration of priorities and everything gets a fresh look,” said Matt Priest, president of the Footwear Distributors & Retailers of America.

With more trade-friendly lawmakers in control of the House agenda, Priest said he is optimistic that the footwear bill and other trade deals will advance. Pending trade agreements with South Korea, Panama and Colombia have also been reinvigorated and face better prospects on the heels of the Republican congressional gains, according to most industry players.

Kevin Burke, president and CEO of the American Apparel & Footwear Association, said he is also upbeat about the free-trade pacts that have been languishing. President Obama has singled out his support for the trade deal with South Korea, and the White House has said it is pushing for a resolution on all outstanding issues with the country before the G-20 meeting in Seoul on Nov. 11-12.

“Hopefully, as a result of this election, there is more of a reason for the president to expand his views and … really become a free-trade president,” Burke said.

The prospects for currency legislation are still a concern for the footwear industry, which has a sizable amount of business in China. The country shipped 1.7 billion pairs of footwear to the U.S. in 2009, according to the AAFA.

The House passed a bill last month that would give the Commerce Department more leeway in investigating and cracking down on undervalued currency as an illegal export subsidy, and the footwear industry is concerned it could prompt China to retaliate on U.S. exports. The Senate could address the legislation in the coming weeks.

“If the Senate decides to take up the bill in a lame-duck session and it moves to the president’s desk, we could see increased pressure on the supply chain,” said Priest.

Looking to 2011, AAFA Chairman Killick Datta said it will be a while before any notable legislative progress is made.

“The two [political] parties are at such polar opposites at the moment, and I don’t sense a compromise, which is unfortunate,” he said. “I don’t think we’re going to see monumental improvements yet.”

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