Nike Inc. is the latest brand to announce big support for the expansive trade Trans-Pacific Partnership (TPP) deal. But the global athletic giant is taking a notable public stance, voting big with not just dollars, but also political capital.
Later today, President Obama lands in Beaverton, Ore. to meet with Nike executives and rally support for two controversial trade issues: the trade promotion authority and TPP. If the Trans-Pacific Partnership passes, Nike announced its’ intention to grow U.S. footwear manufacturing, creating up to 10,000 jobs here at home, and 40,000 supply chain and service jobs from the expansion over the next decade.
“We believe agreements that encourage free and fair trade allow Nike to do what we do best: innovate, expand our businesses and drive economic growth. Nike has always led the way in product innovation, and now we will be able to accelerate our investments to continue to drive manufacturing innovation,” Mark Parker, president & CEO Nike, Inc. said in a release.
The high profile and public announcement is the most recent major commitment from the brand towards trade but also the Obama administration. The company paved the way for many other athletic brands to support with Michelle Obama’s children’s health initiatives with a $50 million donation in 2013.
At the FDRA Innovation Summit in Washington D.C. on Thursday, Nike’s government relations team said that the decision to become more politically involved happened after it’s “Bench Warming” strategy failed to produced results, and key issues like tariffs and trade became increasingly important in the legislative agenda.
“A few years ago we were having a meeting with an elected official and our Nike customs official came in and said ‘Nike is responsible for 1 percent of all the duties collected by the U.S. government,'” said Wayne Monfries, VP of corporate tax and trading. “We realized we had to get off the bench.”
As the Trans-Pacific Partnership is reaching the final stretch of negotiations, the public debate has also heated up, and Nike’s commitment has pulled it into the center of the conversation. The deal, a complicated 12-country agreement that includes key Pacific Rim nations from Japan to New Zealand, would alleviate much of the tariff burden on footwear. With nearly 99 percent of all footwear imported, the shoe industry is pushing for the trade deal’s passage.
“For us it’s not just a Nike or FDRA message, but it’s a 100 percent industry message. We need the tariff relief and we need this trade deal to continue job creation expansion and continue innovation,” said Matt Priest, FDRA president. “I think Nike is one of the most innovative companies in the world and had driven a lot of innovation in our industry…not just in athletic but fashion too. The loudest chorus we can have the better we can be.”
Nike’s high-profile alignment with the Obama administration on TPA and TPP has also brought it under close scrutiny. Opponents have pointed to Nike’s spotty record in factory conditions and worker safety in its overseas facilities and the huge dollars the company stands to gain from open trade.
More generally, opponents of the deal argue it will hurt U.S. manufacturing and jobs, and increase income disparity, along with a host of other concerns ranging from environmental to immigration questions.
Sen. Harry Reid, the minority leader in the Senate, has gone on record that he’ll fight the deal and also threatened to filibuster the legislation if other bills aren’t prioritized. It’s a big break for the Democrat, who is at odds this time around with President Obama.
“[Mitch McConnell] has some decisions to make and he’s going to have to work around me and the caucus, “ Reid told the Huffington Post.