Representatives from the 12 countries participating in the Trans-Pacific Partnership (TPP) signed an agreement in principle to implement it in Auckland, New Zealand on Feb. 4. The deal is meant to lead to the elimination of duties on all products made and traded within the region, including the U.S. and Canada, Vietnam, Singapore and Malaysia but not China or Indonesia.
Negotiations for the largest free trade agreement ever started in December of 2009 and were concluded in October 2015, but the TPP has yet to come into force. The U.S. Congress will vote on the trade deal at an as yet unspecified time, but will not be able to amend it.
Like Sports & Fitness Industry Association (SFIA), Footwear and Distributors of America (FDRA) has been supporting the TPP. It estimates that the trade agreement will bring savings of $450 million in the first year of implementation for U.S. consumers, rising to $6 billion in the first decade.
Opposition has come from the Mexican shoe industry, which is a major supplier of footwear to the U.S. market, and from companies like Patagonia, which claims that the deal suits the interests of big business.
FDRA points out that the U.S. footwear industry paid $2.9 billion in import duties in 2015, $200 million more than in the previous year, as imports increased by 5.8 percent in value and 5.7 percent in volume - the highest growth in the last four and five years, respectively. Imports of athletic footwear rose at a record rate of 11.6 percent.
The expectation of free trade with Vietnam has already contributed to boost U.S. imports of footwear - especially athletic shoes - from that country. Total shoe imports from Vietnam into the U.S. jumped last year by 21.9 percent to $4.3 billion. China remained the biggest supplier, but its share of U.S. imports slid once more, down to 65.6 percent.
While its manufacturing capacity is limited, Vietnam is expected to continue to sell higher volumes of footwear in the European Union, following the ongoing negotiation of a free trade agreement between the EU and Vietnam. The current text of the proposed agreement calls for an immediate or accelerated removal of duties for most types of shoes, including sports leather shoes. Conversely, European shoe companies should be able to sell more to Vietnam, which has a population of 92 million people.
In 2015, Vietnam raised its total exports of leathergoods and shoes by 16 percent to about $15 billion, says Lefaso, the country's industry association for these products. Shoes exports reached $12 billion, rising by 16 percent as well. Exports of leathergoods grew by 14 percent to $2.88 billion. The association is predicting a further overall sales increase abroad of between 15 and 20 percent for this year.